Jump to content

MongiIG

Administrators
 View Profile  See their activity

  • Posts

    9,875

  • Joined

  • Last visited

  • Days Won

    41

 Content Type 

Blog Entries posted by MongiIG

  1. MongiIG
    After last week’s market reaction, Anglo shares have now fallen by more than 40% over the past year. Is a buyout on the cards?
    Source: Bloomberg   Shares Commodities Anglo American plc United Kingdom Demand Glencore  
     Charles Archer | Financial Writer, London | Publication date: Monday 11 December 2023  Anglo American (LON: AAL) shares hit another 52-week low last Friday, falling to just 1,630p. Even having recovered to 1,825p today, the FTSE 100 miner has still lost more than 40% of its market value over the past year — leading to speculation that it could join the growing list of London-listed companies with a buyout target on its back.
    For context, Anglo shares were last changing hands at these levels in mid-2020 when it was recovering from the pandemic-mini-crash. And the miner hit 4,170p as recently as April 2022.
    Anglo American Performance Update
    Anglo American’s trading update — released late last week — saw the company announce that capital expenditure will be cut by a significant $1.8 billion to 2025 as part of what CEO Duncan Wanblad called ‘improving our resilience’ within the tighter macroeconomic environment.
    The FTSE 100 miner’s capex target for 2023 has been cut from $6 billion to $5.8 billion, with steeper cuts due in 2024. Despite the market reaction, it’s worth noting that Anglo is still investing in core projects, including the Woodsmith natural fertiliser mine in Yorkshire in addition to the Quellaveco copper mine in Peru.
    However, further funding for Woodsmith after next year will be contingent on board approval — expected to be decided in early 2025. And looking to 2025, Anglo is planning capex of just $5.7 billion, compared to the previous $5.8 billion to $6.3 billion expectation.
    While these cuts could see lower cash flow and perhaps smaller dividends in the future, arguably this cost discipline may stand the company in good stead through this higher rate environment. And it may be the first of many to cut back expenditure which was previously budgeted for in a lower rate, higher growth environment.
    More positively, Wanblad also notes that ‘looking ahead, the fundamental supply and demand picture for many metals and minerals is ever more attractive. Many of the world's major economies are focusing their resources on meeting global decarbonisation timelines and, as the global population grows, continues to urbanise and demands higher living standards, we expect unprecedented demand for responsibly produced raw materials.’
    In commodity terms, Anglo does have a more diversified asset base than its FTSE 100 compatriots. The company derives around a third of earnings from platinum group metals, and an additional 10% from diamonds. But both categories have been hit hard in 2023.
    And perhaps the bigger problem is the cut to copper production guidance — especially when the metal is expected to see demand rise through the 2020s. In August, Anglo said it was planning on generating at least 910,000 tonnes of copper next year — but this could now be as low as 730,000 tonnes. And predicted output in 2025 will now be even lower than 2024 at between 690,000 and 750,000 tonnes.
    FTSE 100 buyout target?
    While a buyout may be some time off, Anglo American has seen circa £30 billion wiped from its market capitalisation since Wanblad took the reins in April 2022.
    It’s underperformed other FTSE 100 miners for years and is set to face yet more problems this week as a South African court prepares to rule on whether a class action lawsuit concerning historical lead poisoning claims in Zambia can be brought against it.
    It’s worth noting that consolidation in the face of rising costs has been a significant theme of 2023 — Allkem and Livent, BHP and Oz Minerals, Newmont and Newcrest, Glencore and Teck — and Jefferies analysts consider that if Anglo’s share price ‘continues to lag’ it could become part of the ‘broader trend of industry consolidation.’
    The analysts note that Glencore-backed Xstrata (now fully part of Glencore) approached Anglo about a merger in the aftermath of the Global Financial Crisis, and argue that a merger today could be even more compelling than in the past due to ‘operating synergies, even greater marketing benefits, and a cost of capital arbitrage.’
    And with the share price in the doldrums, this leaves Anglo American as a potential buyout target in 2024.
    Past performance is not an indicator of future returns.

       
    This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
  2. MongiIG
    Technicals remain bullish ahead of the fundamental events, while in sentiment CoT speculators have shifted to the middle from a previous heavy sell.
      Source: Bloomberg
      Shares Federal Open Market Committee Consumer price index Unemployment Day trading Commitments of Traders  Monte Safieddine | Market Analyst, Dubai | Publication date: Monday 11 December 2023 07:46 Digesting stronger US labor data
    Plenty of noteworthy data emerged from the US labour market late last week, and it generally exceeded expectations. Key highlights include Non-Farm Payrolls for November, surpassing estimates with a 199K increase. The unemployment rate saw a significant drop to 3.7%, accompanied by a parallel decrease in the underemployment rate to 7%.
    Wage growth, higher than anticipated at 0.4% month-on-month, held steady at 4% year-on-year. The labour force participation rate rose to 62.8%, while the employment-population rate increased from 60.2% to 60.5%. Additionally, weekly claims reported figures beneath estimates for both initial and continuous claims.
    A notable positive was the University of Michigan's preliminary readings on consumer sentiment, surging to 69.4. Particularly noteworthy was the drop in inflation expectations, with the 12-month figure plummeting from 4.5% to 3.1% and the five-year from 3.2% to 2.8%.
    Despite successive weeks of gains, key indices exhibited a mixed performance. In the bond market, Treasury yields experienced another week of losses at the furthest end, and similarly in real terms, while the 10-year remained relatively unchanged.
    Week ahead: key data releases, auctions, and FOMC decision insight
    As for the week ahead, it’s an impacting one and on a few fronts for the US. In terms of data, expect Consumer Price Index (CPI) readings for November to take the attention early on, where expectations are its y/y headline print will drop a notch to 3.1%, but remain stickier when it comes to its core. Producer prices will be the day after, with y/y figures that have been trending in the right direction, and trade pricing on Thursday after negative prints for both exports and imports (m/m and y/y) last time around.
    Releasing at the same time will be retail sales after the small dent for October that managed to best estimates even if in contracting territory. Friday includes preliminary Purchasing Managers’ Index (PMI) for this month, where manufacturing was a miss, falling back into contraction, while services improved to remain in expansionary territory.
    There will be a few auctions, and for tonight, it includes the 10-year, with the 30-year tomorrow night to see how well demand manages to keep up with supply. And while all that could sway what policymakers could do, we will find out what they will actually do this Wednesday with the Federal Open Market Committee (FOMC) policy decision. Expectations are they will hold (CME’s FedWatch), and while market participants will note any tweaks in its statement (after they included tighter financial conditions last time around when yields were significantly higher) and the tone from Federal Reserve (Fed) Chairman Powell in his press conference thereafter, expect heavy attention on their projections and dot plot and the type of divergence from what market pricing suggests.
    Dow Technical analysis, overview, strategies, and levels
    Lack of a play on the weekly time frame with the intraweek highs, and lows, within its previous weekly first levels, though the little change by the close and near the highs keeping plenty of technical boxes in the green in this time frame. It's greener on the daily time frame, though the intraday action also lacked a play for Thursday's first levels, even when factoring Friday's intraday highs, the technical overview in the shorter-term time frame also matching this one but an ADX (Average Directional Movement Index) in trending territory capable of tilting it to a stalling bull instead.
     
