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The DAX has already surged to fresh cycle highs, driven by the ECB's dovish messaging and data dependence. Now, all eyes are on the FTSE as the Bank of England meets to discuss interest rates. Source: Bloomberg Forex Indices FTSE 100 Inflation DAX Euro Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 01 August 2023 In our European Indices update a fortnight ago, we pondered whether the DAX and the FTSE might follow the lead of US equity markets and make fresh cycle highs. The DAX has answered part of the question as it surged to fresh cycle highs at the end of last week. The rally followed more dovish messaging from the ECB at its interest rate meeting and a move to full data dependence for future meetings. Euro Area core and FTSE under the spotlight Exactly how last night's upside surprise in Euro Area core inflation (unchanged at 5.5% vs 5.4% expected) and the 15.77% rally in the price of crude oil during July fits into the ECB's more sanguine view of the world remains to be seen. This week it's the FTSE's turn in the spotlight as the Bank of England meets on Thursday night to discuss interest rates, previewed below. BoE interest rate meeting preview Release date: Thursday, August 3 at 9 pm AEST At its meeting in June, the BoE raised the bank rate by 50bps to 4.50% for its thirteenth consecutive rate increase. The decision to raise rates by a larger-than-expected 50bp was in response to another upside surprise in inflation as headline inflation in May rose by 8.7%, above consensus expectations of 8.4%. Inflation numbers for June (released two weeks ago) finally provided a downside surprise of 7.9% YoY vs 8.2% expected. However, the labour market remains tight, and last month's wages, excluding bonuses, were 7.3% higher than a year earlier, the largest increase outside of the Covid Pandemic and above forecast for 7.1%. A 25bp rate hike to 5.25% is fully priced for Thursday night, and there is a non-insignificant chance (30%) of a larger 50bp rate hike priced. The rates market sees the BoE's terminal rate reaching 5.75% before year-end. Official bank rate chart Source: TradingEconomics DAX technical analysis In recent updates, we noted that the decline in the DAX from the mid-June 16,572 high to the 15,559 low unfolded in three waves, indicative of the pullback being a correction rather than a reversal lower. This view was confirmed as the DAX last week cleared interim resistance last week at 16,350/375 to test and break above the mid-June 16,572 high. From here, the DAX is likely to be well supported on dips towards support at 16,300/250 from buyers looking for a push towards 16,800/900 in sessions ahead. Aware that only a sustained break of uptrend support at 15,750 and then recent lows at 15,650/550 would negate the positive backdrop. DAX daily chart Source: TradingView FTSE technical analysis After holding support near 7200 in early July, the FTSE has since rebounded to be eyeing downtrend resistance at 7770, coming from the 8047 high in February. The FTSE needs a sustained break above 7770/7810 to indicate that a more robust recovery towards the year-to-date 8047 high is underway. Otherwise, a return to 7200 is possible, particularly if the Bank of England opts for a larger-than-expected 50bp rate hike this week. FTSE daily chart Source: TradingView TradingView: the figures stated are as of August 01, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

Australia holds interest rates at 4.1%: potential future increases The Reserve Bank of Australia has decided to keep its interest rates at 4.1% for the second month in a row. Meanwhile, HSBC is rewarding its investors by buying back up to $2 billion of its own shares. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Tuesday 01 August 2023 Australian interest rate On August 1st, 2023, it was mentioned that Australia has decided to keep its interest rates at 4.1%. This indicates that there might be a need for further increases in the future. HSBC, a major bank, has raised its outlook because its profits have exceeded expectations, which is good news for investors. European equities There is also going to be a big wave of European companies reporting their earnings, including IMDb, Greggs, Diageo, and Pfizer. However, the European market is expected to open slightly lower. Stock market index The FTSE, a stock market index, is showing a positive long-term perspective and has the potential to climb up towards the 7800 level. The CAC and DAX, which are also stock market indexes, are slowly making progress as well. CSI 300 and Hang Seng indexes In Asia, China's CSI 300 and Hang Seng indexes have been doing well this month, experiencing their biggest monthly gains since January. However, the Nikkei index in Japan has remained unchanged. Wall Street, the stock exchange, had a strong performance in July thanks to positive company earnings and optimism about the US economy. At the beginning of the day, cautious trading is expected. The Reserve Bank of Australia The Reserve Bank of Australia has decided to keep its interest rates at 4.1% for the second month in a row. Meanwhile, HSBC is rewarding its investors by buying back up to $2 billion of its own shares. The bank's profits for the first half of the year have more than doubled, and it has increased its near-term return on tangible equity goal. China's factory activities China's factory activities saw a decline in July due to lower demand from suppliers and fewer export orders caused by market conditions both abroad and domestically. UK house prices In the UK, house prices fell by 3.8% in July compared to the previous year, which is the biggest drop since July 2009. This has affected house builders like Persimmon and Taylor Wimpey, who are also facing challenges. Oil prices Oil prices have reached their highest level since April 17th, with the expectation that organization of the petroleum exporting countries (OPEC) will extend voluntary cuts for an additional month. The demand for oil in July reached a record high of 102.8 million barrels. However, BP, a major oil company, reported lower-than-expected profits for the second quarter of the year, as oil and fuel prices have cooled down. Greggs On a positive note, British bakery and fast food chain Greggs reported a 14% increase in profit for the first half of the year and remains on track to meet its annual forecast. Diageo, a company that makes spirits, also had good results, with a 6.5% rise in sales in the year to June 30th, slightly surpassing analysts' expectations. As for gold, its price has been slowly rising and is currently attempting to break through the resistance level of $1980. Gold outlook Central banks have been buying gold, which has supported its demand. However, overall demand for gold has slightly decreased in the second quarter of 2023. This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

Investors maintained their optimistic outlook on the global economy, as Asian stocks reached a 16-month high. European consumer inflation showed signs of peaking, aligning with the narrative in the U.S., where optimism for a smooth economic landing persists. However, there are still potential risks on the horizon. The United States has several important jobs reports scheduled for the week, including the monthly payrolls report on Friday. Additionally, the Bank of England's decision on Thursday could impact the prevailing narrative of rising interest rates among major central banks. Meanwhile, Australia's central bank decided to keep interest rates at 4.1% for a second month, citing the effectiveness of previous rate increases in curbing demand but warning that further tightening may be necessary to combat inflation. In China, optimism regarding Beijing's efforts to support the economy and achieve its 5% growth goal has waned, resulting in Chinese markets underperforming in the region due to profit-taking following Monday's rally.

