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MongiIG

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  1. MongiIG
    US equity markets have started March on a firmer footing, supported by optimism that the Federal Reserve won’t raise interest rates past the levels already priced into markets.
      Source: Bloomberg
      Indices Federal Reserve Technical analysis S&P 500 Dow Jones Industrial Average Federal Open Market Committee  Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 07 March 2023  US equity markets have started March on a firmer footing, supported by optimism that the Federal Reserve won’t raise interest rates past the levels already priced into markets.
    All eyes now turn to Fed Chair Powell’s Testimony to Congress (scheduled for Wednesday, 2 am Sydney time) and whether the run of robust economic data viewed in January will see the Fed Chairman open the door to a 50bp rate hike in March.
    While a small number of Fed hawks have discussed the possibility of a 50bp rate hike (there is 31bp currently priced for March), the centre of the committee has expressed a preference for a more extended sequence of 25bp rate hikes.
    Therefore, the Fed Chair will likely look through January’s robust data (the result of unseasonably warm weather), and while he will continue to sound hawkish, it is unlikely he will open the door to a 50bp rate hike.
    Of course, should Friday’s non-farm payrolls and next week’s CPI be much hotter than the expected 215k and 0.4%, it may push the FOMC towards a 50bp rate hike in March.
    This situation is made more unstable as the February CPI release next week occurs during the FOMC blackout period which will prevent policymakers from pre-signalling a more hawkish view.
    S&P 500 technical analysis
    Technically the S&P 500’s rebound last week from the 200-day moving average at 3950 has been a positive development and is in line with our central view.
    Providing the S&P 500 remains above the 200-day moving average at 3950 (closing basis), we continue to give the rally from the October low (viewed as countertrend or corrective) the benefit of the doubt, looking towards the August 4327 high.
    Aware that should the S&P 500 see a sustained close below 3950ish, it would confirm that the rally from the October lows has been corrective, and the downtrend has resumed.
    S&P 500 daily chart
      Source: TradingView
    Nasdaq technical analysis
    Technically the Nasdaq’s rebound last week from the 200-day moving average at 11,944 has been a positive development and, like the S&P 500, is in line with our central view.
    Providing the Nasdaq holds above 11,944 (closing basis) and allows the rally from the October lows to take another leg higher in March towards the August 13,740 high.
    Furthermore, a sustained close back below the 200-day MA at 11,944 would confirm that the rally from the October lows has been corrective and the downtrend has resumed.
    Nasdaq daily chart
      Source: TradingView
    Dow Jones technical analysis
    The Dow Jones has spent the first two months of 2023 consolidating its gains from the October low, above the support from the December 32,573 low and the 200-day moving average at 32,372 not to mention a good layer of resistance between 34,400 and 34,712.
    This sideways price action is viewed as part of a bullish correction and aAs such, we expect to see the Dow Jones test and break its December 34,712 high, before a move towards the April 2022, 35,492 high.
    It should be noted that if the Dow Jones loses the band of support 32,570/32,350 (closing basis), it would negate the bullish bias and warn that a deeper pullback is underway.
    Dow Jones daily chart
       
    Source: TradingView
  2. MongiIG
    As we talked about in our introduction to price action, markets are cyclical creatures. Prices go up, prices go down and as traders, the most we can hope to do is ride on the right side of the wave for a bit.
    But along the way there’s a number of deductions that traders can make that can allow for strategy to enter the picture, and in terms of trend, support and resistance is fairly important. Bullish trends will often price-in a series of higher-highs and higher-lows while bearish trends will show the opposite. But – markets aren’t always trending, as we’ll often see ranges or digestion pop-up when prices are fairly equalized. That’s what brings on inside bars and we’ll talk about those a little later in this sub-module.
    PRICE ACTION SUPPORT AND RESISTANCE
    As discussed throughout our education section, there’s a plethora of ways to find support and resistance levels. Fibonacci is a popular tool and psychological levels can carry some significant weight. But, if markets don’t acknowledge that support or resistance – what is its point? There isn’t one, right? The only utility for support and resistance is the ability to highlight something that may happen, while allowing the trader to adopt an objective framework for their own activity within a market.
    As we looked at in our Price Action Support and Resistance article, there’s a couple of primary ways to use prior price action to find actionable levels to work with. But we also ended by saying that there’s one more way that traders can incorporate prior price movements in the effort of finding support and resistance, and that’s by incorporating older levels that may come back into the picture.
     
    Support and Old or Prior Resistance
    When in an up-trend, prices will often ebb and flow with a general bias towards the ebbing as opposed to the flowing. And when prices do pullback, traders are often looking for that point with which it becomes attractive again to buy. One possible reference point – prior swing-highs or prior points of resistance. And, in the case of down-trends, prior swing-lows or points of support as potential resistance. Let’s look at an example in GBP/USD to illustrate.
    Each of the blue lines below indicate an area of prior resistance that came into play as support. And red lines indicate an area of support that’s come into the picture as resistance.
    GBP/USD Weekly Price Chart

    Chart prepared by James Stanley; GBP/USD Weekly chart, Oct 2019 – April 2022
    Let’s get a bit more granular with this situation, using the below chart. We’ll begin with the red vertical line, after which price action puts in a swing at the 1.4013 level (marked as ‘1’ on the below chart). You can see multiple wicks on the daily chart in the red box accompanying that line, and this is highlighting a resistance reaction that holds from early-March through the May open (marked as ‘2). That resistance offered a few different inflections but buyers eventually break through, indicated by the green box in early-May (marked as ‘3’).
    But, buyers are thwarted at the same exact level that had come into play a few months earlier, plotted at 1.4243, and after bulls failed to breakthrough, sellers eventually take control and elicit a breakdown back-below the 1.4013 price. Buyers push down to the purple box, around 1.3800, before a bounce develops and that sends prices right back into that same zone of resistance (marked as ‘4’).
    That inflection leads to another fresh low, around the 1.3600 area, but sellers still don’t have full control, as price pushes back up to that same resistance zone but fails to get all the way there. This is a lower-high, and indication that sellers were on the sidelines and unwilling to wait for price to test the high. They enter a bit earlier, and this leads to a lower high before sellers swing a bit more aggressively (marked as ‘5’).
    GBP/USD Daily Price Chart (2021 – Feb 2022)
    Chart prepared by James Stanley; GBP/USD Daily chart, Jan 2021 – March 2022
    After that second resistance reaction (marked by ‘5’ above), sellers push price right back to support, which isn’t ready to give way yet. That happens a couple of months later.
    But, perhaps more importantly, in early 2022 trade, that same zone around the 1.3600 handle becomes a massive spot of resistance. This gyration has now taken six months but there’s still a discernible bearish bias as indicated by the lower-highs. But, notably, notice how intense the resistance reaction is in the white box on the right side of the chart (marked as ‘6’). This took almost three weeks to resolve but, once it did, prices started a sell-off that ran for a long time. Along the way there were more items of short-term resistance coming in as support (marked as ‘7’) and prior items of support coming in as resistance (marked as ‘8’). In box 9, I wanted to highlight the build of lower-highs, below box 8 as that prior swing was continuing to help form some resistance.
    GBP/USD Daily Price Chart (2021 – May 2022)
    Chart prepared by James Stanley; GBP/USD Daily chart, Jan 2021 – May 2022
    --- Written by James Stanley, Senior Strategist for DailyFX.com
  3. MongiIG
    It would be premature to call the US dollar’s recent rebound a reversal of the downward; recent Fed speak has been hawkish, putting the spotlight on Powell’s speech coming Friday and what’s next for EUR/USD, GBP/USD, and USD/JPY?
      /content/igcom/en_AU/profile/manish-jaradi
      Forex Market trend Federal Reserve Euro USD/JPY EUR/USD  Manish Jaradi | IG Analyst, Singapore | Publication date: Wednesday 17 May 2023  The rebound in the US dollar over the past week or so appears to be a consolidation, and not a reversal of the well-established downtrend, at least yet.

    The US dollar index’s (DXY index) rise above immediate resistance at the early-March high of 102.40 confirms that the immediate downward pressure has eased somewhat, thanks to hawkish remarks from US Federal Reserve officials.
    Richmond Fed President Thomas Barkin said he was “comfortable” with raising rates further if needed to lower inflation. Cleveland Fed chief Loretta Mester said the US central bank was not at a point yet where it can hold rates steady.
    US dollar index (DXY) daily chart*
      Source: TradingView
    This follows remarks from New York Federal Reserve President John Williams last week that the Fed may not be done raising rates. Still, the DXY index's trend is broadly bearish and the recent rebound is a consolidation, as the daily colour-coded candlestick chart based on trending/momentum indicators shows.
    Markets are currently pricing in an 18% chance of another 25 basis points of a rate hike at the June meeting. The odds of 75 basis points rate cuts by the year-end have scaled back to 35% from 42% a week ago, according to CME’s FedWatch tool. Key focus is now on US Fed Chair Powell’s speech on May 19 – a hawkish tilt could keep the USD well bid.

    Furthermore, the patchy post-Covid rebound in China and deepening producer price deflation have raised concerns regarding slowing demand in the world’s second-largest economy weighing on commodity-sensitive currencies like the Australian dollar and the New Zealand dollar.
    EUR: slight soft bias
    EUR/USD’s break last week below minor support at the early-May low of 1.1000 indicates that the upward pressure is easing.
    EUR/USD weekly chart
      Source: TradingView
    The next support to watch would be the 89-day moving average, coinciding with the lower edge of the Ichimoku cloud on the daily chart (at about 1.0750). Any break below could pave the way for a deeper setback toward the March low of 1.0510. However, as of now, the probability of a significant fall looks low given the broader uptrend is in place. published May 16.
    EUR/USD daily chart
      Source: TradingView
    GBP/USD: rally stalls at resistance
    While the broader trend remains bullish, the recent retreat from a slightly upward-sloping trendline, associated with weakening upward momentum, is a reflection of slight fatigue in the rally. Still, GBP/USD has quite a bit of cushion around 1.2200-1.2350 which could limit any further downside.
    GBP/USD daily chart
      Source: TradingView
    USD/JPY: broad range looks set to continue
    USD/JPY’s rise above the initial ceiling at the May 10 high of 135.50 confirms that the immediate downward pressure has faded. This coupled with the rebound from a stiff cushion on an upward sloping trendline from the end of April confirms that the pair remains in a broad 133.00-138.00 range for now.
    USD/JPY 240-minute chart
      Source: TradingView
    *Note: In the above colour-coded chart, blue candles represent a Bullish phase. Red candles represent a Bearish phase. Grey candles serve as Consolidation phases (within a Bullish or a Bearish phase), but sometimes they tend to form at the end of a trend. Note: Candle colors are not predictive – they merely state what the current trend is. Indeed, the candle color can change in the next bar. False patterns can occur around the 200-period moving average, or around a support/resistance and/or in sideways/choppy market. The author does not guarantee the accuracy of the information. Past performance is not indicative of future performance. Users of the information do so at their own risk.
  4. MongiIG
    Rolls Royce’s impressive numbers have pushed the stock ever higher. Can the FTSE 100 blue-chip fly above 400p?
    Source: Bloomberg   Indices Shares FTSE 100 Stock Free cash flow Roll-Royce   Written by: Charles Archer | Financial Writer, London   Publication date: Tuesday 27 February 2024 12:50 Rolls-Royce (LON: RR) shareholders have enjoyed an excellent couple of years. Despite the value destruction down to less than 39p per share at the start of October 2020, the stock has now recovered to 361p — and has risen by 21.2% year-to-date alone.
    With some analysts predicting a rise to 400p amid excellent full-year results, Rolls-Royce shares may once again become the best-performing FTSE 100 stock of this year.
    Rolls-Royce share price: 2023 full-year results
    With CEO Tufan ‘Turbo’ Erginbilgic taking the reins at the start of last year, few would have guessed the impact. Of course, while the FTSE 100 company has benefitted from the wider recovery of civil aviation, Rolls has improved on almost every metric.
    Underlying operating profit more than doubled from £652 million to £1.6 billion, driven by the recovering civil aerospace division, and reflecting the impact of ‘strategic initiatives, with commercial optimisation and cost efficiency benefits across the group.’ For context, the average analyst forecast had been for £1.4 billion, and in further good news, Rolls delivered an underlying margin of 10.3%.
    Free cash flow rose to a record £1.3 billion, driven by operating profit and continued LTSA balance growth — while return on capital more than doubled to 11.3%. Statutory net cash flow from operating activities also increased, by £1 billion to £2.5 billion. And importantly in a time of elevated interest rates, the FTSE 100 operator saw net debt fall from £3.3 billion to a much more manageable £2 billion.
    Erginbilgic enthused that the company’s ‘transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives. This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures.’
    Where next for Rolls-Royce shares?
    While supply chain challenges are expected to persist for the next 18 to 24 months, Rolls-Royce still expects underlying operating profit to be between £1.7 billion and £2 billion in 2024 — with free cash flow to rise to between £1.7 billion and £1.9 billion.
    Erginbilgic notes that ‘our strong delivery in 2023 gives us confidence in our 2024 guidance and is a significant step towards our mid-term targets. We are unlocking our full potential as a high-performing, competitive, resilient, and growing Rolls-Royce.’
    In the key civil aerospace division, the company expects that 2024 large EFHs will grow to between 100 and 110% of its pre-pandemic level, based on civil net LTSA creditor growth at the low end of the mid-term range of between £800 million and £1.2 billion — compared to £1.1 billion in 2023.
    And the 2023 performance and 2024 guidance on operating profit and free cash flow means that by 2024 Rolls will have delivered more than 50% of the improvement set out in our mid-term targets.
    For context, it continues to target underlying operating profit of between £2.5 billion and £2.8 billion, operating margin of 13% to 15%, free cash flow of £2.8 billion to £3.1 billion and return on capital of circa 16-18% in the mid-term — all based on expectations for a 2027 timeframe.
    Despite widespread speculation, the company has chosen not to make any shareholder payouts for 2023. No dividends is often poorly received by the markets, but not in this case. Rolls did recommit to reinstating and growing shareholder distributions once it’s ‘comfortably within an investment grade profile and the strength of our balance sheet is assured.’
    On the other hand, the CEO recently told The Telegraph that he was not ‘ruling out’ building the first small modular nuclear reactors outside of the UK due to the slow pace of approval. The company — in which the government owns a golden share — is one of only three that have submitted plans for regulatory approval in the UK so far and Erginbilgic notes that ‘we are ahead of everyone else.’
    For context, SMRs are expected to be partially publicly funded via new body Great British Nuclear and may become a core component of the country’s energy strategy.
    Rolls-Royce may continue to rise through the FTSE 100 regardless. JP Morgan has a 400p price target on the stock, noting that ‘a much higher percentage of Rolls-Royce’s long-term service agreements will convert into profit.’ Goldman Sachs has a 370p target — and Citi are most bullish, with 431p the goal.
         