      Source: IG
    IG client* and CoT** sentiment for the Dow
    As for sentiment, a notable shift amongst CoT speculators from heavy sell 68% to the middle in just one week (longs up 3,718, sizable drop in shorts by 21,645), ending months of majority sell bias, though interesting to see if it can move, and stay in majority buy territory for a longer period than it did last time. IG clients are still in extreme sell territory with little change week-on-week, but intraweek moves show fresh shorts looking to unwind swiftly.
      Source: IG
    Dow chart with retail and institutional sentiment
      Source: IG
    *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of the start of this week for the outer circle. Inner circle is from the start of last week. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
        This information has been prepared by IG, a trading name of IG 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.
    CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
  3. MongiIG
    With bets that the Fed’s hiking cycle has peaked, alongside a series of rate cuts priced through 2024, the USD/JPY has touched its two-month low this week.
    Source: Bloomberg   Forex Bank of Japan United States dollar USD/JPY Federal Reserve Japanese yen
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 07 December 2023 11:17 Fed-BoJ policy divergence may be set to reverse in 2024
    The USD/JPY had a stellar run through the bulk of this year, with the pair taking its cue from the widening US-Japan bond yield differentials, as a result of monetary policies’ divergence between both central banks. But with recent bets that the Federal Reserve (Fed)'s hiking cycle has peaked, alongside 125 basis point (bp) worth of rate cuts priced through 2024, the 10-year bond yield differentials have since narrowed significantly from its peak of 4.148% to the current 3.412%, paving the way for USD/JPY to touch its two-month low this week.
     
    Source: TradingView  
    As we head into 2024, the policy-divergence story may be set to reverse further if inflation in the US continues to move in line with its current trend – a gradual moderation in pricing pressures. US economic conditions have also turned in softer in recent months, revealing a lesser extent of outperformance compared to months earlier, which provides validation to the dovish market views on the Fed’s policy outlook.
    On the other hand, the Bank of Japan (BoJ) has been heading the other way, taking intermittent (though, minor) steps towards policy normalisation this year while talking up the need to shift away from its current ultra-accommodative policies. While the recent plunge in oil prices and still-subdued wage growth may allow the BoJ room to exercise more patience in its policy pivot, an exit from its negative interest rate policy (NIRP) seems to remain a matter of when and not if. Current market rate pricing has anchored it down to be by the second quarter (2Q) of 2024.
     
    Source: Refinitiv  
    Still extreme bearish yen-positioning may offer room for unwinding
    From the Commodity Futures Trading Commission (CFTC) data, speculative net-short positioning in the Japanese yen continues to hover near its extreme last week, briefly touching its highest net-short levels in five years during mid-November this year. The extreme-bearish take among speculators may offer room for potential short-squeeze opportunities into 2024, if hawkish expectations for the BoJ were to be validated.
     
    Source: Refinitiv  
    Technical analysis: USD/JPY eyeing a break of critical support
    For the USD/JPY, multiple retests of the 152.00 level in November this year have failed to find the conviction to push to a new decades-high. The pair has retraced 3.7% from its recent top to a crucial level of support at the 146.74 level, where a well-respected lower channel trendline support since the start of the year stands in place. The bears may attempt to strive for a breakdown of this level next, which may unlock further downside towards the 145.00 level, where its 200-day moving average (MA) lies.
    Recent downside has also marked a breakdown of its Ichimoku cloud support on the daily chart for the first time since April 2023, while its daily relative strength index (RSI) has dipped below the key 50 level for the first time in four months as well, both reflecting some near-term bearish momentum at play. Should the bulls manage to defend the lower channel support trendline, they may face immediate resistance at the 149.20 level, where its 100-day MA stands alongside the lower edge of its daily Ichimoku cloud.
     
    Source: IG charts
      IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

    The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

    No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
    Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
  4. MongiIG

    ​​Disney struggles to sell its story

    By MongiIG,


    Market News
    Investors remain unconvinced that Disney is a promising long-term play, even though the stock looks cheap on an earnings basis.
    Source: Bloomberg   Shares The Walt Disney Company Price Share price Stock Candlestick
     Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 07 December 2023 14:46 Disney struggles to sell its story
    Despite efforts to recover from the impact of the pandemic, shareholders of Disney continue to express disappointment. One key concern is that the company's net income has not yet returned to pre-pandemic levels. This lack of recovery has been a cause for concern among investors.
    Furthermore, the losses incurred by Disney+ and Hulu have only added to the negative sentiment surrounding the company. These streaming platforms, which were expected to be growth drivers for Disney, have not performed as well as anticipated.
    However, there is a glimmer of hope as Disney recently announced the restoration of its dividend, albeit at a small scale. This move is seen as a step in the right direction and may help improve investor sentiment.
    Despite these challenges, the stock price of Disney remains relatively cheap, trading at around 19 times earnings, which is similar to its valuation in 2020. This could present an opportunity for investors looking for a bargain.
    Nevertheless, what the company lacks is a positive catalyst that could drive the stock price higher. Without a clear growth strategy or a significant development, it may be difficult for Disney to regain the confidence of shareholders in the near term.
    Analyst ratings for Disney
    Source: Refinitiv Refinitiv data shows a consensus analyst rating of between ‘buy’ for Disney – 8 strong buy, 16 buy, 6 hold and 2 sell - with the mean of estimates suggesting a long-term price target of $104 for the share, 14% above its current value as of 7 December 2023.
    Technical outlook on the Disney’s share price
    The Disney share price, which has risen by less than 3% year-to-date, remains in a long-term downtrend and currently trades around its 55-week simple moving average (SMA) at $92.33.
    Disney Weekly Candlestick Chart
    Source: TradingView The good news for the bulls is that in line with rapidly rising US stocks in November the Disney share price has risen by around 22% from its October low at $78.73.
    For the recent bullish reversal to gain traction, a rise above the 2021-to-2023 downtrend line at $95.26 and, more importantly, the November peak at $95.61 would need to be seen on a daily chart closing basis. Such a move would confirm a medium-term bullish reversal.
    Disney Daily Candlestick Chart
    Source: TradingView In this scenario, the May earnings price gap to the 10 May low at $100.40 should get filled and the May peak at $103.91 be reached.
    At present the 200-day SMA at $90.27 is being revisited, though, around which the Disney share price may linger for a few days. Below it good support can be spotted at the positive November earnings price gap seen between $86.94 and $84.92. This area also incorporates the July and early August lows as well as the September and October highs, making it technically significant.

       
    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

    Hang Seng 2024 outlook

    By MongiIG,


    Market News
    It has been quite an unexpectedly turbulent year for the Hang Seng index, which is on track to mark its fourth consecutive year of decline, a stark contrast to other global markets.
    Source: Bloomberg   Indices Hang Seng Index China Hong Kong Economy of China Recession
    Hebe Chen | Market Analyst, Melbourne | Publication date: Thursday 07 December 2023 08:25 It has been quite an unexpectedly turbulent year for the Hang Seng index, which is on track to mark its fourth consecutive year of decline, a stark contrast to other global markets.

    Hang Seng 2023 review

    China’s exit from its Covid-zero restriction in the final month of 2022 led many to believe that 2023 would be a year of recovery for the beleaguered Chinese and Hong Kong investment markets. Thus, the optimism following China's reopening initiated a positive uptrend for Hong Kong stocks in the first month of 2023. However, it turned out that the beginning of the year was also its peak.

    Since then, worrying signs started emerging across all corners of the Chinese economy, from a sharp downturn in the property sector, deflationary domestic consumption to a slumping export market. All these factors snowballed into a widespread systemic and confidence crisis for the world’s second largest economy and its investment markets. Consequently, the Hang Seng index had fallen more than 20% and entered bear market territory in August and reached its yearly low in December.
       
    Jan
     
     
    Feb
     
    March
     
    Apr
     
    May
     
    June
     
    July
     
    Aug
     
    Sep
     
    Oct
     
    Nov
     
    Monthly%
     
     
    +10.4%
     
    -9.4%
     
    +3.1%
     
    -2.5%
     
    -8.3%
     
    +3.7%
     
    +6.1%
     
    -8.5%
     
    -3.1%
     
    -3.9%
     
    -0.6%
    Source: Hang Seng Index
    In terms of each sector’s performance, as of the end of November, the energy and telecommunications sectors were the only two to register gains, rising by 17.97% and 15.25%, respectively. In contrast, the property and consumer sectors endured significant losses, by more than 20%, primarily attributed to the intensified property crisis in mainland China and a contracting domestic consumption market.
    Source: Hang Seng Index (up to November 2023)  
    Hang Seng 2024 outlook

    Looking ahead, it’s likely that the Hang Seng Index may continue to grapple with the repercussions of years of decline and underperformance in the upcoming year. The index has been left far behind with an average 11% loss in the past four years while its peer markets like US and Japanese stocks moving substantially higher. The gap, unfortunately, may continue to widen as the fleet of global capital liquidity due to the lack of confidence for a speedy recovery. In October 2023, Hang Seng’s trading volume was down 20% year over year following a 10% down in the previous month.