Charting the Markets: 31 July FTSE 100, DAX and Dow look for further gains. EUR/USD and GBP/USD tiptoe higher while USD/JPY bounce continues. EUR/USD and GBP/USD tiptoe higher while USD/JPY bounce continues. Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 31 July 2023 And gold, oil and copper prices aiming for fresh gains This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

As the Reserve Bank of Australia (RBA) prepares for its August meeting, financial markets keenly await the decision on the official cash rate. Will the RBA hold steady or surprise with a rate hike? Source: Bloomberg Forex Cash Inflation AUD/USD Reserve Bank of Australia United States dollar Tony Sycamore | Market Analyst, Australia | Publication date: Monday 31 July 2023 The Reserve Bank Board of Australia is scheduled to meet tomorrow, the 1st of August, at 2.30 pm in what is expected to be yet another line ball decision. The backdrop At its Board Meeting in July, the Reserve Bank of Australia kept its official cash rate on hold at 4.10%. The RBA's decision to keep rates on hold was largely expected by the rates market (80% priced). In contrast, about two-thirds of the forecasting community predicted a rate hike. The RBA's reasons for staying on hold echoed partly why it paused its rate hiking cycle in April - to assess the impact of a cumulative 400bp of rate hikes over the past fourteen months. "The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the economic outlook and associated risks." RBA cash rate chart Source: RBA RBA meeting focuses on incoming data The RBA meeting minutes for the July Board meeting put the focus firmly on incoming data ahead of the RBA's August Board meeting. "At the August meeting, the Board would have the benefit of additional data on inflation, the global economy, the labour market, and household spending, as well as an updated set of staff forecasts and a revised assessment of the risks." Following downside surprises last week in inflation (6.0% YoY vs 6.2% expected) and retail sales (-0.8% vs 0.0% expected), we think it will be enough to see the RBA keep its cash rate on hold tomorrow at 4.10%. The RBA will likely retain a tightening bias due to elevated services inflation and a tight labour market - factors that will likely see one more hike before year-end to 4.35%, in line with current pricing in the interest rate market (see chart below). ASX 30-day interbank cash rate futures implied yield curve Source: ASX AUD/USD technical analysis The AUD/USD closed lower last week at .6648 (-1.11%) following softer-than-expected Australian inflation and retail sales data, which saw it break below the 200-day moving average currently at .6728 and accelerate lower towards .66c. While the AUD/USD remains below the 200-day moving average, we hold a mild negative bias and expect it to probe support in the .6575/55 area. While it's not our base case, (given how well-supported this area has been in the past), a sustained break below .6575/55 would then expose a move towards .6400c. Aware that if the AUD/USD were to reclaim the 200-day moving average at .6728 post the RBA meeting, it would alleviate downside risks and see another rotation higher towards .6820. AUD/USD daily chart Source: TradingView TradingView: the figures stated are as of July 31, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

Unpacking July 2023's US stock market rally, the role of growth data, earnings, inflation, and the outlook for the coming months. Source: Bloomberg Indices S&P 500 Inflation Stock market Nasdaq Stock market index Tony Sycamore | Market Analyst, Australia | Publication date: Monday 31 July 2023 July's US stock market performance Last week proved to be a significant test for US stock indices, with crucial developments from the Federal Reserve (Fed) and the European Central Bank (ECB), a surprising tweak to the Bank of Japan's (BoJ) YCC (yield curve control), and earnings reports from approximately 50% of S&P 500 companies by market capitalization. As the month comes to a close, the Nasdaq has achieved a solid 3.77% gain, the Dow Jones is up by 3.06%, and the S&P 500 has risen by 2.96%. Factors driving the July rally The positive momentum witnessed in July can be attributed to several factors. The US stock market saw a boost from stronger-than-expected growth data, better-than-expected corporate earnings, and a decline in inflation rates. The trend of decreasing inflation was further reinforced on Friday, as the Core PCE Price Index eased to 4.1% in June, compared to the expected 4.2%, leading to speculations of a "Goldilocks" scenario. Crude oil price surge and inflation concerns Despite the Goldilocks narrative, this month has also witnessed a significant surge in crude oil prices, rising by 14.2% to surpass $80 per barrel. With petrol costs already on the rise, there are concerns about the potential return of inflation fears and how long the current Goldilocks state can be sustained. Key data releases and Q2 2023 earnings Looking ahead, the US stock market is set for another crucial week, with the release of ISM (Institute for Supply Management) and Non-Farm Payrolls data, along with the continuation of Q2 2023 earnings reports from prominent companies like Caterpillar, Pfizer, AMD, and Amazon. Investors will closely monitor these developments for further insights into the market's direction. ISM manufacturing survey expectations Release date: Wednesday, August 2, 12:00 am AEST The ISM manufacturing survey is expected to rise by 0.9 points to 46.9 in July. Despite the anticipated improvement, it would mark the ninth consecutive month the index has spent in contractionary territory (below 50). Subindices to watch Within the subindices, a modest increase in Prices Paid is expected to reach 43, up from 41.8 previously. The market will be closely monitoring New Orders for any signs of growth, hoping it can build on last month's gain, which rose to 45.6 from 42.6 prior. ISM manufacturing PMI chart Source: TradingEconomics S&P 500 technical analysis Technically we moved to a neutral stance in the S&P 500 after the post-CPI rally tagged our 4600/4630 target/resistance zone. We remain uninterested in chasing the rally at these elevated levels and note that a break of support at 4555/50 would indicate that a pullback towards 4500, with scope to 4400, is underway. Aware that if the S&P 500 does break above the recent 4634 high before completing a pullback, there isn't much in the way of resistance until 4740 before the January 2022 high at 4808. S&P 500 daily chart Source: TradingView Nasdaq technical analysis In line with our view of the S&P 500, we aren't overly keen to chase the recent rally in the Nasdaq near cycle highs. Nor are we eager to fight the momentum. This leaves us neutral at current levels with a bias to buy a corrective pullback should it occur. A sustained break of support at 15,475 would be the first indication that a pullback is underway towards support coming in between 15,200 and 14,850. Aware that if the Nasdaq were to break above the recent 15,857 high before completing a pullback, there isn't much in the way of resistance until 16,500. Nasdaq daily chart Source: TradingView Dow Jones technical analysis After its run of thirteen consecutive higher closes ended a prolonged period of sideways range trading, the Dow Jones is within eyesight of its all-time 36,952 high. Dips are likely to find support back towards 34,500/250 (former highs), with a break above last week's 35,645 high an indication that the uptrend has resumed. Dow Jones daily chart Source: TradingView TradingView: the figures stated are as of July 31, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