    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.
  5. MongiIG
    Alphabet shares are falling after worse-than-expected growth in Q1 results. With fellow tech giants stuttering, the Google owner could be next.
    Source: Bloomberg   Shares Alphabet Inc. Google Revenue Advertising Share repurchase  Charles Archer | Financial Writer, London | Publication date: Wednesday 27 April 2022  A key beneficiary of the covid-19 pandemic tech stock boom, Alphabet (NASDAQ: GOOGL) shares were changing hands for as much as $2,859 just three weeks ago.
    But after yesterday’s trading update, they sunk to as low as $2,215 in after-hours trading. Despite recovering to $2,305, worse may yet be to come.
    Alphabet share price: Q1 2022 results
    At first glance, Q1 results were excellent for the Google and YouTube owner. Revenue grew by 23% year-over-year to $68.01 billion, just shy of the Refinitiv analyst consensus of $68.11 billion.
    CFO Ruth Porat said ‘we are pleased with Q1 revenue growth of 23% year over year. We continue to make considered investments in Capex, R&D and talent to support long-term value creation for all stakeholders.’
    However, this represents a slowdown compared to the 34% growth of Q1 2021. And profit was only $16.436 billion, or $24.62 per share, over a dollar below the $25.76 expectation as costs crept up.
    But its all-important advertising revenue grew by 22% to $54.66 billion. And encouragingly, the tech giant brought in $39 billion from Google search revenue, $8 billion more than a year ago.
    But YouTube advertising revenue only rose by 14% to $6.87 billion, compared to a meteoric rise of 49% in the same quarter last year, when advertising spending exploded as the pandemic began to recede.
    But this sharp slowdown should not have come entirely as a surprise. Cowen analyst John Blackledge had previously noted that TikTok could disrupt YouTube’s advertising revenue stream much like it already has Meta, with the challenger gaining ground in particular with the crucial 18–24-year-old segment.
    However, it saw strong growth in demand for Google Cloud, with revenue in the loss-making division up 43% to $5.82 billion. CEO Sundar Pichai emphasised that ‘Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues.’
    Source: Bloomberg Where next for Alphabet shares?
    Q1 results are a mirror of Alphabet’s complex investment case. Insider Intelligence data shows Google will capture 29% of global online ad spend in 2022, and remain the market leader for the twelfth year in a row. And in 2010, Q1 revenue was a mere $6.8 billion. Alphabet’s market position has increased revenue tenfold in just 12 years.
    Moreover, it’s bought back $81 billion of shares over the past two years. And yesterday, it authorised an additional $70 billion of further share repurchases. This is a significant acceleration of its strategy to return capital to shareholders, and it was already the higher repurchaser of its own stock except for Apple.
    Further, July’s proposed stock split could see Alphabet’s market cap rise as whole shares once again become affordable to retail investors.
    But four significant headwinds are coming for the NASDAQ giant.
    First, Deutsche Bank has warned a ‘major recession’ is coming for Alphabet’s home market, the United States. As business and personal expenses continue to increase exponentially, advertising has in the past been the first department to be cut.
    Second, there are increasingly hawkish noises coming from the Federal Reserve. US inflation is at a multi-decade high of 8.5%, and the Reserve’s mandate is to keep it at 2%. With further inflationary rises already predicted, the likelihood that the US’s central bank will increase interest rates to pre-financial crisis levels is rising. Again, this would almost certainly result in falling advertising spending.
    Third, tech valuations are based on exuberant growth. Alphabet’s share price is based not just on today’s results, but on the assumption that its growth rate will remain constant over the next few years. Meta's and Netflix's sharp share price falls are testament to what happens if this trajectory changes.
    Finally, Alphabet’s anti-trust problems may just be getting started. Long-time foe Jonathan Kanter was recently appointed as assistant attorney general of the Department of Justice Antitrust Division. And after Elon Musk’s Twitter purchase, the limitation of market power is back on the political agenda.
    Investors could soon be questioning whether tech’s Ozymandias may one day crumble.
    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
    * Best trading platform as awarded at the ADVFN International Financial Awards 2021
  6. MongiIG

    Ahead of the game

    By MongiIG,


    Market News
    Your weekly financial calendar for market insights and key economic indicators for April 24, 2023.
      Source: Bloomberg
      Indices Inflation Monetary policy Interest rate  Tony Sycamore | Market Analyst, Australia | Publication date: Friday 21 April 2023  Reading time: 4 minutes
    FOLLOWING THE BANKING crisis last month, there was an expectation that central bank rate hikes would soon give way to rate cuts or, at worse, a pause. However, central bank communique this week and mixed data suggest central banks have unfinished business in their battle to tame inflation.
     
     
    RBA minutes confirmed a close decision to pause rate hike cycle, with Australian interest rate pricing in 25% chance of 25bp rate hike in May UK inflation remains high, with BoE expected to raise rates by 25bp to 4.50% US inflation expectations rose to 4.6% in April Fed officials have mixed views on interest rates, with Bullard favoring 5.5-5.75% range, while Bostic prefers one more rate rise then hold Q1 2023 earnings reports have started, with Netflix and Tesla seeing share price drops after reporting VIX index fell to 16.5, its lowest since Jan 2022 RBA Review released key recommendations, including continuation of 2-3% inflation target and creation of separate Monetary Policy and Governance Boards.  
     
     
    ↵
    Wednesday, April 26 at 11.30am AEST: AU CPI
    Thursday, April 27 at 11.30am AEST: ANZ Business Confidence
     
    Friday, April 28 (no set time): Bank of Japan Interest Rate Decision  
    Wednesday, April 26 at 12.00am AEST: Consumer Confidenc
    Thursday, April 27 at 10.30pm AEST: Q1 GDP Advanced
    Friday, April 28th at 10.30pm AEST: Core PCE Price Index
     
    Friday, April 28th at 6:00pm AEST: EZ and DE - Q1 GDP flash
    Friday, April 28th at 10:00pm AEST: DE - Inflation
      Source: Bloomberg
    Australia + NZ
    Q1 2023 CPI report
    Wednesday, April 26th at 11.30am AEST:

    As revealed in the RBA meeting minutes for April, the Board discussed the various pros and cons of raising rates by a further 25bp on top of a substantial 350bp of rate rises or keeping rates on hold at 3.60%. “[O]n balance, [we] agreed that there was a stronger case to pause at this meeting and reassess the need for further tightening at future meetings.”
    The minutes reiterated “that it was important to be clear that monetary policy may need to be tightened at subsequent meetings” and, in the final paragraph, noted the Board’s future cash rate decisions would depend on developments in the global economy, trends in household spending and the outlook for inflation and the labour market.”
    The release of stronger-than-expected labour market data in mid-April confirmed that the labour market remains extremely tight. Should next week’s all-important CPI print fail to confirm that inflation is falling as quickly as anticipated, the RBA may act on its tightening bias and hike the cash rate again as soon as next month.
    The key numbers:
    Headline CPI is expected to increase by 1.3% in Q1 2023 for an annual rate of 6.9%, falling from 7.8% in Q4 2022. Trimmed mean is expected to rise by 1.4% in Q1 2023 for an annual rate of 6.7%, falling from 6.9% in Q4 2022 Trimmed mean chart
      Source: TradingEconomics
    Japan
    BoJ interest rate decision
    Friday, April 28th – no set time:
    The new Bank of Japan Governor, Kazuo Ueda, began his five-year term earlier this month tasked with the responsibility of exiting the ultra-loose monetary policy of his predecessor Kuroda and delivering a “soft landing”.
    While no adjustment to YCC policy is expected this month, a surprise move cannot be ruled out, which would send both the Nikkei and USD/JPY sharply lower.
    Bank of Japan
      Source: Bloomberg
    US
    Q1 2023 earnings reports
    Earnings reports are set to flow in the coming week from Megatech companies, including Alphabet, Meta, Microsoft and Amazon, as well as Coca-Cola, PepsiCo, McDonald’s, Boeing, Exxon and Chevron.
    Core PCE Price Index
    Friday, April 28th at 10.30pm:
    The Feds preferred measure of inflation, the Core PCE Price Index, is expected to fall to 4.6% in March from 4.7% in February. This would be the lowest reading in sixteen months.
    A higher-than-expected number would all but seal the deal for a 25bp rate hike at the upcoming May FOMC meeting and raise concerns that higher rates are needed to tame inflation.
    Core PCE Price Index chart
      Source: TradingEconomics
    Economics calendar
    All times shown in AEST (UTC+10) unless otherwise stated.
     
     
     
     
     
     
     
     
      Source: DailyFX
     
  7. MongiIG

    Ahead of the game: May 15, 2023

    By MongiIG,


    Market News
    Your weekly financial calendar for market insights and key economic indicators.

     Tony Sycamore | Market Analyst, Australia | Publication date: Friday 12 May 2023  Reading time: 5 minutes
    IT WAS A MIXED WEEK for key US stock indices as the Dow Jones closed lower eight sessions in nine, while the tech-heavy Nasdaq closed at its highest level in nine months (August 22).
    The push to fresh highs in the Nasdaq followed a cooler-than-expected April CPI report which showed headline inflation fell to 4.9% - its lowest level in over two years, raising hopes that the Fed will pause its rate hiking cycle when it next meets in June.
    Also, this week, the Australian Federal Treasurer, Jim Chalmers, handed down the Federal Budget and announced the first budget surplus since the 2008 financial crisis pushed the Australian budget into deficit.
    The week of May 15 will be another big week, headlined by the RBA meeting minutes as well as employment data in Australia and the UK and likely feature more headlines around the US Debt Ceiling negotiations as the “X-date” approaches.
     