    In October 2023, the Hang Seng's trading volume declined by 20% year over year, following a 10% decrease in the previous month. This further underscores the challenges and uncertainties faced by the index and the prevailing cautious sentiment among investors.

    Hang Seng index/US stocks/Japan stocks five-year performances
    Source:Tradingeconomics Additionally, despite China’s GDP is expected to grow by 5.4% this year (2023) according to IMF, there’s a prevailing expectation that a much slower economic growth will become the “new norm” for China. The continued weakness in the property sector, together with subdued internal and external demand could restrict the growth of Chinese economy to fall below 5%, the lowest level in over two decades.

    If there's any reason for optimism, one of the main sources to look forward to could be the large-scaled fiscal stimulus support from Beijing. Since the second quarter of 2023, the Chinese government has explored various ways to reinvigorate the investment market, including the issuance of an additional $137 billion in sovereign debt and a rare mid-year increase in the fiscal deficit. While the impacts of these measures seemed to be mostly short-lived in the stock market, these top-down supports could potentially lay the groundwork for a rebound in economic activities in the year to come.

    Furthermore, following a year of disappointment, it's also possible that global investors' lofty expectations will be adjusted, thereby lowering the bar for Hong Kong stocks to shine.

    Hang Seng Index technical analysis

    From a technical perspective, the Hang Seng index appears to be following a downward trajectory since the peak in January and is on track to revisit the floor level since 2009. However, over the short term, the downtrend may stabilize near the crucial psychological level at 16000 with the oversold signals suggesting a rebound could be in sight.

    On the upside, a renewed push higher above 17,800 could pave the way to challenge the November high, with the potential to reach the 20-week moving average (MA) above 17,900.

    Hang Seng Index weekly chart

       
    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.
  6. MongiIG
    Gold prices have been resilient through 2023, briefly pushing to an all-time high this week. How will 2024 be for the yellow metal?
    Source: Bloomberg   Forex Commodities Gold Federal Reserve United States Gold as an investment
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 06 December 2023 03:52 Central banks’ buying and safe-haven flows supported gold prices in 2023
    Gold prices have been resilient through 2023, briefly pushing to an all-time high of US$2,135 per ounce this week, despite the US interest rate registering its highest level in more than 22 years. The staggering performance could come amid strong central banks' demand and safe-haven flows from geopolitical tensions in the Middle East, which aid to offset the downward pressures that were incurred from the surge in Treasury yields and US dollar’s strength.
    Data from the World Gold Council revealed that on a year-to-date basis (as of 3Q 2023), the net 800 trillion tonnes of purchases from central banks are 14% higher than the previous year. The onset of the Israel-Hamas war in October has also triggered some safe-haven flows for the yellow metal, which saw prices reclaim its key psychological US$2,000 level. The likelihood for the conflict to drag on for longer may continue to underpin safe-haven demand into 2024, alongside the shift in rhetoric from the Federal Reserve (Fed) on its policy outlook.
     
    Source: Metals Focus, World Gold Council  
    Landscape for gold may remain supportive into 2024
    As we head into 2024, the macro backdrop for the yellow metal may turn for the better as Fed’s rhetoric continues to head in a less hawkish direction, while the narrative for rate outlook has taken on a different course from this year. Following the Fed’s most aggressive series of rate hikes in 40 years, markets are now looking for 125 basis point (bp) worth of rate cuts through 2024, with firm belief that we have already seen the peak in the Fed’s hiking cycle.
    Thus far, moderating inflation in the US and the sharp dip in the US economic surprise index to its six-month low have been supportive of such dovish pricing, with the trend of softer economic conditions likely to persist into next year as a reaction to tight monetary policies. Rising economic risks will remain a key theme in 2024, with any renewed recession calls potentially supportive of the safe-haven gold due to its historical track record of delivering positive returns in six out of the past eight recessions. Any failure for the US dollar to reclaim its 200-day moving average (MA) ahead may also be supportive of the yellow metal, based on their general inverse relationship.
     
    Source: Refinitiv  
    Still-neutral broad positioning may allow room for catch-up buying
    Commodity Futures Trading Commission (CFTC) data revealed that money managers have increased their net-long positioning in gold to its highest level since May 2023 (144,410 lots as of 28 November 2023), but remained a fair distance away from its peak positioning in 2016 and 2019 (~280,000 lots).
    Despite the resilient performance in gold prices, exchange-traded funds (ETFs) backed by physical gold have instead witnessed five straight months of outflows in October 2023. The still-subdued appetite for gold may potentially offer room for some catch-up buying if the yellow metal were to gain traction on further rate-cut talks, which may help to provide some support for prices.
    Technical analysis: Break above ranging pattern to remain on watch into 2024
    Gold prices have been trading on a broad consolidation pattern since June 2020, with recent attempt for an upward break of the upper resistance range eventually failing to sustain into the close. While this suggests that the bears are not ready to give up on defending the key resistance at the US$2,074 level just yet, any further retest of the US$2,074 will remain on watch into next year as the general trend remains upward bias.
    For now, its weekly relative strength index (RSI) continues to hang above the key 50 level as a sign of bullish momentum in place, while its weekly moving average convergence/divergence (MACD) has also defended its zero-line lately. On the downside, the psychological US$2,000 level will serve as immediate support to hold, followed by the US$1,950, where its 200-day MA may stand.
     