FTSE 100, DAX and Dow look for further gains Indices enjoyed a strong few days last week, with both the Dax and Dow reaching new highs for the year, while the FTSE 100 closed in on 7700 once more. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 31 July 2023 FTSE 100 targets 7700 again Gains stalled last week below 7700, after an impressive run higher for the index. Bulls will want to see a daily close above 7700 in order to open the way to more upside in the direction of 7800 and then 7930. A recovery of these two levels helps to revive a bullish view after the losses of May and June. So far losses have been contained around 7630 so a close below this level might help to reinforce a short-term bearish view. Source:ProRealTime DAX at new 2023 high The index succeeded in hitting a new record closing high, after months of consolidation. This now puts the buyers back in charge, so long as the price holds above 16,000. After recovering from the lows of June a more bullish view prevails. A close back below 16,100 would suggest the consolidation would continue. It would need a move back below 15,700 to suggest that a near-term bearish view prevails. Source:ProRealTime Dow holds close to 2023 high Last week saw the index reach a new high for the year, both intraday and on a closing basis. After bottoming out in March, the index has succeeded in creating higher lows in May and July. The last three weeks has seen the index rally by over 1500 points, bouncing off the 50-day SMA. The next levels to watch become the February 2022 high at 35,860, and then on to 36,465 and then the record high at 36,954. A pullback could target the 50-day SMA if the 50-day SMA is lost. Source:ProRealTime

Gold, oil and copper prices aiming for fresh gains Gold is aiming to continue its recovery from Friday, while oil and copper prices are in strong form. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 31 July 2023 Gold hopes to continue Friday’s recovery Thursday’s losses stalled at the 50-dy SMA, and the on Friday the price rallied off this level, recovering $1950. A continued move higher now targets the $1980 level which held back progress in May and during July. A close above this then opens the way towards $2000 and higher. Sellers will want to see a close below the 50-day SMA that can then open the way to the June/July lows around $1900. Source: ProRealTime WTI at new highs Friday saw the price close above $80 for the first time since mid-April. The commodity has enjoyed impressive gains since the lows of June, with only some brief weakness mid-month. Since clearing the 200-day SMA the price has enjoyed further gains, underpinned by trendline support from the June low. Fresh upside targets $81, last tested in March and April, and then beyond this the April high at $83.40. A drop below trendline support and then back below the 200-day SMA might help to neutralise the bullish view in the short-term. Source: ProRealTime Copper looks for more gains After a huge recovery on Friday the price appears on the cusp of a breakout. It is now testing trendline resistance from the 23 January high, and beyond this lies trendline resistance from the 2023 high. A daily close above $87 helps to bolster the bullish view. Trendline support from the May low may help in the event of a reversal, but a close below $84 would suggest a break to the downside that could revive the bearish view. Source: ProRealTime

China's economic woes: implications for global markets Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 31 July 2023 China's manufacturing and services sectors are struggling, which means the Chinese government may need to provide more economic support. This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

The Week Ahead Read about upcoming market-moving events and plan your trading week Week commencing 31 July Chris Beauchamp's insight A busy week of jobs data and earnings reports lies ahead. US payrolls end the week on Friday, while China purchasing managers index (PMI) and the US ISM PMIs are also key events along with eurozone gross domestic product (GDP). Earnings come from across the S&P 500, including Pfizer, Uber, Apple, Amazon and ConocoPhillips. The two tech giants are likely to be the most closely-watched this week. Economic reports Weekly view Monday 2.30am – China PMIs (July): manufacturing PMI to fall to 48 from 49, and non-manufacturing to fall to 52.9 from 53.2. Markets to watch: China indices, CNH crosses 10am – eurozone GDP (Q2, flash), CPI (July, flash): GDP to grow 0.3% QoQ from 0%, and 0.6% from 1.1% YoY. CPI to be 5.2% from 5.5% YoY, and fall 0.2% from a 0.3% rise MoM. Markets to watch: eurozone indices, EUR crosses 2.45pm – US Chicago PMI (July): index to rise to 43 from 41.5. Markets to watch: USD crosses Tuesday 2.45am – China Caixin manufacturing PMI (July): index to fall to 49 from 50.5. Markets to watch: China indices, CNH crosses 5.30am – Reserve Bank of Australia rate decision: rates expected to rise 25 basis points, from 4.1% to 4.35%. Markets to watch: AUD crosses 8.55am – Germany unemployment (July): unemployment rate to hold at 5.7%. Markets to watch: EUR crosses 3pm – US ISM manufacturing PMI (July): index to rise to 48 from 46. Markets to watch: USD crosses Wednesday 1.15pm – US ADP employment report (July): private payroll survey to show an increase of 210,000 jobs, compared to 497,000 in June. Markets to watch: US indices, USD crosses 3.30pm – US EIA crude oil inventories (w/e 28 July): previous week saw stockpiles fall by 600,000 barrels. Markets to watch: Brent, WTI Thursday 2.45am – China Caixin services PMI (July): index to fall to 52 from 53.9. Markets to watch: China indices, CNH crosses 12pm – Bank of England rate decision: rates expected to rise 25bps as the Bank seeks to bring inflation under control. Now that UK CPI has slowed, we may see some caution about future hikes. Markets to watch: FTSE 100/250, GBP crosses 1.30pm – US initial jobless claims (w/e 29 July): claims to rise to 225K. Markets to watch: US indices, USD crosses 3pm – US ISM services PMI (July): index to fall to 52 from 53.9. Markets to watch: US indices, USD crosses Friday 1.30pm – US non-farm payrolls (July): payrolls to rise 190K from 209K last month, and unemployment rate to hold at 3.6%. Average hourly earnings to rise 0.3% from 0.4% MoM, and 4.3% from 4.4% YoY. Markets to watch: US indices, USD crosses 1.30pm – Canada employment report (July): unemployment rate to rise to 5.5% from 5.4%. Markets to watch: CAD crosses 3pm – Canada Ivey PMI (July): expected to fall to 49.7 from 50.2. Markets to watch: CAD crosses Company announcements Monday 31 July Tuesday 1 August Wednesday 2 August Thursday 3 August Friday 4 August Full-year earnings Diageo Half/ Quarterly earnings Pearson BP, Greggs, HSBC, Fresnillo, Travis Perkins, AIG, PayPal, Caterpillar, AMD, Starbucks, Uber, Merck, Pfizer Taylor Wimpey, BAE Systems, Haleon, Qualcomm, Kraft-Heinz LSE, Adidas, Societe Generale, BMW, Ab InBev, ConocoPhillips, GoPro, Airbnb, Coinbase, Moderna Apple, Amazon WPP, Credit Agricole Trading update* Pets at Home, Next Dividends FTSE 100: BT, Unilever, Lloyds, Reckitt Benckiser, RELX, Rentokil FTSE 250: Oxford Instruments, Moneysupermarket.com, Games Workshop, Tyman, Rathbones, Jupiter, Inchcape, Vesuvius