     
    The Federal Treasurer announced Australia’s first budget surplus since 2007/08 US President Biden and Speaker McCarthy's meeting made no progress on the debt ceiling, which could hit the "X date" in early June The SLOOS survey revealed that the lending standards' tightening wasn't as severe as feared Republic First Bancorp shares rose 8% and PacWest traded at $6.08, moving away from last week's $2.48 low Core US CPI rose by 0.4% in April, allowing the annual rate to ease to 5.5% from 5.6% previously Headline inflation increased by 0.4% MoM, and the annual rate fell to 4.9% - the first time below 5% in two years The tech-heavy Nasdaq traded to its highest level in nine months As expected, the BOE raised rates by 0.25% to 4.50% and sounded hawkish on potential further tightening Oil's rebound lost momentum before hitting $75.00, due to Russia failing to follow through on its promised production cut, and recession concerns resurfaced The measure of fear on Wall Street, the Volatility (VIX) index, fell 1.43% to 16.93.  
     
     
     
    AU - RBA Meeting Minutes (Tuesday, May 16 at 11.30 am AEST) AU - Wage Price Index (Wednesday, May 17 at 11.30 am AEST) AU - Labour Force Report (Thursday, May 18 at 11.30 am AEST)  
     
     
    CN - Industrial production, retail sales, FIA and Unemployment (Tuesday, May 16 at 12.00 pm AEST) JP - Q1 GDP (Wednesday, May 17th at 9.50 am AEST) JP - Inflation (Friday, May 19 at 9.30 am AEST)  
     
     
    US - Retail Sales (Tuesday, May 16 at 10.30 pm AEST) US - Philadelphia Manufacturing Index (Thursday, May 18 at 10.30 pm AEST)  
     
     
    UK - Employment (Tuesday, May 16 at 4 pm AEST)  
      Source: Bloomberg
     
    Australia
    RBA Meeting Minutes
    Tuesday, May 16 at 11.30 am AEST
     
    The Minutes from the Reserve Banks meeting in May are scheduled to be released Tuesday, May 16, at 11.30 am. At its meeting in May, the RBA surprised the market by raising the cash rate by 25bp from 3.60% to 3.85%, ending its pause after just one month.
    The RBA's eleventh rate rise in twelve months defied consensus expectations that the RBA would extend its pause to permit the RBA time to achieve its stated goal of allowing more time to assess the impact of its rate hiking cycle.
    The decision came despite a weaker-than-expected Q1 2023 inflation report released just a week earlier. The RBA noted in the statement that accompanied the surprise rate hike that “inflation in Australia has passed its peak, but at 7% is still too high and it will be some time yet before it is back in the target range.”
    The RBA retained its tightening bias and noted that a further tightening of “monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve."
    The Board meeting minutes would be expected to reiterate the sentiments outlined above. They will be closely scrutinised for any signal on the timing or metrics that would prompt the RBA to act on its tightening bias and what factors might see the RBA pause its rate hiking cycle.
    RBA cash rate chart
      Source: RBA
     
    Australian Labour Force Report
    Thursday, May 18 at 11.30 am AEST

    The Australian Labour Force report for April is due for release Thursday morning, May 18, at 11.30 am AEST.
    After a decline in January (-10.9k), employment bounced back strongly in February (+64.6k) and remained strong in March (+53k), keeping the unemployment rate steady at 3.5% - at 50-year lows.
    The market will seek evidence that the RBA’s aggressive interest rate hiking cycle is taking some heat out of a very hot labour market. Aware that another robust jobs report would increase the likelihood that the RBA raises its cash rate at its next meeting in June by 25bp to 4.10%.
    Currently, the interest rate market sees ~ an 8% chance that the RBA will raise rates by 25 bp in June. However, as we learned from the May meeting, the RBA is unafraid to go against market pricing.
    Australian unemployment rate chart
      Source: TradingEconomics
     
    UK
    UK Unemployment data
    Tuesday, May 16 at 4 pm AEST

    Last month the unemployment rate in the UK increased by 0.1% to 3.8% in the quarter to February 2023. It was the highest level since the second quarter of 2022, providing preliminary evidence that a red-hot labour market is finally cooling.
    The March employment report is expected to see the unemployment rate remain at 3.8%. However, a higher rate would go some way to putting the minds of a hawkish BoE at ease who expect the unemployment rate to “remain below 4% until the end of 2024, before rising over the second half of the forecast period to around 4½%.”
    UK unemployment rate
      Source: TradingEconomics
     
    US
    Q1 2023 earnings reports
    Earnings season continues with reports set to drop from companies including giant retailers Home Depot (May 16), Target (May 17), and Walmart (May 18).
    According to FactSet, with 85% of the S&P 500 companies having reported, EPS growth is -2.2% YoY vs. -6.7% expected, and 79% of companies have beaten EPS expectations by an average of 7%.
     
      Economics calendar
    All times shown in AEST (UTC+10) unless otherwise stated
      Source: DailyFX
      Source: DailyFX
      Source: DailyFX
      Source: DailyFX
      Source: DailyFX
      Source: DailyFX
       
    Source: DailyFX
  8. MongiIG
    Alibaba, the Chinese e-commerce legacy business is facing real challenges to revive its growth despite China’s reopening and the abating regulatory fears.
    Source: Bloomberg   Shares Alibaba Group Stock
    Hebe Chen | Market Analyst, Melbourne | Publication date: Friday 17 February 2023  Alibaba Earnings Date
    Alibaba Group Holding Ltd (All Sessions) will report its unaudited financial results for the fourth quarter before the US market opens on Thursday, February 23, 2023.
    Alibaba Earnings Expectation
    The consensus EPS forecast for the quarter is $1.89, higher than the $1.5 reported in the previous quarter but remains 14% lower than the same quarter in 2021. The group’s revenue is anticipated to shrink 6% year-over-year to $35.85 billion.
    Source: Nasdaq Alibaba Earnings Key Watch
    A growth engine has lost its steam? Alibaba used to impress its shareholders with a convincing track record of growth. Its five-year annualized earnings growth rate is up to 15%. However, since early 2022, the Chinese tech giant’s earnings have been declining for three straight quarters due to the subdued revenue growth.
    Source: Alibaba As shown in the most recent earnings, Alibaba’s core sector, China commerce which grew by double-digit before 2021, had dropped for two consecutive quarters. Unfortunately, the downtrend is anticipated to continue in to-be-reported quarter. One strong indication is that Alibaba didn't release specific gross sales volume for its proudly-created Singles Day sales as it did before, only indicating that the trading volume was comparable to the previous year, a sharp slowdown from a 26% growth in 2020.
    Fading regulatory risk? Alibaba’s regulatory nightmare started in late 2020 when the Chinese government stopped the IPO process of an affiliate company of Alibaba Group, Ant Group, which would have been the biggest IPO in history. Since then, Alibaba’s stock prices plunged by 15% within a month and 50% a year later.
    There is a wishful prospect that the tech giant should have shrugged off the regulatory fear since its legacy founder Jack Ma had given up control of the business. However, this wasn’t enough to appease Beijing. On 4 January 2023, a Chinese state investment division acquired 1% stake in an Alibaba subsidiary and another tech giant Tencent to extend its influence from imposing hefty fines to being directly involved in business operations. In light of this, it’s certainly not safe to claim that the regulatory risk has become part of history for the tech giants. In fact, there’s a growing potential that those “transitory risks” could become “non-transitory" .
    AI race Alibaba Group confirmed on February 8th that the company was developing a ChatGPT-styled tool that had entered the internal testing phase. Alibaba's US-listed shares rose 3.2% after the news. While it's too early to know how quickly the age of AI will dawn for users everywhere or who will be the leading player in that space, it's still encouraging to the shareholders that Alibaba is up to pace on generative AI developments. This next-generation opportunity, if works, will help the beleaguered e-commerce giant to expand its legacy as a leading tech player in China and potentially the world.
    Alibaba Share Price
    After rising 89% from November 2022, Alibaba’s stock price peaked at around $120 in January. However, a retreat occurred in February is sending the price back to its 50-day MA, which sits around $103 at the moment. A break below would paint a double-top shape in the weekly chart, exposing downside risks toward the 20 and 50-week MA. On the flip side, the price must conquer the descending trendline in the daily chart to rechallenge the 20-day MA above the $110 region.
    Alibaba Daily Chart
    Source: IG Alibaba Weekly Chart
    Source: IG Alibaba Earnings Summary
    Alibaba is struggling to preserve its growth momentum The regulatory risks associated with China’s tech giants remain in place Alibaba’s AI developments could open the door to the next-generation opportunity
  9. MongiIG
    Despite a turbulent past three years, Alibaba Group Holding Limited (BABA) is now being closely watched by investors as China reopens and the company's AI-powered ecosystem continues to make exciting progress.
    Source: Bloomberg   Shares Alibaba Group Artificial intelligence China Baidu Company Hebe Chen | Market Analyst, Melbourne | Publication date: Monday 15 May 2023  Alibaba earnings date
    Alibaba Group will report its March quarter earnings and full fiscal Year 2023 results on 18 May 2023 before the market opens.
    Alibaba earnings expectation
    According to the consensus forecast for the upcoming quarter, Alibaba is expected to report Earnings per share (EPS) of ¥9.45, representing a 55% increase from the previous quarter.
    Meanwhile, revenue is anticipated to reach ¥209.29 billion (bn), a 4.4% improvement year-over-year (YoY). In the fourth quarter of 2022, the company reported a revenue of ¥247.76 bn ($35.92 bn), a Yoy increase of 2.13%. Overall, Alibaba's last earnings report was mixed, with the company beating revenue estimates but missing EPS expectations. Nonetheless, the company's net profit margin increased significantly (from 3% to 14%), which is an encouraging sign for the upcoming quarters.
    Source: Alibaba Alibaba earnings key watch
    Alibaba Group Holding Limited (BABA) has weathered a turbulent three years, facing multiple headwinds, including a slowing Chinese economy, intensified government regulations, and the lingering impact of COVID-19 pandemic restrictions. However, the company has shown its resilience. With the reopening of China and the return of domestic demand, investors are keen to see whether clear skies are finally ahead for Alibaba.
    From one to six
    Alibaba announced on 28 March 2023 that it would be splitting its business into six units, “the most significant governance overhaul in the platform company’s history.” These six units include:
    Cloud Intelligence Group Taobao Tmall Commerce Group Local Services Group Cainiao Smart Logistics Global Digital Commerce Group Alibaba said the split is part of its efforts to "accelerate the company's transformation into a technology-driven company to better serve its customers and partners." Investors praised the move and pushed the BABA group's stock price up more than 10% after the announcement.
    Under the new structure, BABA will become more decentralised, giving each business unit the autonomy and motivation to compete more effectively with its rivals. The reorganisation is also expected to lead to cost savings. Alibaba expects to save $1 bn by the end of 2023.
    While only time can tell whether the split will be a success for the Chinese e-commerce giant, it is a positive sign that the company is moving on to shrug off the past cloud. More importantly, by splitting into smaller sizes, the new shape of the business kingdom is anticipated to ease the regulatory pressure from the wary policy markers.
    AI-powered Ecosystem
    The race to develop AI is a global one, but China is quickly becoming a major player in the field. Alibaba unveiled its own ChatGPT-like Tongyi Qianwen AI in April. This AI bot will be integrated with Alibaba’s Cloud Services. While it’s only a start, Alibaba said it plans to have all applications across its ecosystem, including e-commerce, search, navigation and entertainment, to be powered by the AI-based model in the near future. That’s to say, despite the decentralised transformation, company like Alibaba still enjoy the heads-up by unifying its scalability today to seize the AI future which appears only move faster.
    However, this is also a new battlefield with no shortage of challenges. First is the current competition. Alibaba and Baidu are two of the leading Chinese tech companies in the AI space. Baidu, the Chinese version of Google with 665 million monthly active app users, was ahead of Alibaba in launching its AI bot Ernie in March.
    The other challenge is the tightening regulations. According to the newly-proposed rule by China’s Cyberspace Administration of China (CAC), firms will be required to submit a security assessment to the government before using generative AI products to provide services to the public. In addition, the content generated by the AI tool will be under strict scrutiny. Clearly, the nation’s policy markers view this new technology trend as more of a rising concern than opportunity. As such, whether or not this speedy AI development will turn to another round of regulatory examination will be another crucial point.
    Alibaba share price technical analysis
    China’s reopening catalyst in late 2022 saw the Aliaba’s stock price regain momentum and soar by nearly 100% from November and peaked at $125 on January 25. However, since that peak, Alibaba’s stock price resumed its downtrend and plunged to $80 in two months.
    Despite a snap rebound after Alibaba announced its restricting plan, the mid-term downtrend remains valid. Before touching the descending trend line, there are multiple pressure levels in the prospect. 50 and 200 days moving averages at around $88-$91 are the imminent ones. Above that, 100-day moving average (MA) is waiting to be conquered.
    In a bulls-favourite scenario that the level of $103 can be reached, a double-bottom shape should bode well for Alibaba to deliver a bull-turn. Otherwise, based on the current daily chart’s setup, it’s more likely that the price would stay in the triangle space boarded by the $80 bottom line and the downtrend trend line for some time.
    Source: IG group IG client sentiment
    Alibaba earnings summary
    Alibaba is expected to demonstrate great improvements in earnings and margin Alibaba’s new structure is welcomed by the investors Alibaba aims to build up an AI-powered ecosystem Alibaba’s share prices have stayed in a downtrend since early April
  10. MongiIG
    Alibaba Group will announce September quarter results on November 16, 2023, US Eastern Time. Despite its robust financial performance in the past quarter, Alibaba’s stock prices have dropped 20% in the past three months, why?
    Source: Bloomberg   Forex Shares Alibaba Group China Artificial intelligence United States  
    Hebe Chen | Market Analyst, Melbourne | Publication date: Tuesday 14 November 2023 09:17 Alibaba earnings date
    Alibaba Group will announce September quarter results on November 16, 2023 7:30 am US Eastern Time (November 16, 2023 8:30 pm Hong Kong Time).
    Alibaba earnings expectations
                       