    Source: IG charts
      IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

    The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

    No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
    Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
  7. MongiIG
    Rolls-Royce, Diageo, Halfords, Deliveroo and On The Beach could be the five best UK stocks to watch next month. These shares have been selected for recent market news.
    Source: Bloomberg   Indices Shares FTSE 100 Diageo Stock United Kingdom
     Charles Archer | Financial Writer, London As the UK gears up for Christmas — and traders pin their hopes on the semi-mythical Santa rally — it’s time to take a look at what could be some of the best shares to watch at the start of the new year.
    For context, the base rate could now have peaked at 5.25%, but is expected to remain relatively elevated for some time. CPI inflation may be heading in the right direction, but at 4.6%, the crucial measure remains more than double the official Bank of England target. And 2024 will likely be an election year, with all that entails for the investing environment.
    But many of the best UK shares may remain undervalued — for example, mid cap chocolatier Hotel Chocolat was bought out in November by Mars at a huge premium, for £534 million. Several analysts have leapt on the deal as symbolic of wider UK corporate under valuations — however, picking stocks ripe for a buyout has always been more of an art than a science.
    On the blue-chip end, the FTSE 100 is currently slightly down for the year, though investors will be up overall due to the dividends. Given the S&P 500’s 19.5% increase over 2023 thus far, this could well be called an underperformance — but it’s worth noting that 2022 saw the US index fall into a bear market while the FTSE increased slightly.
    Past performance is not an indicator of future returns.
    Best UK shares to watch
    1. Rolls-Royce
    Rolls-Royce (LON: RR) shares have been one of the top performers of 2023, rising by 189% year-to-date. The engineer unveiled plans at its Capital Markets Day to quadruple operating profit over the next four years — and managed to convince JP Morgan analysts to upgrade their ‘neutral’ rating to ‘overweight,’ hiking their price target from 235p to 400p.
    Analyst David Perry argues that a higher percentage of Roll’s long-term service agreements (LTSAs) will convert into cash than previously assumed due to ‘radical moves’ enacted by CEO Tufan Erginbilgic who joined the FTSE 100 business in January 2023 with a promise to transform the company.
    Rolls also has further catalysts to consider in 2024, including further small modular nuclear reactor developments, and further possible recoveries in the civil aviation and defence divisions.
    2. Diageo
    Diageo (LON: DGE) shares fell sharply after recent results saw weaker performance in the key Caribbean and Latin American markets — with operating income now only expected to grow by between 5% and 7% compared to between 6% and 9% previously.
    With the stock down by 27% over the past year, value investors may feel there is an opportunity. The FTSE 100 company controls a valuable, premium brand portfolio including Johnnie Walker and Dom Perignon, and boasts a relatively strong track record over the past two decades.
    CEO Debra Crew has also blamed wider macroeconomic issues, including a weaker global economy and diminished consumer confidence — which has seen customers downgrade to cheaper drink offerings. But no downturn lasts forever, and Christmas is traditionally a time for more luxury purchases.
    3. Halfords
    Halfords (LON: HFD) shares also plunged in late November after issuing tightened guidance to the lower end of previous expectations — it now expects FY24 underlying pre-tax profits to come in at between £48 million and £53 million, down from £48 million to £58 million.
    The company attributed this to weaker demand for discretionary expensive purchases, but also noted that needs based and B2B sales displayed strong growth. And despite the ‘challenging macro environment,’ the retailer still saw revenue in the 26 weeks to 29 September rise by 13.9% to £873.5 million. Further, it remains confident in its mid-term target of £90 million to £110 million underlying pre-tax profit.
    Like Diageo, Halfords stock may rise sharply when the recovery arrives.
    4. Deliveroo
    Deliveroo (LON: ROO) shares are up 53% year-to-date and could have further to go after CEO and founder Will Shu announced that the company plans to expand its offering to non-food retail at its first Capital Markets Day. This will include florists, pharmacies, and electronics.
    Management plans to achieve growth in the ‘mid-teens’ in the medium term, and an adjusted earnings margin of over 4% as soon as 2026.
    While some non-food retailers are already on the app, Jefferies analysts rate the stock as a ‘buy’ with a 145.3p price target — arguing that ‘the guidance for medium-term GTV growth has finally been updated to reflect this higher cost of capital environment; despite the lower headline numbers, it still represents material upwards pressure to current consensus growth expectations.’
    Of course, Deliveroo operates in a fiercely competitive market.
    5. On The Beach Group
    On the Beach (LON: OTB) has just reported record trading for its 2023 financial year, including record Group Total Transaction Value, as trading resumed normal patterns after pandemic-era disruption.
    Group revenue rose from £143 million in the last financial year to £170 million in 2023, while passenger numbers rose by 13% in summer 2023 compared to summer 2022.
    It seems strategic investments during the weaker period of trading are paying off, including substantial redevelopment of its website and the launch of a new mobile app. Further, winter bookings are up by 34% — and the company plans to reinstate its dividend during FY24.
    Of course, oil remains elevated as do wider geopolitical tensions. But pent-up travel demand appears far from spent.

        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.
  8. MongiIG
    Nasdaq 100 edged up on falling US yields; gold dipped despite rate pullback. Attention now turns to US nonfarm payrolls.
      Source: Bloomberg
      Forex Indices Commodities Gold Nasdaq United States
     Diego Colman | Market Analyst, New York | Publication date: Wednesday 06 December 2023 05:52 The Nasdaq 100 rebounded modestly on Tuesday following a subdued performance at the start of the week, supported by a significant drop in US treasury yields in the wake of unfavorable economic data. When it was all said and done, the equity index climbed 0.25%, settling above the 15,900 mark and approaching its 2023 highs.
    To provide background information, bond rates fell across the board after October's US job openings figures, reported in the JOLTS survey, surprised to the downside by a wide margin. The disappointing results raised fears that the once indestructible labor market is beginning to crumble under the weight of aggressive monetary policy, which, in turn, boosted Fed easing wagers for 2024.
    US JOLTS chart
      Source: DailyFX
    Gold struggles, Nasdaq cautious: eyes on key US employment numbers
    Although the pullback in yields benefited the tech index, gold struggled to leverage the situation, with prices falling for the second day in a row. While the precious metal maintains a constructive outlook, bulls are not yet ready to re-engage long positions after getting caught on the wrong side of the trade on Monday, when the Asian session’s breakout quickly transformed into a large sell-off.
    Looking ahead, we may see measured moves in gold and the Nasdaq 100 over the next couple of days as investors avoid making large directional bets ahead of the release of the November US employment numbers on Friday. The upcoming jobs report will provide valuable insight into the health of the economy and, therefore, may help guide the Fed's next steps.
    Nasdaq 100 technical analysis
    The Nasdaq 100 dropped sharply on Monday but selling pressure abated when the tech index failed to break below support at 15,700. From those levels, prices have mounted a moderate rebound, consolidating above the 15,900 mark. If gains accelerate in the coming days, resistance is visible in the 16,080 to 16,200 band. On continued strength, the focus shifts to the all-time high near 16,800.
    Conversely, if sentiment swings back in favor of sellers and prices head south, the first important floor to watch is located around 15,700. Although this region might provide stability on a retracement, a breakdown could set the stage for a drop toward trendline support at 15,500. Moving lower, the next downside target would be the 100-day simple moving average.
    Nasdaq 100 technical chart
      Source: TradingView
    Gold prices technical analysis
    Gold surpassed its previous record, and briefly hit a fresh all-time high on Monday, but was quickly slammed lower, signaling that the long-awaited bullish breakout was nothing more than a fakeout.
    Although the bulls may have thrown in the towel for now, bullion retains a constructive technical outlook. This means that the path of least resistance remains to the upside. That said, if the precious metal resumes its advance, the first barrier to watch looms at $2,050, and $2,070/$2,075 thereafter. Beyond this zone, attention turns to $2,150.
    On the flip side, if losses intensify in the near term, initial support is positioned around $2,010. This area could act as a floor in case of additional losses, but a drop below it may be a signal that a deeper pullback is in gestation, with the next downside target situated near $1,990.
    Gold price technical chart
      Source: TradingView
     