Stocks in Asia rose overnight due to increased gains in the US late last week and optimism that Beijing would announce specific actions to boost its struggling economy. The Hang Seng index in Hong Kong increased by 1.7 %, China's CSI 300 went up by 1% and Japan's Topix saw a 1.6% rise. Monday's data revealed that the activity in China's service sector in July didn't meet expectations and manufacturing activity also decreased, further suggesting that Beijing would take actions to boost the economy. US stocks saw a significant rise on Friday after inflation, as measured by the Federal Reserve's preferred method, dropped to its lowest since the start of the COVID-19 pandemic. This resulted in the S&P 500 gaining 1% and the Nasdaq increasing by 1.9 1%. Eurozone GDP for Q2 and the Chicago PMI are the main events today, but more earnings are scheduled later in the week, particularly from Apple and Amazon.

BP's share price has experienced a significant drop of 20% from its peak in February. However, there are reasons for optimism. Source: Bloomberg Shares Commodities BP Price Shell plc Price of oil Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 28 July 2023 BP shares under pressure ahead of earnings One reason is the more positive outlook for oil prices. Currently, oil prices are at their highest level since late-April, and the overall outlook is the most encouraging it has been in months. Saudi Arabia recently announced a reduction of 1 million barrels per day in oil production for July, in addition to the 3.66 million barrels per day in cuts made by the OPEC+ oil cartel since October. One aspect that many investors may have overlooked in BP is its ability to generate profits in all market conditions. BP's trading teams reportedly accounted for around 14% of the company's total earnings in 2022. In the first quarter (Q1) of 2023, BP announced an underlying replacement cost profit of $5 billion, driven in part by exceptional oil and gas trading results. In the Q1, the company completed $2.2 billion of share buybacks using surplus cash flow. BP plans to allocate 60% of its cash flow for future buybacks this year. In its 2022 results, the company increased the Q4 dividend payout to 6.61p per share. Shell earnings declined in Q2 In the second quarter of its financial year, Shell has experienced a significant decline in profits, mainly attributed to the decrease in energy prices following the peak caused by the Russia-Ukraine conflict. The company reported net profits of slightly over $5 billion for the three-month period ending in June. This represents a decline of over 50% compared to the $11.5 billion achieved during the same period last year, and it fell short of analysts' expectations. Furthermore, this figure is significantly lower than the $9.65 dollars earned by Shell in the Q1 of this year. Despite these challenges, Shell remains committed to rewarding its shareholders by implementing a share buyback program and increasing its dividend payments. Mixed performance for both BP and Shell share prices in 2023 Both BP’s and Shell’s share prices have been unable to make much headway so far this year. BP had a strong start to the year, gaining 15% by February, with Shell up 10%, but these gains have ebbed away. The FTSE 100, not exactly a strong performer this year, has actually outperformed both companies so far. Share price comparison chart Source: Google Finance It must be noted that both share prices have enjoyed very strong recoveries since their 2020 lows, both having rallied around 190% since November 2020. Valuation remains low The underperformance of both share prices this year does at least have one consolation – it means the stocks continue to trade at low valuations. On current P/E ratios, BP trades at 4.4 times earnings and Shell trades at 5.06 times earnings. These are undemanding levels and do allow for outperformance in coming quarters if oil prices continue to pick up. BP share price – technical analysis Ahead of next week’s earnings, BP shares have rallied off their recent lows around 450p, but have stalled at the 200-day simple moving average (SMA). However, the breakout above trendline resistance from the April high remains intact, and a recovery back above 480p may bring out the buyers. The next hurdle for the price will be 490p, which held back gains in May. A move above this level then opens the way to trendline resistance from the February-high, which would come into play above 510p. Sellers would need a close below 446p to signal that this significant area of support had been firmly broken to the downside and that a more bearish view prevailed. BP chart Source: ProRealTime

Gold and silver fall back, while Brent crude makes headway Gold and silver under pressure while Brent crude pushes higher once again. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 28 July 2023 Gold returns to 50-day MA The price was knocked back sharply from the highs seen on Thursday, taking it back to the 50-day SMA. If this can hold then the price may be able to recover and move higher in coming sessions, potentially targeting $1980 once more. Sellers have been given a chance to drive the price lower, and from here the next target would be the $1900 level if a close below the 50-day SMA can be achieved. Source: ProRealTime Brent pushes higher Gains continue here, leaving the buyers firmly in charge. The price has shown no sign of reversing, and further upside would take the price towards the highs of February – April around $86 and $87. The current bounce from the mid-month low is still intact. A reversal back below the 200-day SMA might signal a pullback is beginning, but a move below $80 would be needed to negate the bullish view for now. Source: ProRealTime Silver slumps after BoJ meeting Silver prices fell sharply yesterday, taking them back to a two-week low. Having fallen back below the June highs some further weakness towards the 50-day SMA may result, or down to the 200-day SMA or the lows of June around $22.20. A recovery above $24.50 would give hope to the bulls that the price can recover and test the July highs once again. Source: ProRealTime

DAX hits new intraday record, while Dow edges higher and Nikkei holds on after BoJ decision The DAX rallied to a fresh intraday high yesterday, while the Dow is moving up once more. The Nikkei rallied off its lows after the mixed signals created by the BoJ’s latest policy decision. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 28 July 2023 DAX surges to new intraday high The index was given fresh strength by a dovish ECB meeting yesterday. European indices enjoyed a solid session, which may well have given them the strength to move higher over the medium term. It seems the index’s consolidation may have come to an end, and a move into new record high territory could develop. Sellers will want to see a close back below 16,000 to put the price below Wednesday’s low and also under the 50-day SMA. This could then open the way to 15,7000 or the July low at 15,500. Source: ProRealTime Dow edges up after losses The index’s rally appears to have run its course for now, as the price drops back below 35,500. Admittedly losses have been slight, and the index remains where it was some two days ago. This has yet to turn into a much deeper pullback, and looks more like consolidation. A bugger pullback below 35,000 could see the 34,500 highs tested as possible support. A revival above 35,500 could see the price move to the February 2022 highs at 35,861, and then on to 36,465 and the record high at 36,954. Source: ProRealTime Nikkei 225 steady despite BoJ developments The price was knocked back by the Bank of Japan meeting and by the comments that preceded it yesterday regarding tweaks to its monetary policy. The price dropped back to 32,070, and area that has held all month has support. This actually appears to have strengthened the bullish thesis, since the price has recovered and moved back to the 50-day SMA. A close above this and then above 33,070, which has held back gains this month, would bolster expectations of further upside, targeting trendline resistance from the June peak. A close below 32,000 is needed to hand the bears the advantage in the short-term, indicating a deeper retracement towards the 100-day SMA is possible. This would still leave the uptrend intact however. Source: ProRealTime