    September Quarter
    June Quarter            
    YOY
    EPS($)      
    $2.12
    $2.17
    17%
    Revenue ($)
    $30.79B
    $32.29B
    6%
    Source: Alibaba
    Source: Nasdaq Alibaba earnings key watch
    Alibaba's journey out of its long winter appears to be more bumpy than initially anticipated. After enduring three years of harsh regulatory clampdown from the Chinese government, the tech giant was expected to breathe a new life this year.
    In the June quarter, Alibaba did deliver a robust result, with a 14% year-over-year increase in revenue to RMB 234,156 million (US$32,292 million). Its income from operations surged by 70%, accompanied by exceptional cash flow: net cash flow provided by operating activities rose by 34%, and free cash flow experienced a remarkable 76% increase.
    Source: Alibaba Despite its robust financial performance in the past quarter, Alibaba has encountered notable challenges since the third quarter of the year, primarily stemming from an unexpectedly softening domestic consumer market in China. The world's second-largest economy transitioned into deflation territory in July, with producer prices experiencing a continuous decline for 13 consecutive months up to October. In fact, the 20% decrease in Alibaba's share prices over the past three months signals global investors' fragile confidence in the Chinese e-commerce giant. It is evident that investors remain skeptical about BABA's recovery trajectory moving forward.
    Beyond its financial performance, a crucial aspect to monitor is Alibaba's progress in AI development. Just two weeks ago, on October 31st, Alibaba launched the latest version of its artificial intelligence model, a significant development aimed at competing with its US counterparts such as Amazon and Microsoft. As the leading cloud player in China by market share, Alibaba's potential expansion into the global market with its leading AI and Cloud capabilities could mark the beginning of a new era for the Chinese tech giant, provided it achieves success.
    Alibaba earnings technical analysis
    Turning to the weekly chart of BABA, following last week's retracement, BABA’s stock price has reached a crucial support level at $77-$80. Given that the price is currently trading below all its short-term and long-term trendlines, sellers may keep the pressure on the current support level, potentially sending the price to revisit its 12-month low at $74.
    On the flip side, only a breakout from the Jan-Oct downward trendline could help the bulls stage a comeback, with overhead resistance located at $89-$90. Further clearance of the 100-day MA could usher in a rally toward the July highs near the $97-$100 handle.
    Alibaba stock rating and IG sentiment
    Source: TipRanks/IG
       
    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.
  11. MongiIG
    The Chinese tech behemoth has been on a rollercoaster all through the course of 2021.
    Source: Bloomberg   Hebe Chen | Market Analyst, Australia | Publication date: Friday 28 January 2022  When to expect the earnings report
    Alibaba Group Holding Limited is estimated to report earnings on 1 February for the fiscal fourth quarter (Q4) ending in December 2021.
    What to expect?
    According to Zacks Investment Research, based on three analysts' forecasts, the consensus earnings per share (EPS) forecast for the quarter is $2.05. The reported EPS for the same quarter last year was $2.98.
    Source: Nasdaq.com Source: Nasdaq.com  
    Alibaba share price review
    The Chinese tech behemoth has been on a rollercoaster all through the course of 2021 after the Chinese government began a series of industry-wide clampdowns starting in April 2021.
    Since then, the price of BABA has skydived from $225 to close at $118 on December 31st, nearing a 50% loss. During the same period the S&P 500’s yearly return was 37% while the Nasdaq gained 21.4%.
    A big miss in third quarter (Q3) earnings and the delisting of DIDI were another two key events which affected the online retail giant recently. Alibaba experienced one of its worst days following Q3 earnings in November with a jaw-dropping 11% intraday drop.
    The company’s long-term profitability became the most significant concern for its shareholders as the margin on its most profitable sector (commerce) decreased from 35% in the quarter ending 30 September 2020 to 19% a year later.
    Source: IG charts  
    Too cheap to be ignored?
    BABA's current valuation is only about 16x PE with a 20% growth rate, thus the PEG ratio is less than 1. In other words, the current price for BABA is already on the "Boxing day sale".
    Charlie Munger, a long-term partner of Warren Buffet, doubled his stake in Alibaba first in Q3 2021 and again in Q4. The move seemingly serves as a great example of the half-century investment legend's famous quote: "When a great company gets into temporary trouble, we want to buy them when they're on the operating table."
    However, if investors are looking to follow Mr Munger's path, the keyword is "temporary trouble". Despite the considerable challenges (i.e. inflation, supply chain, and tightening monetary policy) that many US tech companies continue to face, China's online conglomerate certainly has a longer list of "troubles".
    The Chinese government's fast-changing policy, the slowing down of the Chinese economy, and the trade battle between the US and China may see Alibaba follow its peer DiDi's delisting path. It's not safe to call any of them "temporary".
    Technical analysis
    Based on the daily chart, BABA’s share price has been skewing to the downside trajectory formed since early 2021. Current support can be found at $111, the level back to September 2016. A break through this level will send the price as low as $88.
    On the other hand, the 20 day moving average at around $124 will be the crucial resistance for the price to fight for if BABA looks to re-challenge the high this year at $131. The RSI indicator, from the weekly chart, shows the descending of the highs and supports a mid- term bear view.
    Daily Chart
    Source: ProRealTime  
    Weekly Chart
    Source: ProRealTime
  12. MongiIG
    Alibaba shares are soaring after increasing its share buyback program, while Beijing offers an olive branch to the US Securities and Exchange Commission. But this recovery may not last long.
    Source: Bloomberg   Shares Commodities Alibaba Group China Share repurchase Price  Charles Archer | Financial Writer, London | Publication date: Wednesday 23 March 2022  Immortalised in Antoine Galland’s 18th-century French translation of ‘Arabian Nights,’ Ali Baba was a poor woodcutter who stole treasure from the cave hideout of 40 thieves, the door to which could only be opened by uttering the magical command ‘Open Sesame!’
    Unfortunately for the company that inherited this namesake, making money in China is not quite so simple.
    Alibaba share price: buyback increases
    Alibaba (NYSE: BABA) has decided to upsize its share repurchase program by $10 billion to $25 billion, ‘in a sign of confidence about the Company’s continued growth in the future.’ Having already repurchased 56.2 million American depositary shares worth $9.2 billion, the renewed program will run for two years until March 2024.
    The e-commerce giant has also appointed Weijian Shan, executive chairman of investment group PAG, as an independent director.
    In further good news, despite the collateral damage being caused to Sino-American political relations by Russia’s invasion of Ukraine, the stand-off between US and Chinese regulators over US audit access to US-listed Chinese stocks appears to be thawing. The Securities and Exchange Commission had been on the verge of delisting some Chinese stocks over the issue.
    But now Reuters has reported that Chinese regulators have asked some US-listed Chinese companies, including Alibaba, to submit audit reports to US regulators.
    This de-escalation comes after the Chairman of China’s Financial Stability and Development Committee Liu He confirmed ‘the Chinese government supports companies from across industries to list abroad,’ promising Beijing would ‘boost the economy in the first quarter’ by introducing ‘policies that are favourable to the market.’
    The synergistic effect of these two shots of good news saw Alibaba shares shoot up 11% on Tuesday. But this upwards movement may not last.
    Source: Bloomberg Pandemic resurgence
    37 million Chinese citizens are now back in lockdown, as the ultra-infectious Omicron variant strains the country’s ‘dynamic zero’ covid-19 pandemic policy. Supply chain pressures, employee isolations and factory closures could all be hitting Alibaba soon.
    Alibaba and JD.com hold a duopoly over e-commerce in China, together controlling over 60% of total market share. However, Alibaba is the larger of the two and is also the country’s leader in cloud computing services. But with a $300 billion market cap, it comes in a distant second to global titan Amazon's $1.7 trillion value.
    On the other hand, Alibaba is generally characterised as a growth stock, while Amazon’s recent stock split may suggest it is moving to a consolidation stage. But China’s regulatory crackdown might now be having the desired effect of preventing companies like Alibaba from growing too powerful.
    In late 2020, Alibaba founder Jack Ma’s attempt to launch an Initial Public Offering of Ant Group was suspended when he publicly criticised Chinese authorities. The potentially $300 billion company now remains in regulatory purgatory.
    Since then, Chinese regulators have introduced anti-monopoly legislation focussed on the ‘platform economy,’ covering companies that provide services or goods via the internet. They have also introduced legislation shoring up data security and protection laws, often with little to no warning.
    The result has been large fines and record stock falls. Alibaba itself was fined $2.8 billion, or 4% of 2019 annual revenue, in an anti-monopoly probe in April last year. China claimed it was restricting merchants from doing business or running promotions on the site without paying exorbitant fees.
    But Deputy Chief Financial Officer Toby Xu argues ‘Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plans.’ In his defence, Q3 results showed revenue had risen 10% year-over-year to $38 billion, while annual active consumers of the ‘Alibaba Ecosystem’ grew by 43 million to 1.28 billion people.
    But its share price has fallen from a record high of $310 in October 2020 to a record low of $77 on Tuesday last week. Regulatory issues on both sides of the Pacific are anchors that have not been reeled in by the $9.2 billion spent on buybacks so far.
    While Alibaba shares have now recovered to $115, the additional $15 billion may not help the share price in the long-term either, especially if regulatory issues persist.
    And with an enlarged share buyback, this apparent growth stock might be warning investors that it cannot invest their money to generate future returns.
    Far from a cave of wonders, Alibaba’s share price surge may be fool’s gold.
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  13. MongiIG
    China’s faltering economy, strained Sino-American political relations, and a costly European growth strategy are all affecting the e-commerce giant.
    Source: Bloomberg   Shares Alibaba Group China Economy Big Tech E-commerce  Charles Archer | Financial Writer, London | Publication date: Wednesday 25 May 2022  Alibaba (NYSE: BABA) shares have fallen by 74% from their record $310 in mid-October 2020 to a mere $82 today.
    And reporting Q4 results tomorrow, the Chinese giant’s share price could have further to fall.
    Alibaba share price: 3 factors to consider
    1) China’s economic woes
    After years of growth, China could be in trouble. Retail sales fell by 11.1% in April compared to a year ago, industrial output was down 2.9%, and the unemployment rate in China’s 31 largest cities rose to a high of 6.7%.
    Worryingly, China’s Passenger Car Association reported passenger car production fell by an incredible 41.1%, with the auto sector accounting for one-sixth of Chinese jobs and 10% of retail sales.
    The National Bureau of Statistics noted the ‘increasingly grim and complex international environment and greater shock of (the) Covid-19 pandemic at home obviously exceeded expectation, new downward pressure on the economy continued to grow.’
    Nomura’s Ting Lu thinks ‘the unwinding of lockdowns has been extremely slow, due partly to the caution among local government officials…local lockdowns will still severely impact the production-end of the economy in May and (we) view a quick turnaround as all but impossible’
    The impact of ‘zero-covid’ lockdowns, particularly in Shanghai, has been disastrous for the economy.
    Source: Bloomberg 2) Sino-American political relations
    The investment case for US-listed Chinese technology stocks has been complicated by Chinese anti-monopoly restrictions on so-called platform stocks, in addition to SEC demands for greater financial oversight. With political tensions rising over the Russia-Ukraine war, regulatory risks have become ever more profound.
    Alibaba itself was fined $2.8 billion in an anti-monopoly probe last year, while Didi’s regulatory penalties saw its share price collapse by 90%, or $60 billion, days after its NYSE IPO.
    In March, JP Morgan called Chinese big tech stocks, including Alibaba,‘uninvestable’ for the next six to 12 months, which erased $200 billion from US and Asian markets.
    However, Premier Li Keqiang has now encouraged China’s big tech companies to list on ‘domestic and overseas markets in accordance with laws and regulations,’ a week after Vice Premier Liu He advocated for them to be open to ‘the outside world.’ In addition, China had already paused some big tech regulations to help with the pandemic-related slowdown.
    JP Morgan has now re-upgraded these stocks, with analyst Alex Yao arguing ‘significant uncertainties facing the sector should begin to abate on the back of recent regulatory announcements.’
    But the risk of Chinese government interference at short notice remains high.
    In a case of mistaken identity last month, investors thought that billionaire co-founder and former CEO Jack Ma had been placed under ‘compulsory measures’ on suspicion of ‘colluding with overseas anti-China hostile forces’ to ‘incite secession’ and ‘incite subversion of state power.’
    Alibaba shares plunged by nearly 10%, wiping $26 billion off its market cap, demonstrating the frayed nerves of rattled shareholders.
    3) Growth strategy
    Alibaba now has a price-to-earnings ratio of only 23, less than half that of Amazon. And while its larger competitor could be moving towards a consolidation stage under its new CEO, Alibaba is planning for more growth.
    Negatively, Q1 revenue is expected to be $29.8 billion, a record low increase of just 6% year-over-year according to the Refinitiv average analyst forecast. And YipitData estimates that Alibaba’s flagship Tmall retail site saw sales fall 13% year-over-year in April.
    But the company has increased its share buyback program by $10 billion to $25 billion. It had already bought back 56.2 million shares worth $9.2 billion, based on CFO Toby Xu’s belief that ‘Alibaba's stock price does not fairly reflect the company's value given our robust financial health and expansion plan.’
    Baird analyst Colin Sebastian notes ‘this was a very deliberate sign from the company they believe their stock is inexpensive.’ However, he also thinks while ‘there is some optimism that the operating environment for Internet companies in China may be normalizing… we think management's tone could remain cautious with respect to near-term growth and margins.’
    Reuters reports that Alibaba is now seeking further European growth through its Singaporean Lazada offshoot to offset ‘sluggish demand at home.’ However, it only controlled 4% of Europe’s market share in 2021 and will be competing against multiple entrenched rivals, including Amazon which controls five times as much.
    It will have to invest heavily to have a hope of competing, while simultaneously dealing with weakened growth at home.
    Alibaba reports Q1 results on 26 May.
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  14. MongiIG
    SoftBank, Alibaba's biggest shareholder, owns 5.39 billion ordinary shares, or a 24.8% stake.
    Source: Bloomberg Hebe Chen | Market Analyst, Australia | Publication date: Tuesday 08 February 2022 Despite the strong momentum in the Asian market following the Lunar New Year holiday, the share price of China’s most significant tech icon, Alibaba fell by over 6% this week.
    The slide was primarily attributed to a note revealed by JPMorgan Chase that SoftBank, the largest shareholder and well-known supporter of Alibaba, is expected to sell part of BABA’s shares in the near future. SoftBank owns 5.39 billion ordinary Alibaba shares or a 24.8% stake.
    Softbank invested $20 million in Alibaba back in 2000 when the company was a startup. In fact, SoftBank’s founder and CEO, Masayoshi Son, was one of the earliest investors in and supporter of Alibaba. However, due to the Chinese government’s recent technology clampdown, Son has faced increasing pressure from investors as the value of major portfolio companies, including DiDi Global Inc., was dragged down.
    Last year, Alibaba was down nearly 65% while DiDi dropped over 50% during its five-month US-listed journey. To make matters worse, the long-awaited sale of chip designer Arm Ltd. to Nvidia Corp looks set to fail. Because of this, the sale of beleaguered Alibaba’s shares seems like a very likely move considering SoftBank's current position.
    Technical Analysis
    The potential stake sale by SoftBank, coupled with the expectation of slowing growth, which will soon be verified in the upcoming quarterly report, will continue to weigh on the sentiment toward Alibaba’s shares for the foreseeable future.
    The stock is down 20.37% from the past three weeks and 64.58% from its October 2020 highs. A triangle shape with a clear descending trendline since November can be seen in the daily chart, although the price had attempted to break trough during the January rebound.
    In conjunction with the 20- and 50-day moving averages, the upper trendline will be the critical pressure level for BABA’s price to keep an eye on this week, which is sitting between $123 to $124.
    The bottom side of the right-angle triangle, around $110, acted as the most crucial support for BABA’s price since early December, and is expected to face another test as the RSI shows rising selling pressure.
    Once this support level has been broken through, investors in BABA will need to look further back to April 2017 to find support at around $105.
    Source: ProRealTime Source: ProRealTime
  15. MongiIG
    A quiet US economic calendar overnight saw major US indices heading lower for the second straight session, as sentiments continue to struggle with the recent blowout jobs report.
    Source: Bloomberg   Forex Indices Commodities United States Gold Federal Reserve
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Tuesday 07 February 2023  Market Recap
    A quiet US economic calendar overnight saw major US indices heading lower for the second straight session, as sentiments continue to struggle with the recent blowout jobs report. Sector performance revealed a defensive lean, with underperformance in rate-sensitive tech, Tesla (+2.5%) being the sole outlier. Interest rate expectations thus far have remained well-anchored from last Friday, following the hawkish recalibration for peak rate to be at the 5%-5.25% range. That continues to drive a broad-based increase in US Treasury yields overnight, leading to an in-tandem rise in the US dollar index for the third straight session as well. With the US dollar hovering at the upper resistance of its channel pattern at the 103.20 level, any subsequent break towards the 105.00 level could further leave equities on edge. All eyes will be on Federal Reserve (Fed) Chair Jerome Powell’s comments ahead, with the recent strength in the labour market seemingly opening the door for more hawkishness. That said, sticking to his script at the recent Federal Open Market Committee (FOMC) meeting with not too many surprises could see risk sentiments recover, in line with the upward bias presented from the broader trend.
    The 12,900-13,000 level will serve as near term resistance for the Nasdaq 100 index to overcome, where a Fibonacci confluence zone resides. Recent retest of the 12,900 level was met with some profit-taking, but the broader trend remains upward bias, with the more measured follow-through from recent sell-off and the index trading above its 200-day moving average (MA). Any subsequent move above the 13,000 level could pave the way towards the 13,700 level next.
     