       
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  9. MongiIG

    Best shares to watch in December 2023

    By MongiIG,


    Market News
    What are the best stocks to watch in December 2023?
    Source: Bloomberg   Shares United Kingdom Tesla, Inc. United States Economy of the United Kingdom Interest  
    Piper Terrett | Financial writer, London While the UK economy has avoided a recession this year and interest rate hikes have eased, it isn’t all plane sailing. Recent research from Paris-based organisation the OECD warns that central banks in the UK and Europe will have to keep interest rates high next year to avoid entering a recession. It said it expects the European Central Bank and the Bank of England to hold rates at their current highs until 2025 because of inflationary pressure – much longer than financial markets have priced in, according to the Financial Times.
    The picture painted also looks gloomier than that in the US, where the US Federal Reserve is expected to cut interest rates in the second half of 2024. The OECD forecasts the UK economy to grow by 0.7% next year and 1.2% in 2025, while the US is expected to grow by 1.5% next year and by 1.7% in 2025.
    With the UK economy continuing to look sluggish, what are the best stocks to watch in December 2023? We think these shares could be worth a second look.
    Serco – benefiting from outsourcing trends
    With large corporates and governments busy trying to cut costs as the tough economic times continue, outsourcers should continue to benefit. Serco could be one such beneficiary. The company works with governments around the world to deliver public services, such as running prisons, defence services and international immigration services. It also has a stake in the space sector.
    At the half-year results in August the company reported a 13% increase in revenues to £2.5 billion, including 6% organic growth, and upgraded its cash generation forecast for the full year. Half-year cash flow came in at £98 million. Meanwhile, Serco posted a 14% increase in underlying profits to £148 million. The company also recently completed its £90 million share buyback programme.
    While it may not be popular, Serco also looks set to benefit from rising immigration as it provides immigration services on an international basis. It houses asylum seekers and provides ‘citizen services’, such as helping jobseekers in Ontario find work.
    The shares are down 7% over the past 12 months to 158p – some way off their three-year highs of 190p and are worth keeping an eye on. Analysts at broker Royal Bank of Canada currently have a price target of 190p on the stock.
    Source: Bloomberg AstraZeneca – a safe port in the storm
    AstraZeneca recently reported solid third quarter results and the drug giant is recovering well following the collapse of sales of its Covid testing products. Third quarter sales rose by 5% to $11 billion, while operating profits improved by 4% to $2 billion during the period. Sales from the company’s portfolio of cancer drugs also increased by 20%, while revenues from products for rare diseases were up by 12%.
    The drug giant also has a possible blockbuster in its – albeit, early stage – product pipeline; an obesity drug which works in a similar way to Novo Nordisk’s product Wevgovy. Wevgovy delivered $1.4 billion in sales between July and September this year alone. Recent early stage results from AstraZeneca’s drug have showed it is well tolerated by patients and has helped them lose weight. If successful, it is expected to be used in combination with other therapies, which could also boost sales.
    The pharmaceutical sector tends to remain a solid bet in tough times because patients will always need medicines, regardless of what the economy holds. The shares have fallen 7% this year to £101.80 and are worth watching, given they are trading below their three-year highs. Analysts at broker Barclays currently have a buy recommendation and a price target on the stock of £135.
    British American Tobacco – attractive to income seekers
    Another industry that is traditionally considered a good option in tough times is the tobacco sector. While not popular with everyone, its sales tend to be reliable, given that customers will continue to purchase its products regardless of the state of the economy. British American Tobacco tends to throw off a lot of cash and return money to shareholders on a regular basis. It is also busy getting its vaping business off the ground and this is now beginning to break-even on it.
    BATs is due to publish its pre-close trading update on Wednesday 6 December. The shares are down 26% this year to 2,512p and trade on a price earnings ratio of just 6.4%. They are worth keeping an eye on, especially given their healthy dividend yield of 9%.
    Tesla – further upside?
    Tesla shares have come back some way since sliding earlier this year, and are up 23% to $240. However, shares in the electric car manufacturer led by Elon Musk have not rebounded as strongly from the tech slump as other tech stocks, such as Alphabet, Amazon and Apple. However, there could still be some upside in the shares, which, while highly rated, are still trading some way off their three-year highs of $414.50.
    Growth in the electric car market continues and the company’s gigafactories in Europe mean that Teslas are now a common sight in the UK and mainland Europe. The company remains on target to produce 1.8 million cars this year and recently debuted its Cybertruck at an event in Austin, Texas.
    However, a labour dispute with Swedish Tesla workers and Musk’s activities at Twitter are weighing on the shares. Analysts at broker Wedbush have an outperform rating on the stock and think they could reach $310. Nevertheless, other brokers are more pessimistic, with analysts at Jefferies lowering their target to $210 with a hold rating.
    Burberry – recovery play?
    A riskier option, which could be worth watching over time, is the luxury retailer Burberry, which is facing tough times. The shares have slumped by 27% this year and dipped 9% earlier this month after the company warned that it may miss its revenue targets for the year. High end clients are feeling the pinch of the cost of living crisis, and other luxury goods brands, such as Gucci and LVMH, have reported similar issues.
    There is no rush to buy the shares as things may get worse before they get better. However, they could offer interest as a possible long-term recovery play or even perhaps as a takeover target.
    Past performance is not a guide to future performance

      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.
  10. MongiIG
    easyJet shares may have risen sharply in 2023, but they remain far from their pre-pandemic value. Could further rises be in store in 2024?
    Source: Bloomberg   Indices Shares EasyJet Airline Tax Share  
     Charles Archer | Financial Writer, London | Publication date: Monday 04 December 2023 14:39 easyJet (LON: EZJ) shares have risen by 43% year-to-date, but this overall performance masks a more volatile reality. The FTSE 250 airline stock started the year out at 330p, increased to 515p by late January and then fell to as low as 360p during October.
    Shares were changing hands for 405p during pre-market trading on results day — 28 November — and have since shot up to 470p. And investors might be hoping that a Santa rally could see a return to the year’s high of 528p.
    easyJet share price: full-year results
    easyJet enjoyed a record H2 2023 financial performance and maintains a ‘positive outlook’ for FY 2024. Despite the challenging external macroeconomic environment, the airline saw FY23 headline profit before tax of £455 million — a £633 million year-on-year improvement and in line with prior guidance.
    And most encouragingly, easyJet holidays soared by a whopping 221%, delivering £122 million in profit before tax. Total revenue increased by 42% to £8.17 billion, predominantly due to pricing power, increased capacity, improved load factors and the aforementioned growth of easyJet holidays.
    Capacity rose by 14% year-on-year to 92.6 million seats, with passenger numbers up by 19% to 82.8 million people. However, headline costs also rose by 30% to £7.72 billion, driven by increased volumes, higher fuel costs and generic inflationary pressures.
    But the FTSE 250 company remains financially resilient — with £41 million in net cash and £4.7 billion in liquidity. And the company also holds resilient BBB/Baa3 credit ratings.
    Accordingly, easyJet remains on track to restart dividends, with 4.5p per share — or £34 million — to be paid out in early 2024. And it even expects this payout to ‘increase to 20% of headline PAT on FY24's result’ with the ‘potential to increase level of future returns to be assessed over the coming years.’
    CEO Johan Lundgren enthuses that the ‘record summer performance demonstrates the success of our strategy and that demand for easyJet remains strong…we see a positive outlook for this year with airline and holidays bookings both ahead year on year and recent consumer research highlights that around three quarters of Britons plan to spend more on their holidays versus last year with travel continuing to be the top priority for household discretionary spending.’
    Where next for easyJet shares?
    The FTSE 250’s medium-term targets is to achieve a group profit before tax per seat of between £7 and £10 — by reducing winter losses, growing easyJet holidays to £250 million of profit before tax and through cost savings from its Airbus order book that could deliver fleet efficiency and upguaging (an industry term for increasing capacity by adding seats or replacing smaller planes with larger ones).
    The ambition is to deliver more than £1 billion of profit before tax.
    Lundgren remains ‘confident about the future and the opportunity ahead, focusing on capital discipline and driving our low cost model to achieve our ambitious medium term targets’ — and on the earnings call made clear he feels that strong travel demand will continue into next summer. Encouragingly, the airline has hedged 76% of its jet fuel requirements for H1 2024.
    Financially, the company remains ‘on track’ to deliver growth of circa 9% in FY24. The current financial year has started positively, with early bookings ahead in Q2 compared to last year — but the airline is being impacted by reduced or even paused flights to various countries in the middle east, meaning it doesn’t expect its Q1 loss to improve year-on-year.
    Longer-term, easyJet has a balancing act to conduct. It’s promising significant fleet expansion and upgrading, alongside dividends — in a time where oil remains elevated and may continue to stay high. This may be difficult to pull off in an increasingly tight monetary environment.
    But the FTSE 250 stock remains far below its pre-pandemic price point, and long-term investors may see further gains through FY24.