Vodafone, BT, Verizon, and Comcast could constitute the four best telecoms stocks to watch. Source: Bloomberg Shares Telecommunications Vodafone Comcast Verizon Communications BT Group Charles Archer | Financial Writer, London | Publication date: Tuesday 25 July 2023 Telecommunications companies design, manufacture, and deliver the technology required to digitally interconnect the world. They offer phone, internet, and television services, and also build and maintain the infrastructure needed to support them. The sector has become increasingly attractive in 2023 to dividend investors, and also to those seeking safer harbours. Telecoms is widely regarded as a defensive sector as customer demand remains stable through recessionary periods — and it is becoming harder to predict whether the long-anticipated global recession will come to pass. On the other hand, even the largest telecoms companies are still growing and innovating. As part of the tech sector, disruptions including 5G, AI, the Internet of Things, cloud computing, cybersecurity, and blockchains are all growth areas that could see the best telecoms stocks continue to grow. Indeed, Meucci devised the first phone in 1849, while Bell won the first US patent in 1876. It took until 1991 for Berners-Lee to develop the World Wide Web, and today half of the world carries a smartphone containing the sum of all human knowledge in their pocket, able to contact anybody in the world at a second’s notice. But the growth isn’t over. The global telecom market rose from $2,642 billion in 2021 to $2,880 billion in 2022, at a CAGR of 9%. And telecoms are forecasted to reach $3,629 billion by 2026 — making the best telecoms stocks perhaps worthy of portfolio consideration. Top telecoms stocks to watch 1. Vodafone Vodafone is a global telecoms operator with a footprint across 22 operating companies. In recent Q1 results, the FTSE 100 company saw group service revenue, which covers sales from contract payments, network use, and roaming, rise by 3.7% year-over-year to €9.1 billion. This increase was mostly due to price rises in the UK and increasing customer numbers, and it outperformed the average analyst estimate of 2.9%. However, Vodafone’s largest market of Germany saw service revenue fall for a fifth time in a row, this time falling by 1.3%. Further, price increases saw 120,000 broadband customers abandon the company, with new CEO and former CFO Margherita Della Valle noting ‘we have much still to do.’ For balance, its shares have fallen by 40% over the past year. However, Vodafone may see brighter days ahead. Performance in Spain and Italy has improved, and the group should benefit from restructuring that will see it shed 12% of its workforce, equivalent to 11,000 jobs. Beyond this, the company is planning a tie-up with Three to create the largest UK telecoms titan, though this is currently subject to a CMA investigation. 2. BT BT is the another globally significant FTSE 100 telecoms stock. It plays a major role in the UK and Ireland, but also operates internationally across 180 countries. Its share price has fallen by 47% over the past five years, but a significant factor in this decline has been investment into infrastructure that is only just starting to pay off. BT has a significant competitive advantage in the UK, as it’s responsible for maintaining the Openreach network, the national broadband network that is used and paid for by almost every other broadband operator. The company is determined to expand this full-fibre network alongside its 5G rollout, aiming to create the ‘best converged network’ possible. After acquiring EE, the company now believes itself far ahead of the competition in this regard and has entered into a novel partnership with Ericsson to provide commercial 5G private networks across the UK. In recent H1 results, CEO Philip Jansen enthused that ‘we’ve grown both pro forma revenue and EBITDA for the first time in six years while navigating an extraordinary macro-economic backdrop...Openreach Board has reaffirmed its target to reach 25 million premises with FTTP by the end of 2026 and plans to further accelerate take-up on the network.’ 3. Verizon Communications Verizon is by far the largest wireless network carrier across the continental United States, and this scale brings significant gross margin power and hefty free cash flow. Indeed, its cash flow has steadily exceeded its dividend payments for years, leaving the company relatively stable — though it has suffered long-term share price decline alongside its international peers. Positively, Verizon is also slowly starting to pay off its debt mountain. And while it had it the past relied on its wireline business, it’s been selling off assets to build up enough cash to build up a wireless business of tomorrow. Indeed, capital spending is now almost entirely devoted to acquiring wireless spectrum licences, and it was the largest bidder in the 2021 C-Band spectrum auction in the US. In recent Q2 results, consolidated operating revenue declined by 3.5% year-over-year to $32.6 billion, driven by reduced wireless equipment revenue and lower postpaid phone upgrade activity as consumers tighten their belts. However, the company saw an eight consecutive quarter of Verizon Business phone net additions, adding another 125,000 to the total. Verizon, like BT and Vodafone, could be setting itself up for significant long-term growth. 4. Comcast Comcast is the largest domestic internet service and pay-TV provider in the US, with the majority of its revenue derived from its cable communications sector. The S&P 500 company brings in hundreds of thousands of new internet subscribers every year, which typically sign up on high margin agreements. While there is increasing competition from wireless carriers, Comcast’s overwhelmingly dominant market share means it can continue to invest for the future. The company also owns NBC Universal, which has a substantial footprint in the US, and Sky, which is hugely influential across Europe. Comcast paid a whopping $39 billion for Sky after a bidding war in 2018, but the businesses are complementary and have helped its long-term performance. In recent full-year results, CEO Brian Roberts enthused that the company ‘achieved the highest levels of Revenue, Adjusted EBITDA and Adjusted EPS in our history and returned a record $17.7 billion of capital to shareholders.’ Further he noted that Comcast ‘delivered impressive revenue growth in broadband; grew wireless lines by 1.3 million, our best result since launch; more than doubled our Peacock subscribers, surpassing 20 million at year-end; nearly tripled Peacock revenue to $2.1 billion; ranked second in worldwide box office; and generated record Adjusted EBITDA at our theme parks.’