    Source: IG charts  
    Asia Open
    Asian stocks look set for a slight positive open, with Nikkei +0.20%, ASX +0.09% and KOSPI +0.28% at the time of writing. Economic data this morning came in mixed for Japan, which saw a promising 4.8% year-on-year increase in average cash earnings for December, but that was not fed into household spending which contracted more than expected (-1.3% versus -0.2% forecast). The Nikkei 225 index largely reacted with muted moves, potentially with some lingering optimism from yesterday, where hopes for lower-for-longer rates surfaced from speculations of Masayoshi Amamiya’s nomination for the next Bank of Japan (BoJ) governor. Chinese equities continue to see some profit-taking, with the Nasdaq Golden Dragon China Index down 1.8% overnight. Concerns of worsening US-China ties on the balloon shoot-down and previous overbought technical conditions could account for the sell-off. Nevertheless, the constant paring of losses in the Nasdaq Golden Dragon China Index overnight may suggest some attempts to stabilise ahead.
    The key risk event ahead will be the Reserve Bank of Australia (RBA) rate decision. The wide consensus is for a 25 basis-point (bp) hike, effectively bringing the cash rate to 3.35%. Recent pull-ahead in Australia’s inflation has challenged hopes of a rate pause, with expectations still very much split on whether peak rate will eventually be at the 3.6% or 3.85% level. Much focus will be on how the RBA will address the recent inflation surprise to guide rate expectations. For the AUD/USD, it has traded below an upward trendline this week, struggling to push back above the 0.690 level. The trendline will serve as near term resistance to overcome for the pair. On the other hand, further downside moves could leave the 0.673 level on watch, where a Fibonacci confluence zone stands.
     
    Source: IG charts  
    On the watchlist: Gold prices attempt to stabilise after recent sell-off but Fedspeak looms
    Following the recent blockbuster US jobs report, more aggressive rate bets have led gold prices to unwind all of its past month’s gains. While there have been some attempts to stabilise into the new week, an upward trendline resistance serves as a key hurdle to overcome for now. Focus will shift to the upcoming Fedspeak, particularly Fed Chair Jerome Powell’s comments up ahead. With the Fed taking on a data-dependent stance to guide its monetary policies, the risks of a hawkish reaction to the recent economic data remains on the table. Buyers may attempt to overcome the trendline resistance once more, failing which may leave the US$1,800 on watch as potential support.
    Source: IG charts  
    Monday: DJIA -0.10%; S&P 500 -0.61%; Nasdaq -1.00%, DAX -0.84%, FTSE -0.82%
  16. MongiIG
    The relatively quiet economic calendar overnight led to a lacklustre US trading session overall, with some paring of risk positions on lingering growth concerns and the lead-up to the release of US June consumer prices.
    Source: Bloomberg   Forex Indices Commodities Consumer price index United States United States dollar  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 13 July 2022  Market Recap
    The relatively quiet economic calendar overnight led to a lacklustre US trading session overall (DJIA -0.62%; S&P 500 -0.92%; Nasdaq -0.95%), with some paring of risk positions on lingering growth concerns and the lead-up to the release of US June consumer prices. Treasury yields remain lower, while the two-year and 10-year yield curve stays inverted, reflecting a defensive lean in the markets amid pricing for growth risks.
    It seems that markets could go both ways with the US consumer price index (CPI) data release, with potential jitters to be found in the 8.8% headline increase expected, which may mark another 40-year high for prices. Thus far, headline consumer prices since February 2021 have been either matching consensus or coming in higher-than-expected, thus leaving the risks of any upside surprise highly intact. A hot inflation print may cement the case for tighter policy measures from the Fed, potentially posing as headwind for equities if it hits the 9% print. Talks of a 100 basis-point (bp) hike could surface along with that.
    That said, there is a possibility that markets may eventually decide to look beyond the current figure after a knee-jerk reaction and buy into the stance of peaking inflation with falling oil prices and a further tick lower in the core aspect for US inflation. Oil prices have been down more than 20% from its June high, while core CPI is expected to continue lower to 5.7% from the previous 6%. Either way, market volatility will be expected, heading into the key risk event of the week.
    A spinning top for the US dollar index overnight suggests indecision for now, with sentiments on hold for the upcoming US CPI to steer rate hike expectations. Technical conditions are at oversold levels, with relative strength index (RSI) in overbought territory and moving average convergence divergence (MACD) hitting its previous peak in May this year, which was followed through with a retracement at that time. With that, just matching expectations for the upcoming CPI print may not necessarily be sufficient in driving further strength for the US dollar and an outperformance in inflation reading could be heavily looked upon.
     