       
    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.
  11. MongiIG

    Best AI stocks to watch in December 2023

    By MongiIG,


    Market News
    Microsoft, Alphabet, Nvidia, Tesla and IBM could be the five best AI stocks to watch next month. These stocks are the five largest AI companies listed in the US.
    Source: Bloomberg   Shares Artificial intelligence ChatGPT Nvidia Google Microsoft  
     Charles Archer | Financial Writer, London Artificial Intelligence (AI) has been the investing theme of 2023. The tech world has seemingly had enough of disruptive tech, cryptocurrency, Web3, Blockchain, and the Metaverse — and is ready to set its hopes on the next big thing.
    While these former concepts may be on the backburner as the days of ultraloose monetary policy have ended, AI is becoming the clear driving force for big tech. Indeed, almost all of the S&P 500’s gains in 2023 have come from just seven companies, all of whom are potentially riding the AI wave to some degree.
    There may be a difference between AI and the rest though. Artificial Intelligence is already in use across a wide variety of real-world applications, including in entertainment, social media, art, retail, security, sport analytics, manufacturing, self-driving cars, healthcare, and warehousing alongside dozens of other sectors.
    Every Netflix recommendation, every supermarket rewards purchase, and every football match is analysed ever more relentlessly in order to provide more and better data. And while consumers have always understood — even peripherally — that AI was taking over more and more of the heavy lifting; the sector’s investment catalyst has finally arrived.
    This catalyst is of course ChatGPT, the OpenAI-developed chatbot which garnered over 1 million users in just five days. It took Facebook 10 months, and Netflix three and a half years to hit the same milestone.
    Taking the world by storm, it now boasts over 100 million users, and investors are now considering whether the innovation could make entire careers in areas such as copywriting, accounting, personal training, and even software development entirely redundant. Of course, OpenAI’s board has recently gone through some turmoil — with many analysts suspecting differences of ethics as models become ever more powerful.
    From an investment perspective, interest rates are relatively high, and quantitative easing appears all but over for the foreseeable future. AI development is exceptionally expensive, and for every ChatGPT breakthrough, there are hundreds of costly failures.
    Therefore, the best AI stocks could be predominantly the larger blue chips — which also helps to diversify any investment in the event that their AI projects fail. However, it’s also worth noting that some commentators consider the large US stocks are inside an AI bubble that will eventually pop.
    And remember, past performance is not an indicator of future returns. While the following are the largest AI-focused companies stateside, Apple and several others are excluded because analysts disagree on whether they qualify as AI companies.
    Best AI stocks to watch
    1. Microsoft
    Microsoft is the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch. The company already had a strong relationship with OpenAI prior to the ChatGPT launch and has invested $13 billion into the company since 2019.
    This remains a symbiotic relationship — Microsoft is allowing OpenAI access to its cloud centres to increase ChatGPT’s computing power, while native search engine Bing has incorporated the chatbot into its functions in an attempt to steal Google’s overwhelmingly dominant market share.
    With OpenAI still reportedly planning a $86 billion IPO after the return of CEO Sam Altman, Microsoft could also soon see a direct return on its investment.
    Market Capitalisation: $2.84 trillion
    2. Alphabet
    Google parent Alphabet Inc may control 84% of the global search market share — but Yahoo was once king of search too. While Alphabet laid off thousands of employees in 2023, it’s launched its own rival chatbot — Bard — only to generate an embarrassing mistake at launch.
    Bard runs on Google’s LaMDA programming, which has been in development since 2021. While there have been accusations of rushing Bard out to compete with ChatGPT, the titan should soon smooth out the issues.
    It’s worth noting that AI is already used across many of Google’s current functions. And it’s got at least two more AI-focused projects; its coding-focused Generative Language API, and DeepMind which it acquired in 2014.
    Market Capitalisation: $1.72 trillion
    3. Nvidia
    Nvidia is well-known as one of the world’s most valuable chipmakers, used in electronics ranging from smartphones, to cars, to high-end computing. Nvidia shares have risen by 235% year-to-date to $480, leaving the company with a sky-high price-to-equity ratio of 63 — and yet recent quarterly earnings saw yet another beat.
    And Nvidia’s most advanced deep learning chips might mean that the NASDAQ company is still undervalued. They’re already in use at clients such as Alphabet and Facebook owner Meta to power both internal and user facing AI applications.
    As AI becomes ever more mainstream, demand for these chips is surging, and importantly, there is a high economic barrier to entry — Nvidia has a wide economic moat surrounding its market position as the ‘bricks and mortar’ AI choice. Indeed, its chips are so advanced that they are subject to export controls in some instances from the US.
    Market Capitalisation: $1.19 trillion
    4. Tesla
    Tesla is the original EV trailblazer, and despite the legal and media troubles of CEO Elon Musk, its advancements in artificial intelligence could see the auto company rise once again to the giddy highs of late 2021.
    Indeed, its share price has already recovered by 124% year-to-date as it eyes possible expansions in India and Europe — though the recent catalyst is the Cybertruck launch, which could drive significant further growth through 2024.
    Fully autonomous driving is the long-term goal, with the company planning to launch a robot taxi service soon. It’s also developing Optimus — a humanoid robot which Musk thinks could become more valuable than Tesla’s auto operations in time. However, economic slowdown in China could cause short-term profitability issues this year.
    Market Capitalisation: $758 billion
    5. IBM
    IBM specialises in both hardware and software, providing AI-based services ranging from mainframe computing to nanotechnology. It’s also the largest industrial research firm in the world with 19 facilities — generating the most annual US patents every year between 1993 and 2021.
    The company recently completed the installation of a 127-qubit quantum computing system at the University of Tokyo — the first ‘utility-scale’ quantum system in the region. And German biotech giant Boehringer Ingelheim has announced that it will harness IBM AI technology to supercharge its drug discovery efforts.
    Further applications could be in the offing.
    Market Capitalisation: $142 billion
     
     
     
     
    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.
  12. MongiIG
    By the end of November, the price of the yellow metal had increased by more than 10% year-to-date, as market participants anticipate that the current tightening cycle might be approaching its conclusion.
    Source: Bloomberg   Forex Commodities Gold Price Option ETF
    Hebe Chen | Market Analyst, Melbourne | Publication date: Thursday 30 November 2023 10:42 Why invest in gold?
    Gold has long held a unique status as a powerful tool for preserving value, gradually ingraining its perceived worth in society over thousands of years. In ancient times, precious metals served as a universally recognized unit of exchange, forming the basis for the world's initial currencies for centuries.
    Up until 1971, the US dollar was tied to the value of gold, and with most currencies hitched to the dollar, essentially gold played a pivotal role as the cornerstone of the global forex market.
    Today, gold is still the go-to 'safe haven' for investors, preserving its value when other assets hit roadblocks. Beyond that, central banks are hoarding gold reserves, recognizing its global value to be wielded in times of crucial need.
    Who is the main gold producer and buyer in the world?
    In the past, countries such as South Africa were renowned for hosting some of the world's largest gold reserves. However, over the years, nations like China, Russia, Australia, and the United States have surpassed them in this regard.
    China, the leading global gold producer, contributes to 11% of the world's total production. Meanwhile, China is also the largest purchaser of gold. Gold reserves in China have averaged 1161.79 Tonnes from 2000 until 2023, reaching a record high of 2191.53 Tonnes in the third quarter of 2023.
     
    Source: World Gold Council The different ways to invest in gold markets
    There are various options to invest in gold markets, including spot gold, gold futures, gold options and gold stocks.
    •Spot gold: Spot gold involves the immediate purchase or sale of the precious metal, with the exchange occurring at the precise moment the trade is settled, or ‘on the spot’ price. When engaging in spot gold trading, investors transact buying and selling at the current market rate, commonly referred to as the spot price.
    •Gold futures: Futures contracts allow investors to trade gold at a predetermined price on a future date. These contracts are standardized in terms of quantity and quality, with only their price influenced by market forces.
    •Gold options: Options contracts operate similarly to futures, but there is no obligation to execute the trade upon purchase. Options grant investors the right to exchange gold at a predetermined price on a specified date.
    •Gold ETFs: Exchange-traded funds (ETFs) can help investors track the performance of shares in a collection of publicly traded gold mining, refining, and production companies. Engaging in ETF trading extends investors' exposure and hence helps to diversify their portfolios.
    •Gold stocks: Trading gold stocks is another way to invest in gold. This will enable investors to diversify their portfolio within the gold industry, going long or short on companies involved in mining and production of gold.
    How will the precious metal perform in 2024?
    Gold prices stayed resilient for most of 2023, reaching a two-year high above $2050 in May. By the end of November, the price of the yellow metal had increased by more than 10% year-to-date, as market participants anticipate that the current tightening cycle might be approaching its conclusion. The escalating demand for a safe-haven refuge was further fuelled by ongoing geopolitical tensions in both the Middle East and Ukraine.
    By the end of November, Gold prices have posted an impressive 10% gain in the fourth quarter, surpassing the key $2000 per ounce level. The precious metal has been trading within an ascending wedge since June 2022. This pattern could propel the price towards the May high above $2075should the momentum continues. On the other hand, the level at $1998 would act as a crucial support level if the price of the shining metal pulls back.
    Looking forward, the outlook for gold in 2024 is expected to remain positive, as the factors driving the growing appetite for the precious metal seem to stay intact. Furthermore, as gold is often seen as a reliable means of safeguarding wealth during challenging economic periods, the widely projected economic slowdown in 2024 should serveas an additional catalyst for gold to preserve its prime.