Legal and General, Rio Tinto, and Persimmon could constitute the three best FTSE 100 dividend shares to watch in August 2023. Source: Bloomberg Forex Indices Shares FTSE 100 Dividend Rio Tinto Charles Archer | Financial Writer, London | Publication date: Monday 24 July 2023 The FTSE 100 has enjoyed somewhat of a volatile 2023, starting the year at 7,554 points, breaking the symbolic 8,014 points barrier in February, before falling to as low as 7,257 points in early July. The index has bounced back over the past fortnight to 7,653 points, but further volatility seems likely given the FTSE’s overweighted composition of oilers, miners, and banks. For context, FTSE Russell data shows that 82% of FTSE 100 companies’ income is derived from overseas. This means that the strength of sterling is more important than UK domestic economic performance, and particularly the exchange rate with the US dollar. If a FTSE 100 company generates most of its revenue in US dollars, and then converts this revenue into sterling, a weaker pound means that the company will report higher earnings as the same of amount of US dollars translates into more pounds. This matters because when the Bank of England increases the base rate, the pound strengthens, hurting FTSE 100 corporate income. Of course, if rates start to fall, it hurts different FTSE 100 companies which are reliant on imports. And the trajectory of both inflation and interest rates in the UK remains uncertain. CPI fell from 8.7% in May to 7.9% in June — exceeding forecasts of a drop to 8.2%. Consequently, JP Morgan’s prediction that the base rate could rise to as high as 7% in a worst-case scenario, might now be overly pessimistic. However, while the markets are set by expectations, 7.9% CPI inflation is still higher than the 7.0% print of March 2022, and almost quadruple the official 2% target. And analysts still believe that the base rate will rise to 5.75% by the end of the year — and stay there for some time. This makes picking the bets FTSE 100 dividend stocks somewhat of a challenge. But where there’s uncertainty, there’s often opportunity. Best FTSE 100 dividend stocks to watch 1. Rio Tinto (LON: RIO) Rio Tinto shares have risen by 18.6% over the past year, leaving the FTSE 100 miner with an attractive 6.2% dividend yield. Despite a 36% decrease in net cash generated from operating activities last year, Rio Tinto remains committed to dividend investors having returned $8 billion in 2022, equivalent to 60% of total underlying earnings. Of course, Rio Tinto's dividend performance is closely tied to global demand, and particularly for the iron ore it mines from the Pilbara region in Western Australia, which is heavily influenced by Chinese demand. In an update in advance of Wednesday’s half-year results, Rio noted that ‘China’s economic recovery has fallen short of initial market expectations as the property market downturn continues to weigh on the economy...China’s reopening recovery started strongly but slowed in the second quarter. Consumption is still improving, while weakness in the export and property sectors is providing a drag to growth. Factory activity has slowed down, as manufacturing PMI contracted.’ However, while half-year results may disappoint in the short term, the company's strategic investments in projects such as the Oyu Tolgoi copper-gold project in Mongolia and the Rincon Lithium Project in Argentina position it for long-term growth. 2. Legal & General (LON: LGEN) Legal & General has been a FTSE 100 dividend favourite for years, and while past perfomance is no guarantee of future results, 2023 may be no different. Its share price has dropped by 7.5% year-to-date, leaving LGEN with an attractive dividend yield of 8.3%. The FTSE 100 insurer boasts a strong balance sheet, reflected by its a Solvency II coverage ratio of 240%. In FY22 results, LGEN saw operating profit rise by 12% to over £2.5 billion, with a return on equity of 20.7% and new business from PRT rising from £7.2 billion to £9.5 billion. This growth included a 23% increase from international markets, highlighting the FTSE 100 company’s expansion plans in the US, Asia, and Europe. Its reliable dividend is secured by its wide economic moat; the brand is well recognised and generally trusted by over 10 million customers in the competitive finance sector. Further, it sports a diversified business model, focusing on pensions, annuities, and equity release products, which provides solid growth opportunities as western populations age. Most importantly, the company increased its full-year dividend by 5% to 19.37p in 2022, demonstrating a commitment to rewarding shareholders. The only concern to consider — other than inflation — is that long-term CEO Nigel Wilson is leaving at the end of the year. His replacement, António Simões, has already been selected and will formally take up his post on 1 January 2024. This leaves ample time for the handover, but there is usually volatility when a reliable pair on hands cedes control of the tiller. 3. Persimmon (LON: PSN) Persimmon shares have fallen by 37% over the past year, reflecting the challenging housing market amid rising rates, new restrictive landlord rules, and the withdrawal of key first time buyer incentives including Help to Buy. However, the dividend yield now stands at a whopping 14.4%. While this may not be sustainable, this may prove too tempting for some investors to ignore, and especially those with a long-term mindset who are prepared to wait for the real estate cycle to return to positivity. In FY22, revenue at the UK’s largest housebuilder reached £3.82 billion and pre-tax profits rose above £1 billion. Meanwhile, new build completions rose slightly to 14,868. And in Q1 results, CEO Dean Finch enthused that ‘Trading over recent weeks has offered some signs of encouragement with visitor numbers up, cancellation levels normalising and sales rates continuing the steady improvement evident since the start of the year. If sales rates continue at the levels seen year to date, we would expect full year 2023 volumes to be toward the top end of the previously indicated range of 8,000 to 9,000 completions.’ The CEO also noted that ‘The longer-term demand fundamentals for new homes remain robust and Persimmon has made significant progress over the past two years in building a stronger, more sustainable business for the future.’ Half year results arrive on 10 August.