    Source: IG charts  
    Asia Open
    Asian stocks look set for a muted open, with Nikkei +0.59%, ASX +0.05% and KOSPI +0.11% at the time of writing. Some wait-and-see could be playing out in the Asia session with the lacklustre handover from Wall Street as all eyes remain on several central bank decisions and the US CPI data ahead. With virus concerns in China, the Nasdaq Golden Dragon China Index managed to display some resilience, reversing earlier losses to eke out a 0.2% gain but one may note that the slight gain comes after a 7% plunge on Tuesday. The Asia session will see interest rate decision out of the Bank of Korea (BOK) and the Reserve Bank of New Zealand (RBNZ). This is followed by the Bank of Canada (BoC) later tonight.
    For the RBNZ, a 50 bp hike has been largely priced but forward guidance on economic conditions will be key. Weakening economic growth has surfaced with the latest fall in sale activities in its housing market, along with an earlier contraction for its quarter one (Q1) gross domestic product (GDP) figure. A look at the NZD/USD reveals an ongoing downward trend since February last year, with recent moves forming a new lower low. This marks its lowest level since June 2020. The trend for the pair remains weighed by ongoing US dollar strength, with a break below its key support of the 0.622 level last week bringing a bearish bias overall, which coincides with a key 61.8% Fibonacci retracement. Further retracement could leave the 0.593 level on watch next.
     
    Source: IG charts  
    On the watchlist: Brent crude back below US$100 a barrel
    Attempts to recover for Brent crude prices have been relatively short-lived thus far, as a series of headwinds ranging from global recession concerns, China’s virus situation and a surging US dollar have seemingly put a cap on prices. All these risk factors on demand outlook overrode the current tight conditions in the oil market, leading to a 6% plunge in oil prices overnight despite the Organization of the Petroleum Exporting Countries (OPEC) expecting global oil demand growth to exceed the increase in supplies by 1 million barrels a day next year.
    On the technical front, the lower highs and lower lows kept the near-term downward trend intact. The lower highs on net-long positions among money managers from the Commodity Futures Trading Commission (CFTC) data also suggests some unwinding of bullish bets. The risks in further pricing for growth concerns remain with several economic data release ahead this week and further retracement could leave the US$92.87 level on watch, where a 61.8% Fibonacci retracement level stands in place.
     
    Source: IG charts  
    Tuesday: DJIA -0.62%; S&P 500 -0.92%; Nasdaq -0.95%, DAX +0.57%, FTSE +0.18%
  17. MongiIG
    With the FOMC meeting underway, the release of US economic data overnight has supported market hopes of potentially seeing the Fed easing up on its rate hike path.
    Source: Bloomberg   Forex Indices Federal Reserve Inflation Federal Open Market Committee United States dollar  
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 01 February 2023  Market Recap
    With the Federal Open Market Committee (FOMC) meeting underway, the release of US economic data overnight has supported market hopes of potentially seeing the Federal Reserve (Fed) easing up on its rate hike path. The US quarter four (Q4) employment cost index, which the Fed watches closely for signs of wage inflation, provided a slight downside surprise (1.0% versus 1.1% expected) and added to the list of recent inflation indicators pointing to moderating pricing pressures. Other economic data releases also showed that the US housing market and consumer confidence are reacting to the series of aggressive rate hikes enacted by the Fed thus far, which may be in line with what the central bank wants to see to keep inflation under check. Surge in mortgage rates resulted in a sharp drop in home buyer demand, while US consumer confidence in January fell more than expected (107.1 versus 109 expected). Now, all eyes will be up to the Fed to confirm recent market optimism, which could see central bankers staying firm on keeping inflation down but continue to emphasise on a data-dependent stance in making future rate decisions.
    Initial upmove in the US dollar was met with some paring of gains, but continue to hold above its 101.30 level of support thus far. Greater reaction could be in gold prices, which saw heavy dip-buying to form a bullish pin bar. The improved risk sentiments were also brought on by positive earnings and corporate guidance, such as General Motors, Exxon Mobil, UPS and Spotify just to name a few. With some dip-buying seen last night for the Nasdaq 100 index, the 12,200 level continues to be eyed for a break. The index continues to defend its 200-day moving average (MA) after breaking above it for the first time since January 2022. Any move above the 12,200 level could leave the 13,000 level on watch next.
     
    Source: IG charts
    Asia Open
    Asian stocks look set for a positive open, with Nikkei +0.62%, ASX +0.60% and KOSPI +0.74% at the time of writing. Risk sentiments in the region could tap on the positive handover from Wall Street but upside could still be somewhat contained with a lingering tone of caution ahead of the US FOMC meeting outcome. The Nasdaq Golden Dragon China Index eked out a muted close (-0.14%) overnight while US equity futures this morning are slightly down. Economic data releases this morning displayed an uptick in New Zealand’s unemployment rate to 3.4% from previous 3.3%, but still-resilient reading continues to support a 50 basis-point hike in February before subsequent downshifts. On another note, South Korea’s exports in January provided another sign of a quicker moderation in global economic conditions, contracting far quicker than expected at 16.6% (-11.3% consensus). Nevertheless, losses in reaction to the softer data has been overcome by market optimism for central banks to ease on their rate hikes ahead, with the KOSPI sitting above its 200-day MA for the first time since September 2021.
    The Straits Times Index continues to defend its 3,370 level for now, which marks a key 76.4% Fibonacci retracement level. Staying above this level could set its sight on the 3,490 level next, which seemingly marks a double-top pattern back in early-2022. On a longer-term timeframe, the 3,490 level also points to a peak in 2015 and 2018 on the monthly chart, leaving it as a key resistance to overcome ahead.
     
    Source: IG charts  
    On the watchlist: USD/CAD failed to reclaim upward trendline
    An attempt for the USD/CAD to move back above an upward trendline resistance this week was met with a strong bearish rejection as earlier gains were erased sharply. The downside reaction in the pair followed after the concurrent release of Canada’s GDP reading and further moderation in US employment cost pressures presented in Q4 (1% versus previous 1.3%). Some renewed gain in oil prices likely played a part as well to deliver some downward pressure, along with the improved risk environment overnight. Failure to reclaim the upward trendline could provide a bearish bias for the USD/CAD, which may leave the 1.322 level on watch next. This marks its November low, where a key 38.2% Fibonacci retracement level resides. Resistance remains at the 1.350 level.
     
    Source: IG charts  
    Tuesday: DJIA +1.09%; S&P 500 +1.46%; Nasdaq +1.67%, DAX +0.01%, FTSE -0.17%
  18. MongiIG
    The usual cautious lead-up to the US CPI release has failed to deter risk appetite in Wall Street overnight, as major US indices pushed higher on strength in value sectors.
    Source: Bloomberg   Forex Indices Inflation Consumer price index United States Consumer Price Index /business/market_index
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 12 July 2023  Market Recap
    The usual cautious lead-up to the US consumer price index (CPI) release has failed to deter risk appetite in Wall Street overnight, as major US indices pushed higher on strength in value sectors (energy, industrials, financials). The market confidence could arise as broad expectations are positioned for the upcoming US CPI to reflect further moderation in pricing pressures, with the headline figure expected to decline to 3.1% year-on-year from previous 4%. Likewise, the core aspect is expected to decline to 5.0% year-over-year from 5.3% in May. Month-on-month, both the headline and core inflation prints are expected to increase by 0.3%.
    Another dip in the US core CPI read may reinforce some degree of success in Fed’s tightening moves thus far and leaves room for the Fed to consider a prolonged rate pause for more policy flexibility. Any upside surprise in inflation may put chatters of more rate hikes on the table but given that a 25 basis-point (bp) hike is already heavily priced for the upcoming Fed meeting (88% probability from US Fed funds futures) and the broader trend for inflation is still to the downside, it may potentially have to take a significant beat in inflation numbers to drive a pronounced recalibration in rate pricing.
    The DJIA has largely traded in a wide consolidation pattern since November last year, with a retest of the upper consolidation range marked with the formation of a double-top pattern. Bearish divergences on Relative Strength Index (RSI) and moving average convergence divergence (MACD) seem to point to moderating upward momentum on recent peaks but nevertheless, buyers have managed to defend the double-top neckline overnight at the 33,600 level. Another retest of the upper range may be on watch at the 34,500 level, with any successful upward break potentially leaving the 35,300 level in sight.
     
    Source: IG charts  
    Asia Open
    Asian stocks look set for a mixed open, with Nikkei -0.35%, ASX +0.67% and KOSPI -0.13% at the time of writing. Chinese equities have managed to see some gains yesterday, with the small step from China authorities in extending stimulus support for the property sector providing hopes for more to come over the coming months. The Nasdaq Golden Dragon China Index is up 1.6% overnight after an initial dip. That said, past instances suggest that signs of policy success in lifting economic conditions may still be needed to drive more sustained gains. China’s economic surprise index has turned in a new two-year low recently, with the worst-is-over conditions still on the lookout among investors.
    The economic calendar this morning saw a downside surprise in Japan’s producer prices (4.1% versus 4.3% forecast), with its sixth consecutive month of decline seemingly pointing towards some easing upward pressure on consumer prices. With views of a quicker policy shift by the Bank of Japan (BoJ) on the surge in Japanese workers’ wages lately, today’s wholesale inflation data may slightly dampen some hawkish expectations.
    A brief breakout for the USD/JPY above its ascending channel pattern has failed to find much follow-through, as interaction at the 145.00 level was faced with strong resistance. The level marked a previous area of intervention by Japanese authorities, which prompted some retreat from buyers. The pair is currently back to retest its 139.60 level of support, with any failure for the level to hold potentially paving the way towards the 136.60 level, where the lower channel trendline resides.
     
    Source: IG charts  
    On the watchlist: NZD/USD still stuck below resistance confluence ahead of RBNZ meeting
    Aggressive tightening by the Reserve Bank of New Zealand (RBNZ) thus far has forced its economy into a technical recession, which led market rate expectations to be fully priced for rates to be on hold (5.5%) at the upcoming meeting. This follows after 525 basis-point worth of rate hikes have been delivered to bring its official cash rate to its 14-year high. Nevertheless, the central bank is expected to retain its hawkish stance, given that inflation at 6.7% remains too high for comfort (central bank’s target band is at 1% to 3%). This places a potential hawkish pause scenario on the table, where further rate hikes ahead remain an option if inflation proves to be more persistent.
    On the weekly chart, the NZD/USD has been trading within a descending channel pattern since the start of the year, with a key resistance confluence at the 0.630 level. This is where the upper channel trendline resistance coincides with the upper edge of the weekly Ichimoku cloud, while its weekly RSI still struggles to overcome its 50 level for now. A reclaim of the 0.630 level may be needed to pave the way to retest its year-to-date high at the 0.654 level next. On the downside, the channel support will place the 0.591 level on watch, if the pair resumes its prevailing downward trend.
     
    Source: IG charts Tuesday: DJIA +0.93%; S&P 500 +0.67%; Nasdaq +0.55%, DAX +0.75%, FTSE +0.12%
  19. MongiIG
    US equity indices kickstart the new trading week on a positive footing, but much remain up in the air as all eyes fall on the US CPI release ahead.
    Source: Bloomberg   Forex Indices Commodities United States Consumer price index Stock market index
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Tuesday 14 February 2023  Market Recap
    US equity indices kickstart the new trading week on a positive footing, as a pause in Treasury yields’ ascent ahead of the key US Consumer Price Index (CPI) data aided to drive a broad-based recovery, notably in big tech stocks. The energy sector is the only outlier (-0.60%), being forced into negative territory on lower oil prices, as Biden Administration’s plans to sell 26 million barrels of crude oil from its Strategic Petroleum Reserve gave rise to an increased-supplies outlook. The US dollar remained in its ranging pattern despite a 0.6% decline overnight, largely on some wait-and-see for the US CPI to provide any added boost.
    On the economic calendar, the New York Federal Reserve’s (Fed) survey saw US consumers' one-year inflation expectation staying unchanged at 5% in January, while markets were not given a break from hawkish Fedspeak. Fed Governor Michelle Bowman continued to echo for more rate increases overnight but no specifics on peak rate was given. Much will still depend on the upcoming US CPI data to sway market rate expectations. Matching or below-estimate readings could see risk environment improve further (core inflation expected at 5.5% year-over-year (YoY), headline expected at 6.2% YoY), while any upside surprise will see the US dollar rallying higher and equities lower.
    The S&P 500 continues to trade on a series of higher highs and higher lows since October 2022, providing an overall upward bias on the broader trend. On the upside, the 4,200 level will stand as resistance to overcome, where the index failed to break above at the start of the month. Overcoming this level could leave the 4,310 level in sight, where a key 61.8% Fibonacci retracement level resides. On the downside, the key psychological 4,000 level will be in focus as near-term support.
    Source: IG charts  
    Asia Open
    Asian stocks look set for a positive open, with Nikkei +0.66%, ASX +0.35% and KOSPI +0.50% at the time of writing. Sentiments are largely tracking the positive handover from Wall Street overnight, although much is still up in the air, with the upcoming US CPI likely to drive sentiments for the weeks ahead. The Nasdaq Golden Dragon China Index (+2.6%) got a lift overnight as well. The Hang Seng Index is attempting to stabilise after recent profit-taking activities, currently sitting at a 38.2% Fibonacci retracement level at the 20,900 level. A break below an upward trendline provides a mixed view for short-term moves however, with further retracement likely to leave the 19,200 level on watch for any formation of a higher low.
     