       
    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.
  13. MongiIG
    Explaining the significance of semiconductor companies, and a rundown of some of the best semiconductor stocks to watch. These are the five largest semiconductor stocks in the world by market capitalisation.
    Source: Bloomberg   Shares Semiconductor Integrated circuit ASML Holding Nvidia Artificial intelligence  
     Charles Archer | Financial Writer, London Semiconductor companies are those involved in the design, manufacturing, and distribution of semiconductor devices and related technology.
    Semiconductors — or microchips — are essential to the functioning of electronic devices and have seen particular investor interest in 2023 given the rise of the AI sector. Without semiconductors, there would be no computers, smartphones, gaming, or a hundred other applications, all of which are essential to 21st century living.
    OpenAI’s revolutionary ChatGPT chatbot, the growing political importance of AI development, and Nvidia’s dizzying rally are all testament to the importance of the sector. With significant growth in AI interest expected through the next decade and beyond, investing in semiconductor stocks within a diversified portfolio could be an attractive proposition.
    For context, giants including Intel and ASML consider that annual global spending on semiconductors will rise to $1 trillion by 2030, up from just $570 billion in 2022.
    It’s also worth noting that China and the US are both attempting to harm each other’s ability to use advanced semiconductors to develop AI technology; the US through export bans of certain semiconductors and China through export bans of certain critical minerals.
    Finally, while the five stocks listed below are considered to be the largest in the world by market capitaliaton right now, analysts disagree on what exactly constitutes a semiconductor stock, and further, these may not be the best value opportunities. And remember, past performance is not an indicator of future returns.
    Best semiconductor stocks to watch
    Before delving into some of the most popular individual semiconductor shares, it’s worth highlighting that there are many popular, diversified ETFs which offer exposure into multiple companies on a low cost basis.
    For example, the Vaneck Semiconductor UCITS ETF holds 25 of the world’s largest semiconductor companies and is a common choice for investors who want broad exposure to the sector without the need to conduct additional research.
    1. Nvidia
    Nvidia shares have been on a dizzying rally this year to a $1.2 trillion valuation. The microchip behemoth is arguably the most popular semiconductor stock of 2023 — though of course, popularity does not mean it is the best investment available.
    Q3 results were remarkable; revenue came in at $18.12 billion compared to the LSEG analyst consensus of $16.18 billion, a rise of 206% year-over-year. The al-important data-centre revenue rose by a whopping 279% to $15.51 billion — with half of this cash coming from cloud infrastructure providers including Amazon.
    And Nvidia also expects to generate 231% revenue growth in Q4 — equivalent to $20 billion. On the other hand, it has a huge price-to-earnings ratio, alongside significant exposure to a faltering Chinese economy and rising Sino-US export tensions.
    2. Taiwan Semiconductor Manufacturing Co
    While Nvidia is touted as the ‘picks and shovels’ semiconductor stock for 2023, this crown could arguably belong to TSMC. Most chip producers — including Nvidia — outsource actual production to the Taiwanese company, with the country responsible for making circa 90% of the world’s most advanced chips.
    TSMC shares have done well in 2023 given the AI-driven demand, its colossal manufacturing capacity and the wide economic moat surrounding starting up any sizeable competitor.
    However, Taiwan’s complex political status, including its relationship with China remains a long-term
    risk.
    3. Broadcom
    Broadcom may not be the most fashionable name in the semiconductor world, but the company’s designs and manufacturing acumen underpins masses of data centre, networking, software, broadband, wireless, storage, and industrial markets.
    In Q3 results, the company saw revenue rise by 5% year-over-year to $8.88 billion, and it issued Q4 guidance for a 4% year-over-year increase to $9.27 billion. CEO Hock Tan enthused that the results were ‘driven by demand for next generation networking technologies as hyperscale customers scale out and network their AI clusters within data centers.’
    With Broadcom shares up 71% year-to-date, further growth in 2024 seems possible.
    4. Samsung
    Samsung is a South Korean titan that is well-known as one of the world’s largest producers of electronic devices — ranging from appliances to digital media devices, semiconductors, memory chips, and integrated systems.
    Recent results saw titan’s total consolidated revenue rise by 12% to KRW67.4 trillion, driven by new smartphone releases and higher sales of premium display products.
    Operating profit rose to KRW2.43 trillion, based on strong sales of flagship mobile phone models and strong demand for displays. Samsung also signed a supply deal with Nvidia in September, and further collaboration remains a key opportunity in the new year.
    5. ASML
    ASML is a world leader in chip-making equipment. It’s a common misconception that the company actually makes semiconductors; it does not. It designs and manufactures the lithography machines that are an essential component in microchip manufacture and is therefore indispensable within the wider supply chain.
    You could argue that ASML is an even more crucial to the manufacturing line than TSMC, but the stock has only risen by a comparatively smaller 23% year-to-date.

    In recent Q2 results, Q2 net sales came in at €6.9 billion, with a gross margin of 51.3% and net income of €1.9 billion. And it expects Q3 2023 net sales to be between €6.5 billion and €7.0 billion alongside a gross margin of around 50%.
    ASML shares have risen by 23% year-to-date yet remains some distance from previous highs — leaving possible room for further rises in 2024.

        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.
  14. MongiIG
    Fundamental and technical outlook on the Rolls-Royce share price.
    Source: Bloomberg   Shares Price Roll-Royce Candlestick Share price Income  Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 29 November 2023 13:09 Rolls-Royce surges to a three year high on ambitious plans
    Engineer Rolls-Royce has already seen its shares surge 80% this year, but the firm’s plans for the future could provide further upside impetus.
    Rolls-Royce, the renowned British engineering company, has reached a new three-year high following its recent update. The firm has outlined its plans to enhance operating profit and margins, aiming to fortify its position as a stronger and more resilient entity. This strategic move is undoubtedly attracting attention from investors who value stability and growth.
    One notable aspect of Rolls-Royce's recovery is the steady rebound of its total revenues from the adverse effects of the pandemic. As the global economy gradually recovers, the company's financials are reflecting this positive trend. This is a testament to the resilience and adaptability of the firm, as it navigates the challenges posed by the ongoing crisis.
    Furthermore, income investors are eagerly awaiting the return of dividends from Rolls-Royce, which is expected to occur next year. The prospect of receiving a share of the company's profits is undoubtedly enticing for those seeking a reliable income stream. This development not only signals the company's confidence in its future prospects but also serves as a positive signal for the broader market.
    Investors have certainly shown optimism in the past six months, driving up the stock of Rolls-Royce by 80 percent. This surge has been driven by hopes the management team can hit their ambitious targets.
    However, despite this impressive rally, Rolls-Royce still lags behind its rival Safran in terms of valuation. The market currently values Rolls-Royce at a one-quarter discount to Safran based on projected earnings for the year 2025. This discrepancy suggests that investors are not fully convinced that Rolls-Royce will be able to deliver on its targets and close the gap with its competitor, though if it can make progress the shares could make further strides higher.
    Analyst ratings for Rolls-Royce
    Refinitiv data shows a consensus analyst rating of ‘buy’ for Rolls-Royce – 4 strong buy, 6 buy and 8 hold - with the mean of estimates suggesting a long-term price target of 255.76 pence for the share, 2% below where it is trading at the moment (29 November 2023).
    Source: Refinitiv Technical outlook on the Rolls-Royce’s share price
    The Rolls-Royce share price is on track to reach the 61.8% Fibonacci retracement of the 2014-to-2020 decline at 287.6p, above which lies the July 2016 peak at 300.4p.
    Rolls-Royce Monthly Candlestick Chart
    Source: TradingView The acceleration to the upside seen since Tuesday in an already steep uptrend points to further upside being seen in the near future as momentum usually takes a while to fade.
    While last week’s reaction low at 234.5p underpins on a daily chart closing basis, the short-term uptrend will remain intact. The longer-term uptrend will stay valid as long as the Rolls-Royce share price trades above its 196.45p late-October low.
    Rolls-Royce Daily Candlestick Chart
    Source: TradingView
       