Currys, NextEnergy Solar Fund, and JD Wetherspoon could constitute the three best FTSE 250 stocks to watch in August 2023. Source: Bloomberg Indices Shares Share Dividend FTSE 100 Inflation Charles Archer | Financial Writer, London | Publication date: Friday 21 July 2023 The UK’s domestically focused index, the FTSE 250, has had a rather average 2023 — but due to a better-than-expected CPI inflation print, it has risen by 3.75% over the past five days, and is now in the green at circa 19,264 points. Much of the recent rise can be attributed to falling inflation. CPI fell from 8.7% in May to 7.9% in June — exceeding forecasts of a drop to 8.2%. Consequently, market expectations from Schroders that the base rate could rise to 6.5%, or according to JP Morgan, to as high as 7% in a worst-case scenario, seem to have tapered down. However, while the markets are set by expectations, it is worth noting that 7.9% CPI inflation is still higher than the 7.0% print of March 2022, and almost quadruple the official 2% target. And analysts still believe that the base rate will rise to 5.75% by the end of the year — and stay there for some time. Former Bank of England Governor Mervyn King believes that rate rises will tip the UK into a recession, a view shared by Legal & General chief investment officer Sonja Laud. With FTSE 250 shares largely dependent on a healthy UK economy, the recent good news should still be viewed in context. But where there’s doubt, there’s often opportunity. And there are still many FTSE 250 companies worth considering. FTSE 250 shares to watch 1. Currys Unlike many FTSE 250 unknowns, Currys is a company which almost every UK investor will have heard of. The electronics retailer suffered during the pandemic and has fallen by a whopping 70% over the past five years to 54p today. In poorly received full year results released on 6 July, the business informed investors that adjusted earnings before interest and tax had fallen by 24% year-over-year to £66 million. Despite UK earnings rising by 45% to £53 million, profits in its Nordics division slumped by 82% to £26 million. However, it noted that competitors in North Europe are currently slashing prices to get customers, which it believes is not sustainable over the longer term — and that profitability in the division will return after a period of volatility. It’s worth noting that Currys shares fell to as low as 48p on results day, so there has already been a mild recovery — and shares were changing hands for as much as 82p in Q1. Of course, the final dividend has been cut to shore up the cash position. But insiders including the Chair and CFO bought more shares on results day — and Frasers has rapidly built up an 11.06% stake, adding to its prolific high street retailer holdings. 2. NextEnergy Solar Fund NextEnergy Solar Fund is attractive for a different reason; it currently sports a 7.7% dividend yield and is at a hefty discount to its net asset value. For context, its shares trade for 97p and its NAV stands at 114.3p. And the shares have dropped sharply since mid-June, presenting a potential buying opportunity. The company has a target FY dividend of 8.35p, with forecasted cash dividend cover of 1.3x-1.5x. It’s paid out £305.8 million in dividends since the IPO, and has 99 solar assets with 865MW installed, worth £1.2 in billion gross asset value. And it’s also aiming to grow in the energy storage market — which is top of the political agenda given the energy disaster of last winter. With the UK planning to add circa 30GW of storage capacity, NextEnergy’s new focus on energy storage puts it in a strong position, especially as it is already highly cash generative. The company has changed its internal rules to allow further investment in energy storage — rising from 10% of gross value to 25%. Construction of its first standalone 50MW battery storage project is due to commence shortly. It’s acquired the development rights to a 250MW project in east England, formed two JV partnerships with Eelpower to target a £300 million pipeline of energy storage opportunities, and announced a retrofit programme to add battery storage to its existing solar assets. Better yet, the majority of its regulated revenues are tied to the RPI index, giving it some immunity from the UK’s sky-high inflation. 3. JD Wetherspoon JD Wetherspoon shares have risen by 54% year-to-date to 698.5p, buoyed by post-pandemic spending, good weather, and its reputation for value amid the cost-of-living crisis. Interestingly, the company recently noted that its offering attracts customers from all income ends, — ‘a recent survey by market researchers CGA indicates that the average income of Wetherspoon customers is 7% above that of the average ‘high street pub consumer.’ In July’s trading update, like-for-like sales for the first 10 weeks of the final quarter of its financial year increased by 11%, when compared to the same period in the last full financial year before the pandemic (2019). And compared to FY22, like-for-like sales increased by 11.5% in the fourth quarter to date and by 12.9% year-to-date — leaving JDW with financial headroom of £289 million. As of 9 July 2023, net debt had fallen by £114 million to £688 million, despite investing £116 million in new pubs, £82 million in freehold reversions, and raising £240 million in equity. And Wetherspoon’s free cash flow in this financial year is now anticipated to be ‘substantially in excess of its profit before tax.’ Best of all, waivers for its banking covenants from its banking syndicate that were put in place during the pandemic ‘will no longer be required at the end of the current quarter.’ Further share price increases may be incoming.

Gold, oil and wheat prices all move higher Commodities are broadly higher today, thanks to a softer dollar following the Fed decision. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 27 July 2023 Gold rises for a third day A softer dollar has provided scope for gold to move higher, and now it is back to the highs seen last week. Further gains from current levels would target $2000, and then on to $2050. The bullish view has been given renewed strength by recovery above $1850. Sellers would need a move back below the 50-day SMA to suggest that the rally has been stalled, and then further losses might target the lows of June around $1900. Source:ProRealTime WTI looks to move higher After an indecisive day yesterday, the price has edged higher, holding on to the gains made over the past two weeks. A new push higher would target $81, a resistance level in February and March. Beyond this, the April high at $83.40 comes into play. Trendline support from the June lows continues to underpin the move higher. A move back below the 200-day SMA might negate the short-term bullish outlook, and signal a possible move back to $75. However, the bears will need a move back below $74 to suggest that they are in control once again. Source:ProRealTime Wheat rallies off 200-day SMA After a drop yesterday the price has stabilised, bouncing off the 200-day SMA. This leaves the general rally intact, though a close above 770 is still needed to solidify the bullish view and signal that a breakout has taken place. Above this the 788 and 806 levels come into view. Trendline support from the July low has helped maintain the move higher, but a drop back below the 200-day SMA would also see the price break this support, and introduce a potential bearish element to price action. Source:ProRealTime

S&P 500 and Nasdaq 100 make gains, while CAC40 struggles US indices have made headway after the Fed decision, but today’s ECB meeting has kept the CAC40 in check. Source:Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 27 July 2023 S&P 500 hits new 2023 high The index has surged to a new high for the year, and its highest level since April 2022. The Fed decision last night gave space for the dollar to weaken and equities to rally, and the S&P 500 rallied off its lows to clear 4580. Further gains now target the March 2022 high at 4631, while beyond this January’s high at 4730 and then the record high at 4817 come into view. While the price may look overextended in the short-term, so far there is little sign of any substantive turn lower. For this to happen we would need a drop back below 4500, and then a move to the 4400 support level or the 50-day SMA might come into view. Source: ProRealTime Nasdaq 100 resumes its move higher A similar picture prevails for the Nasdaq 100, although it remains below is recent highs for the time being. Last week’s high at 15,932 is the next target to watch, while beyond this, the mid-January high at 16,021 comes into view. After this, the final hurdle for now becomes the record highs of November and December around 16,630 (and November’s intraday record high of 16,769). The index continues to defy all expectations of a turn lower, although more tech earnings will arrive over the next week. The most recent drop fizzled out after two days, which in itself should send a warning to sellers that there is still plenty of bulls willing to step in after the slightest weakness. The price remains solidly above the 50-day SMA, and for now shows no inclination to head lower. Trendline support from the April low and then the 50-day SMA are close by in the event of a pullback. Source: ProRealTime CAC40 mixed ahead of ECB decision The index hit a two-week low yesterday, but rallied into the Fed decision and beyond. Unsurprisingly, some of that enthusiasm has ebbed as investors contemplate the ECB meeting today. The price has failed to hold its overnight highs, and is struggling to hold above trendline resistance from the April high. Bears will want to see a close below 7290, which might come about from a more hawkish ECB meeting. Alternately, more gains would come about through a move to 7450, with a close above this level reinforcing the bullish outlook. This would bring 7500 and then the April high at 7584 into play. Source: ProRealTime

Hi @Achraffpro Welcome to the community! Looking forward to the ideas and experience you will share with the community. All the best - MongiIG