    Source: IG charts  
    Economic data this morning left markets with a disappointing fourth-quarter Gross Domestic Product (GDP) data out of Japan, with the preliminary reading coming in below expectations at 0.2% quarter-on-quarter (0.5% consensus). The data is supportive of a lower-for-longer stance from the Bank of Japan (BoJ) and for any tighter shift in policy moves towards the second half of the year, a more gradual transition will likely be on the table. The Nikkei 225 index has seen some downward pressure on the data release but continues to hang just below its 27,650 level of resistance. Any subsequent push above the level could potentially pave the way to retest the 28,400 level next.
    On the watchlist: Silver prices hanging at key $22.00 support ahead of US CPI data
    Silver prices have been struggling to find upside on some resilience in the US dollar lately, following a break below a previous consolidation pattern back in early February. The moving average convergence/divergence (MACD) has also headed into negative territory for the first time since November 2022, potentially reflecting some reversal in momentum to the downside. With the US CPI up ahead, muted moves to start the week reflect some wait-and-see as prices hang at its key $22.00 level of support. Failure to hold above the $22.00 level over the coming days could pave the way to retest the $20.80 level next, where a key 38.2% Fibonacci retracement level resides.
    Source: IG charts  
    Monday: DJIA +1.11%; S&P 500 +1.14%; Nasdaq +1.48%, DAX +0.58%, FTSE +0.83%
  20. MongiIG
    US inflation data provides another key concern for markets. Will it double down on recent dollar declines or lessen the recent dollar decline
    Source: Bloomberg   Forex Inflation Consumer price index Federal Reserve Core inflation Dollar  Joshua Mahony | Senior Market Analyst, London | Publication date: Monday 13 March 2023  Volatility here to stay as markets await inflation data
    Market sentiment has taken a hit of late, with the furor around the collapse of the Silicon Valley Bank bringing sharp declines for risk assets. This adds yet another concern for traders, with the gains seen throughout equity markets in recent months providing calls for a reversal given economic concerns. Chief amongst those concerns is the recent sticky nature of inflation, with US CPI falling just 0.1% after two consecutive 0.6% declines. Core inflation similarly slowed its decline, easing back from 5.7% to 5.6%. Looking at things from a visual perspective, the recent decline in headline inflation has provided US markets with respite. However, it is clear that we are well above pre-pandemic levels on both headline and core readings.
    It is interesting looking at things from a monthly perspective, with the annualized three-month figure signalling how recent short-term moves project towards an annual reading. From a headline CPI perspective, the past three-months have brought expectations of an annual number of 3.5% if we carried on in this vein. That sounds much better than the 6.3% Year-on-year number we are currently contending with. From this perspective, the ability to post a monthly CPI figure around 0.2% or 0.3% would be a boost given the fact that it keeps that annualized figure within a healthy range. However, markets are forecasting a figure around 0.4%, which would annualize to 4.8%. Looking at the core CPI figure, we can similarly see that recent monthly inflation figures have signalled a potential annual figure around 4.6%, compared with the current yearly reading of 5.5%. Both are significantly above the 2.5% average seen pre-pandemic.
    Source: TradingEconomics The key thing to concern markets is whether we are seeing inflation stall once again or continue the decline seen over the course of the past nine-months. Markets are currently expecting to see headline inflation down from 6.4% to 6.0%, while core eases back from 5.6% to 5.5%. This would further highlight the sticky nature of core inflation, with the Federal Reserve undoubtedly aware of the need to keep tightening in a bid to put pressure on prices. As such, while the main inflation figure will be a headline grabber if it drops to 6.0% as expected, the stubborn nature of core CPI will be important given the signal it will send the Fed if it continues to struggle at these lofty levels.
    Source: Eikon The chart below highlights how any uptick in inflation would go against market expectations of a steady decline back down towards target. Such a move would likely cause the Fed to take a higher for longer approach, to the detriment of risk assets.
    Dollar index head lower
    The dollar has struggled of late, with market expectations shifting away from a 50-basis point hike given concerns around the banking sector. However, it is worth noting the fact that at 38% to 62%, there is still a huge amount of interest rate uncertainty that will be influenced by Tuesday’s inflation data.
    A higher than expected inflation reading could lift the dollar given the potential impact it has on Fed thinking. Meanwhile, the recent dollar decline has taken price through 103.75 support, signalling the potential for further downside. A notable decline in CPI and particularly core CPI could help further drive down the dollar, extending the reversal from 105.37 seen of late.
    Source: ProRealTime
  21. MongiIG
    Following an initial hawkish takeaway, Fed Chair Jerome Powell tried to calm some nerves with a softer tone on his second day of testimony, but Wall Street can afford a mixed closing at best.
    Source: Bloomberg   Forex Indices Commodities Federal Reserve Market trend Bank of Japan  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 09 March 2023  Market Recap
    Following an initial hawkish takeaway, Federal Reserve (Fed) Chair Jerome Powell tried to calm some nerves with a softer tone on his second day of testimony, but Wall Street can afford a mixed closing at best. The Fed Chair put on a less committal and more data-dependent stance, emphasising on multiple occasions that no decision has been made on faster rate hikes yet. That places huge focus on the upcoming job report this Friday and inflation data next week, which may form the last few key data before the Federal Open Market Committee (FOMC) meeting in late-March. Below-expectations read on both fronts may be on the lookout here, with major US indices still attempting to push back against a renewed bearish trend. All three indices continue to hang above their respective 200-day moving averages (MA).
    That said, higher-than-expected ADP private payroll (242,000 versus 200,000 forecast), along with still-elevated job opening numbers (10.8 million versus 10.5 million forecast) did not provide much ease for now. That continued to pave the way higher for US Treasury yields overnight, although rate-sensitive growth stocks managed to close on a stronger footing. The US dollar is largely on some wait-and-see, allowing gold and silver prices to take a breather after recent sell-off. For the DJIA, the index is back to retest the lower base of its consolidation pattern for the second time since the start of the month. Its 200-day MA could be put to the test here, with any break below previous lows on watch to instil a bearish bias. For now, the formation of a bullish pin bar still suggests some defending by dip-buyers.
     
    Source: IG charts  
    Asia Open
    Asian stocks look set for a mixed open, with Nikkei +0.55%, ASX -0.02% and KOSPI +0.22% at the time of writing. The Nikkei continues to display a strong showing ahead of the Bank of Japan (BoJ) meeting this week, where expectations are for the ultra-easy policies to continue. Upcoming BoJ governor Kazuo Ueda has also sung the same tune as current policymakers, with market pricing for a rate hike pushed back to the September meeting (originally April/June). Following the surprise adjustment to its ten-year bond yield cap at the end of last year, it seems that the absence of any surprise may trigger a positive reaction as compared to before.
    For now, the final estimate of its quarter four (Q4) gross domestic product (GDP) was revised lower this morning (0.1% versus 0.8% forecast) on the back of weaker private consumption, which drove some paring of gains in the index. Nevertheless, a break above the 28,400 resistance marked a notable achievement for the bulls. Overbought technical conditions may call for a retest of the level, with any holding up likely to pave the way towards the 29,200 level next. The economic calendar ahead will place China’s inflation figures in focus, which is expected to reflect a more gradual recovery picture with more gradual price increases.
     
    Source: IG charts  
    On the watchlist: AUD/NZD continues to display negative momentum
    After breaking below a rising wedge pattern in late-February, AUD/NZD has retraced close to 3%, failing to defend both its 50-day and 100-day MA. Its Moving Average Convergence/Divergence (MACD) has headed back into negative territory, reflecting some bearish momentum in place. For now, the January 2023 lows are being tested at the 1.074 level. Failure for the line to hold may pave the way towards the 1.064 level, where a previous resistance-turned-support stands in place.
     
    Source: IG charts  
    Wednesday: DJIA -0.18%; S&P 500 +0.14%; Nasdaq +0.40%, DAX +0.46%, FTSE +0.13%
  22. MongiIG
    Alphabet stock fell 20% from its November highs, but as earnings near, the stock’s prominent position in the search engine market should continue to see it perform well.
    Source: Bloomberg   Shares Alphabet Inc. Market trend Stock Price Technical analysis  Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 27 January 2022  When does Alphabet report earnings?
    Alphabet reports earnings on 1 February, covering its fiscal fourth quarter (Q4).
    Alphabet earnings – what to expect?
    Alphabet is expected to report revenue of $72 billion, up from $65 billion in the third quarter (Q3). Earnings per share are expected to fall to $27.40 from $27.99 in the previous quarter.
    Revenues continue to be driven by growth in its search engine division, helped by growth in its mobile search element. Improvements in local services ads and upgraded Google Assistant and Google Maps services are also likely to push revenue higher. Looking at the broader picture, the continuing growth of the global economy in its rebound from the Covid-19 pandemic should keep fuelling earnings growth, as businesses spend more on ads and consumers search more as they return to more of their pre-pandemic activities.
    Alphabet earnings – broker ratings and forecasts
    Fourteen analysts cover Alphabet, with 5 ‘strong buys’ and 8 ‘buys’. The current median target price is $3400, a premium of 29% to the current price (as of 26 January).
    Alphabet stock price – technical analysis
    Alphabet’s stock has fallen below the 200-day simple moving average (SMA) for the first time since April 2020. This remarkable run has seen the shares more than double, even with the 20% drop from peak to trough witnessed since November. A bounce from possible trendline support from the September 2020 low now suggests a fresh test of the 200-day SMA, and then on towards $2850 and trendline resistance from the November high.
    A move above this would provide a more bullish view, but a rally above $3000 is needed to break the recent run of lower highs, notably the rallies since November have been accompanied by weaker stochastics, a sign of falling bullish momentum.
    A failure to move back above $2860 would mark a fresh bearish development, although a full-blown reversal would need to see the price below $2650 and then fall through the post-September 2020 trendline.
    Source: ProRealTime Don’t give up on Alphabet
    Tech stocks have taken a beating of late, falling sharply from record highs. But as Microsoft earnings have reminded investors, and as Alphabet should when it reports, these big stocks continue to control a powerful position in the US economy and are big cash generators. This is why they command a higher growth valuation than some, but a company at 22 times earnings with $42 billion in free cash flow is still a compelling prospect for many investors.
  23. MongiIG
    Alphabet, Google's parent company, is ready to reveal its Q2 2023 earnings July 25th, after the US market closes. Investors are keeping their eyes laser-focused on these three crucial areas.
    Source: Bloomberg   Shares Alphabet Inc. Google Advertising revenue Artificial intelligence Advertising
    Hebe Chen | Market Analyst, Melbourne | Publication date: Monday 24 July 2023  Alphabet Q2 Earnings - When is the Earning Date?
    Alphabet is scheduled to report its 'second quarter (Q2) 2023 earnings on Tuesday, July 25, after the US market closes.
    Alphabet Q2 Earnings - What to Expect?
    Revenue: Alphabet’s revenue for the quarter covering March to June 2023 is expected to reach $72.67 billion, 4% higher than the level in the same period last year.
    EPS: The internet search leader is expected to deliver quarterly earnings of $1.34 per share, presenting a 3.8% year-over-year (YoY) growth and 25% higher than the previous quarter.
    Alphabet Q2 Earnings - Three Key Areas to Watch
    Advertising Revenue
    Despite beating the market's expectations in the previous quarter, advertising income, which is the major source of revenue for Alphabet, dropped for the second straight quarter.
    YouTube advertising revenues were down 3%, while network advertising revenues were down 8%, reflecting the ongoing headwind in the online advertising space. For the quarter to be reported, whether or not Alphabet could reverse the downtrend would be the first key area to closely watch.
    Source: Alphabet Google Cloud
    The cloud service is one of the fastest-growing areas that all tech giants can't afford to miss. According to Precedence Research, the global cloud service market is projected to grow 20% annually through 2030 and reach US$1630 Billion.
    Source: Precedence Research* In this space, Amazon, the first mover in the industry, currently secures an estimated 32% of the global market share. However, Google Cloud is rapidly catching up as the fastest-growing player. Google’s cloud business has finally turned profitable in the previous quarter, reaching an operating income of $191 million and an operating margin of 2.6%.
    Source: Statista However, the path ahead won’t be any easier for Google as its market share remains lagging behind Amazon and Microsoft by a fair distance. Moreover, the growth rate for Alphabet’s cloud business has notably slowed down, decreasing from 40% in 2022 to less than 30% in Q1 2023. As such, whether or not Google Cloud could sustain its hard-earned profitability and continue narrowing the market share gap with the other two strong competitors will be another must-watch.
    Google DeepMind
    Google DeepMind, combining the Brain Team from Google Research with DeepMind, will be listed as an individual sector for the first time in the Q2 report, highlighting Alphabet's ambition to accelerate its artificial intelligence (AI) innovation and impact. While the move is not likely to materially impact the final earnings for the to-be-reported quarter, the new structure should help investors get a glimpse of the company’s development and cost efficiency on the new technology front.
    Additionally, since Microsoft's ChatGPT exploded onto the scene early this year, the global tech industry has been swept up in an AI battlefield as a platform-changing era seemingly unfolds. As for Alphabet, its longstanding dominance in the search engine realm is facing a new challenge.
    With the addition of powerful AI features, Microsoft's Bing is making a comeback. Although Alphabet rushed to present its own AI version of a search engine called 'Bart,' it seems to be lacking the same level of excitement so far. As such, investors will be keen to find out any progress in the AI territory that Alphabet is going to present to defend its crown as the search engine king.
    Alphabet Q2 Earnings - Technical Analysis
    From a technical point of view, Alphabet's more than 30% rally since February 2023 is now approaching a critical juncture.
    On the weekly chart, the price is currently supported by the 100-week average. However, it's worth noting that a further decline from this level could effectively breach the 4-month-long trend line, potentially transforming the uptrend line into a new resistance hurdle.
     