Stocks in Asia were mostly higher on Thursday following the US Federal Reserve's decision to raise its benchmark interest rate. Hong Kong's Hang Seng index rose by 1.3%, while the CSI 300 index and Australia's S&P/ASX 200 climbed by 0.5% and 0.8% respectively. The US central bank's move to raise rates by 0.25 percentage points to a target range of 5.25-5.5% was seen as a return to tightening after keeping rates steady in June. However, investors now believe that this could be the last rate hike for the year. In a statement, the Federal Open Market Committee noted that US inflation remained "elevated", job gains had been "robust", and economic activity was growing "at a moderate pace". Fed chairman Powell also mentioned the possibility of another rate hike in September, but stressed the need for careful assessment of incoming economic data. The S&P 500 closed flat following Powell's remarks, while the Nasdaq Composite dipped slightly. The Japanese yen strengthened by 0.5% against the dollar ahead of the Bank of Japan's interest rate announcement on Friday. There are expectations that the Bank of Japan may begin to shift away from its ultra-loose monetary policy. Today's key data includes the ECB rate decision, at which rates are expected to rise again, along with US GDP for Q2, durable goods orders, initial jobless claims and pending home sales. Earnings in the US include Intel, Ford and McDonald's.

Nice!

You are welcome @iamcryptic All the best - 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

Microsoft’s share price: what to expect from its Q4 results Source: Bloomberg Shares Microsoft Revenue Share price Valuation Personal computer Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 19 July 2023 When does Microsoft Corp report earnings? Microsoft Corp is set to release its quarter four (Q4) financial results on 25 July 2023, after market closes. Microsoft’s earnings – what to expect Current market expectations are for Microsoft’s upcoming Q4 2023 revenue to turn in a 6.9% growth from a year ago, which will be a slightly softer read from the 7.1% in Q3 2023. However, expectations for earnings per share (EPS) are for a 14.5% year-on-year increase, a significant improvement from the 10.4% growth in Q3 2023. Market pricing for continued recovery over coming quarters Despite the ongoing downside risks to macroeconomic conditions, market expectations are positioned for a continued recovery in Microsoft’s top-line over coming quarters, tapping on the resilience of its business products and the added growth catalyst surrounding Artificial Intelligence (AI). Thus far, the positive surprise in previous quarter’s results have been in line with the worst-is-over narrative for its revenue growth and further validation in the upcoming company’s forward guidance may likely provide an added boost. Given that the previous quarter’s outlook stated that the management saw “many of the trends in Q3 continuing through Q4” and US economic conditions continuing to surprise significantly to the upside, the odds seem to be for the recovery trend to continue at the upcoming quarter. To recall, the US economic surprise index has registered its highest level since March 2021 as a reflection of current economic resilience. Source: Refinitiv Weak PC market to stabilise, with ‘Intelligent cloud’ segment to remain resilient Based on International Data Corporation (IDC) data, global PC shipments could remain weak, with the period April-June 2023 delivering its sixth consecutive quarter of contraction at -13.4%, albeit a smaller contraction than the 29.0% in the January-March period. Refinitiv estimates suggest that revenue for its ‘More Personal Computing’ segment could see a 5.7% year-on-year decline for Q4 2023, but at least, some early signs of bottoming out could have been in place over the past two quarters. On the other hand, its ‘Productivity and Business Processes’ segment is expected to stay subdued for now, with an 8.9% growth consensus slightly below the 10.9% in the previous quarter. Both segments account for a combined 60% of Microsoft’s overall revenue. That will continue to leave much of the heavy-lifting to the ‘Intelligent Cloud’ segment, which is expected to retain its double-digit growth at 13.6% year-on-year at the upcoming results, before seeing stronger growth in FY2024. Source: Refinitiv Growth catalysts becoming more visible Microsoft has flexed its muscles lately in the race to offer generative AI tools to consumers, announcing its new AI subscription service, Copilot, for Microsoft 365, which could reportedly cost enterprise users an additional 50% or more per month over the costs of existing plans. The management will likely address its growth potential and broader rollout timeline at the upcoming earnings call. On first glance, the huge user base of 345 million for its Microsoft 365 suite and dominance of its 365 products in the market (>50% market share for office productivity software) provide some conviction for a ramp-up in penetration rate for years to come, which could support its top and bottom-line growth momentum. Any further updates on its US$69 billion acquisition of Activision Blizzard will also be in focus, but given that it could drag for longer, reaction to headlines has been more subdued. Any successful go-ahead could anchor the company’s foothold in the cloud gaming market. Of course, not to forget a potential ad monetisation stream from its chatbot, Bard, that is currently on the plans. A strong track record of earnings outperformance thus far Microsoft generally has a strong track record of earnings outperformance. Since 2017, it has only missed earnings estimate once out of the past 23 quarters. The outlier was in Q2 2022 but despite the lower-than-expected earnings per share (EPS) recorded for the quarter, its stock price managed to gain 5% in its aftermath due to a rosy guidance. On a revenue basis, it has also outperformed on 20 out of the past 23 quarters since 2017. Therefore, the odds seem to be heavily leaning towards another positive surprise at the upcoming results, especially with beaten-down expectations providing a lower hurdle of outperformance. Heading into the current earnings season, expectations for S&P 500’s Q2 earnings are for a 7.1% contraction from a year ago, which is the largest earnings decline reported by the index since Q2 2020. Source: Refinitiv Valuation: Not cheap, with pricing for future growth potential A look at Microsoft’s valuation will suggest that market participants are attributing a significant premium for the company’s future growth potential, with its forward price-to-sales leaning towards the high side at 11.2, while its forward price-to-earnings ratio also trades significantly higher than its 10-year median. While that may be something to keep in mind, it could still be risky to position against the prevailing upward trend for share price, given that valuation could become pricier, especially amid the ongoing hype around the AI boom. Source: Refinitiv Technical analysis – Share price at a fresh all-time high The formation of higher highs and higher lows since November 2022 has put an upward trend in place, with Microsoft’s share price break above the US$350.00 level to deliver a fresh all-time high. A turn higher in its moving average convergence/divergence (MACD) also puts a bullish crossover in place, which suggests renewed interest after a period of exhaustion in upward momentum over the past weeks. The Relative Strength Index (RSI) on the daily chart remains above the key 50 level, putting buyers largely in control for now. The broader trend may retain its upward-bias state, possibly until the lower trendline of the pitchfork pattern is broken down to indicate a potential trend reversal. That may leave the US$327.00 level as a crucial support to hold, where its Ichimoku cloud support resides as well. A series of support lines also remain on watch to support any higher low, which includes its 50-day and 100-day moving averages (MAs). Source: IG charts