    Turning to the daily chart, the next upside target appears to be the August 2022 peak at $122.2, however, the 50-day moving average (MA) will likely present a key challenge in achieving that goal. Immediate support can be found around $119.59, where the mid-term trendline intersects with the peak from June to July 2022. Also notably, the recent pullback in the past week is on the way to form a double-head shape, indicating that a breach of the shoulder line (at $116.20) may trigger a further downtrend.
    * https://www.globenewswire.com/en/news-release/2022/06/10/2460529/0/en/Cloud-Services-Market-Size-to-Surpass-US-1630-Billion-By-2030.html
  24. MongiIG
    Get the latest insights on Alphabet's anticipated Q4 2024 financial results, highlighting potential double-digit growth in Google cloud and services, the impact of generative AI on products.
    Source: Bloomberg   Shares Alphabet Inc. Artificial intelligence Google Cloud computing Revenue  
     Written by: Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 24 January 2024 04:00 When does Alphabet report its earnings?
    Alphabet Inc is set to release its fourth quarter (Q4) financial results on Wednesday, 31 January at 5am (GMT+8), after the market closes.
    Financial expectations
    For Alphabet’s upcoming results, expectations are for a broad recovery on all fronts. Double-digit growth in both its key segments (Google cloud and Google services) are expected to power a 12.1% year-on-year (YoY) growth in overall revenue to US$85.3 billion.
    Likewise, its 4Q 2023 earnings per share (EPS) is expected to improve to US$1.59 from previous quarter’s US$1.55, which will extend its streak of positive YoY EPS growth to the third straight quarter.
    Source: Refinitiv Rebound in advertising activities to continue in 4Q 2023
    Advertisement revenue accounts for 78% of Alphabet's top line. Having reverted to positive YoY growth over the past two quarters, the recovery momentum for this segment is expected to continue with a stronger 11.6% growth in Q4 2023, up from 9.5% in Q3 2023.
    Increasing views of a US soft landing and further clarity on the peak in the Federal Reserve (Fed)'s hiking cycle in Q4 2023 may see business confidence return, potentially accelerating ad spending. Back in Q3 2023, Alphabet's management noted some 'stabilisation' in advertising spend, setting the tone for better times ahead.
    Source: Refinitiv  
    Ongoing race to unlock synergies of generative AI on product offerings
    With the ongoing traction towards generative artificial intelligence (AI), Alphabet has previously incorporated AI-powered solutions like Search and Performance Max to help customers increase their ads' return on investment (ROI). This may allow Alphabet to maintain its edge over the broader advertising industry.
    Further integration of Bard with Google apps and services is also in the pipeline. However, it's a race against time against Microsoft, who has been a first mover with its ChatGPT. Microsoft's CoPilot feature, integrating AI into its office applications, poses a threat to Alphabet's cloud-based products, including Google Sheets and Google Docs. Meanwhile, further developments of Microsoft's search engine Bing could continue to vie for Google’s market share.
    The race to unlock synergies of generative AI in product offerings remains tight, with any progress of new features closely monitored at the upcoming earnings call.
    Cloud business performance will remain high on market participants’ radar
    In the Q3 2023 results, Alphabet topped both revenue and EPS estimates, but its share price plunged as much as 10% in a single day due to a miss in its cloud revenue. This highlights the importance market participants place on this segment as Alphabet's key growth driver, amid the rising trend of generative AI, which should translate to growing demand for public cloud services.
    Any lack of growth momentum could mean losing market share to Amazon Web Services (AWS) and Microsoft Azure, the other frontrunners in the highly competitive cloud computing space. A significant miss in this segment could singlehandedly drag the stock price down, given the heavy investments in its cloud unit and the high expectations for its growth.
    Source: Refinitiv  
    Can YouTube continue to hold up against its competitors (eg., TikTok)?
    YouTube Shorts, Alphabet's short-form video feature as a response to competitor TikTok, has been performing well. In the Q3 2023 results, it reported 70 billion daily views, a significant increase from the 50 billion daily views at the beginning of 2023.
    Focus will be on whether the solid momentum in both YouTube's ads and subscription businesses from Q3 2023 can be mirrored in the upcoming results.
     
     
    Technical analysis: Alphabet’s share price eyeing for a retest of its all-time high
    Alphabet’s share price has been trading on a series of higher highs and higher lows since the start of 2023, fitting into a broad ascending channel pattern. Trading above its Ichimoku cloud on the daily chart, along with various moving averages (MAs) (100-day, 200-day), validates the overall upward trend.
    On the weekly chart, its weekly relative strength index (RSI) has been trading above its key 50 level since March 2023, briefly retesting the key level in October 2023, which saw some defending from buyers. Buyers may aim for a potential retest of its all-time high at the US$152.00 level, with current prices standing just 3% away from the target.
    On the downside, immediate support to defend may be at the US$142.50 level. A stronger area of support confluence may be found at the US$132.40 level, where the lower channel trendline coincides with the lower edge of its Ichimoku cloud on the daily chart.
    Alphabet daily chart
    Source: IG charts
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  25. MongiIG
    Alphabet’s share price is down more than 10% year-to-date and sentiments have been largely mixed. Can its upcoming Q1 earnings provide a lift for its share price ahead?
    Source: Bloomberg   Shares Alphabet Inc. Price Advertising Revenue Interest rate  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 20 April 2022  When does Alphabet report earnings?
    Alphabet Inc is set to release its quarter one (Q1) financial results on 26 April 2022, after market closes.
    Alphabet’s earnings – what to expect
    Current expectations are for Alphabet’s upcoming Q1 revenue to come in at $68.1 billion, up 23.1% year-on-year. In addition, earnings before interest, taxes, depreciation and amortization (EDITDA) for Q1 are expected to come in at $27.6 billion, up 20.3% from a year ago.
    Currently, the stock has 12 ‘buy’ recommendations, with no ‘holds’ and ‘sells’. The Bloomberg 12-month consensus target price of $3,420 suggests a potential upside of 31.0%, from the price of $2,610.62 at the time of writing.
    Alphabet mostly insulated from Apple’s privacy changes and Russia’s exposure
    As economic normalisation continues to take place, Alphabet’s revenue growth has tapered from the Covid-19-led bounce but remained at a strong 35.6% year-on-year (YoY) increase in quarter four (Q4) 2021. Thus far, while Apple’s privacy changes may have an impact on its YouTube ad business, the outperformance in the other segments has shown to underpin the overall advertising business as of the previous quarter. Advertising spending may remain supported with the current strength of the US economy, but the outlook will be more closely watched. Further rotation in advertising spending from traditional media such as television, newspaper and radio to internet also remains a key catalyst to drive longer-term gains in the advertising market.
    In terms of Alphabet’s exposure to Russia, it was estimated to account for less than 0.5% of its revenue. Therefore, any direct impact for its business in Russia may seem limited.
     
    Source: Alphabet Inc  
    Google Cloud as growth catalyst but need to further deliver ahead
    The crown jewel for Alphabet’s longer-term growth may lie in its Google Cloud segment. While it is still making losses as of its previous quarter (-$890 million), losses have been pared by 28.4% from a year ago. The latest revenue growth of 44.6% year-on-year (YoY) for the segment may seem attractive at first glance but on relative terms, it does not differ that much from its competitors such as Amazon’s AWS and Microsoft’s Azure. Considering that AWS and Azure takes up around 33% and 21% of market share in the cloud infrastructure service market respectively, while Google Cloud takes up around 10%, we should be expecting a much higher growth rate for Google Cloud. That does not seem to be playing out at the moment.
    Further ‘aggressive’ investments into the cloud space has been highlighted by the management and the 70% increase in backlogs in Q4 2021 does provide testament to the segment’s potential. That said, the growth figure for this segment will continue to be on watch, with the need to further deliver ahead in order to drive market share gains.
     
    Source: Alphabet Inc, Amazon.com Inc, Microsoft Corporation  
    Interest rate upcycle poses risks to valuation multiple, with strong earnings on watch to deliver a mitigating impact
    The glaring theme for financial markets is undoubtedly the impending increase of interest rates ahead, as curbing inflationary pressures take precedence in central banks’ monetary or/and fiscal policies. The general belief is that rate increases could translate into a larger discounting factor for companies’ future earnings or cashflows and therefore, market participants may demand higher growth figures in order to mitigate the effect of rising rates. This may have a larger impact on growth sectors, making these companies more rate-sensitive.
    While the inverse relationship between 10-year Treasury yields and Alphabet’s share price has not been clear historically, Alphabet’s earnings growth and cashflow will nevertheless be closely looked upon. Thus far, its earnings growth has been resilient to inflationary pressures and economic normalisation, with a 35.6% YoY increase in Q4 2021. Its free cash flow has also been consistently on the rise, suggesting that they may be less dependent on debt for financing and can rely on their pool of retained earnings. These figures will continue to be on watch to justify their valuation ahead, where economic momentum will clearly lean towards a downward bias.
     
    Source: Alphabet Inc Stock split in July
    Alphabet has enacted a 20-for-1 stock split in February, which will take effect on 15 July and trading will begin on a split-adjusted basis on 18 July. Generally, a stock split does not alter the business fundamentals but the move to lower the share price may make shares more accessible to smaller investors. That may also increase its chance of being added into the price-weighted Dow Jones Industrial Average, which has previously been made impossible due to its high share price.
    Alphabet’s shares – technical analysis
    From its technicals, Alphabet’s share price has been largely trading within a consolidation pattern over the past months. Recent moves have brought its share price near the lower bound of the range, where the key support level of $2500 will be on watch. That level has supported the shares on at least three previous occasions but multiple retests of support within a relatively short time span may put it at risk of a downward break. Some signs of weakness remain intact with the bearish crossover between the 100-day and 200-day moving average (MA), along with bearish momentum on the moving average convergence divergence (MACD). Therefore, much clearly hangs on the upcoming results to lift sentiments.
     
    Source: IG charts

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