    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.
  15. MongiIG
    Fundamental and technical outlook on the easyJet share price ahead of Tuesday’s full-year earnings.
    Source: Bloomberg   Shares EasyJet Price Airline Ryanair Price–earnings ratio
     Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 27 November 2023 17:42 What to expect from easyJet’s full-year earnings
    The recent financial performance of easyJet has been a mixed bag. While the airline reported a "record summer" and forecasted a strong pre-tax profit for fourth quarter (Q4), the full-year profit outlook fell short of expectations. Factors such as strike actions and increased competition have contributed to this disparity. Additionally, rising global fuel prices, triggered by the Hamas attack in October, have negatively impacted passenger numbers.
    However, there are signs of improvement in the industry. Ryanair, one of easyJet's major competitors, has forecasted a record annual profit, citing a significant increase in airfares during the warmer months. This positive outlook for Ryanair reflects an overall recovery in the air travel sector.
    On Tuesday, easyJet will confirm its annual profit before tax within the previously provided range. This announcement will be crucial for shareholders, as the airline's board has committed to distributing 10% of profits after tax to them. However, analysts and investors will likely be more interested in easyJet's forecasts for 2024, considering the impact of rising fuel prices and the war in Palestine on the airline's performance and demand for winter sun destinations.
    EasyJet's hedging strategy will also play a vital role in navigating the challenges posed by rising fuel prices. The company has already secured hedging for a significant portion of its fuel needs for the first and second halves of fiscal year 2024.
    The recovery of easyJet is a complex endeavour, given the fierce competition in the short-haul market and the difficulty of passing on rising costs to passengers. However, the airline's management has been proactive in maintaining a competitive edge. Strategic moves, such as upgrading the fleet through a substantial Airbus order and expanding the easyJet holidays operation, demonstrate their commitment to success.
    It is worth noting, though, that easyJet has posted three consecutive years of losses, although these losses have been narrowing from £1.03bn in 2021 to £208m in 2022. The company's anticipated pre-tax profits of between £440m and £460m for the current year mark another step in the right direction. From a valuation perspective, easyJet's shares appear to be good value, with relatively low forward price-to-earnings (P/E) ratios of 8.6 times earnings and 7.2 times for 2024 as well as an expected yield of over 3% for 2024. After all, easyJet was posting steadily rising profits before the pandemic struck.
    Looking at easyJet's competitors, both Ryanair and Wizz Air have reported an increase in passenger numbers, indicating a rebound in air traffic. Ryanair, in particular, has shown resilience in its financial performance and passenger volumes. Its robust traffic growth and improved load factor have contributed to a significant increase in profit after tax.
    easyJet analyst ratings
    Data from Reuters Refinitiv shows that of the 20 analysts who currently cover easyJet, two have a ‘strong buy’, nine a ‘buy’, seven a ‘hold’, one a ‘sell’ and one a ‘strong sell’ rating. The average analyst recommendation thus sits between a ‘buy’ and a ‘hold’ with a mean target price at 639.74 pence, approximately 56% higher than the current price (as of 27 November 2023). 
    Source: Refinitiv easyJet technical analysis
    The easyJet share price, which has risen by around 24% year-to-date, not only greatly outperforms the FTSE 100 but also British Airways’ owner International Consolidated Airlines Group (IAG) and budget airline Wizzair but lags its direct competitor Ryanair with its 40% year-to-date gains.
    Source: Google Analytics When looking at a monthly candlestick chart the easyJet share price is trading around its 2020 pandemic lows but so far remains above its October 2022 decade low at 276.9 pence.
    For a long-term bullish reversal to occur, a rise and ideally a monthly close above the current November peak at 445.6p would need to occur. In this case the 2020-to-2023 downtrend line would be broken through as well with the May peak at 534.8p being back in sight.
    easyJet Monthly Candlestick Chart
    Source: TradingView For the shorter-term October-to-November uptrend to remain valid, the easyJet share price needs to hold above its mid-November low at 390.5p on a daily chart closing basis. Failure there could lead to the October trough at 350.0p being revisited.
    EasyJet Daily Candlestick Chart
    Source: TradingView Immediate resistance between the October and current November highs at 445.6p to 450.7p will need to be overcome, and ideally the August-to-September peaks at 462p to 464.4p for a bullish reversal to become longer-term plausible.

       
    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.
  16. MongiIG

    The Week Ahead On The Markets

    By MongiIG,


    Market News
    The Week Ahead
    Read about upcoming market-moving events and plan your trading week
      Week commencing 27 November
    Axel Rudolph's insight
    This week sees the release of US new and pending home sales, consumer confidence, quarter 3 gross domestic product growth (second estimate), personal income, ISM manufacturing PMI and the Federal Reserve’s (Fed) Beige Book and preferred Personal Consumption Expenditure (PCE) price index. In Europe, German consumer confidence, unemployment and retail sales as well as inflation data will be key and in the Eurozone economic sentiment. Japan industrial production, retail sales, unemployment and consumer confidence will be worth monitoring as will China’s manufacturing data. On the earnings front Topps Tiles, EasyJet, Halfords and Mulberry will report in the UK and HP, Dollar Tree and Dell in the US.
      Economic reports
    Weekly view Monday
    3pm – US new home sales (October): sales rose 12.3% in September. Markets to watch: USD crosses

    Tuesday
    7am – German GfK consumer confidence (December): confidence index expected to rise to -26 from -28.1. Markets to watch: EUR crosses
    3pm – US consumer confidence (November): previous reading 102.6. Markets to watch: USD crosses

    Wednesday
    1pm – Germany inflation (November, preliminary): prices expected to rise 3.7% YoY from 3.8% and 0.1% from 0% MoM. Markets to watch: EUR crosses
    1.30pm – US GDP (Q2, 2nd estimate): expected to be 4.9% QoQ. Markets to watch: USD crosses
    3.30pm – US EIA crude oil inventories (w/e 24 November): stockpiles rose by 8.7 million barrels last week. Markets to watch: Brent, WTI

    Thursday
    1.30am – China PMI (November): manufacturing PMI to rise to 49.9 from 49.5, and non-manufacturing expected to rise to 51.5 from 50.6. Markets to watch: China indices, CNH crosses
    7.45am – French CPI (November): price growth expected to slow to 3.8% from 4%. Markets to watch: EUR crosses
    8.55am – German unemployment rate (November): forecast to hold at 5.8%. Markets to watch: EUR crosses
    10am – eurozone inflation (November): previous reading 2.9%. Markets to watch: EUR crosses
    1.30pm – US initial jobless claims (w/e 25 November), PCE price index: claims to rise by 213K versus 209K previously; PCE price index to rise 0.2% MoM and 3.1% YoY, down from 0.4% and 3.4% respectively. Markets to watch: US indices, USD crosses
    1.30pm – Canada GDP (Q3): expected to be flat quarter-on-quarter. Markets to watch: CAD crosses
    2.45pm – Chicago PMI (November): index to rise to 45. Markets to watch: USD crosses
    3pm – US pending home sales (October): sales rose 1.1% MoM in September. Markets to watch: USD crosses

    Friday
    1.45am – China Caixin manufacturing PMI (November): forecast to rebound into expansion territory, at 50.2, from 49.5. Markets to watch: China indices, CNH crosses
    1.30pm – Canada employment report (November): unemployment rate expected to rise to 5.8%. Markets to watch: CAD crosses
    3pm – US ISM manufacturing PMI (November): previous reading 46.7 Markets to watch: USD crosses
      Company announcements
     
    Monday
    27 November
    Tuesday
    28 November
    Wednesday
    29 November
    Thursday
    30 November
    Friday
    01 December
    Full-year earnings
      Topps Tiles,
    easyjet       Half/ Quarterly earnings
      Pets at home,
    Hewlett Packard,
    Dollar Tree,
    Workday Halfords,
    Pennon,
    Snowflake,
    Foot Locker Dr Martens,
    Mulberry,
    Remy Cointreau,
    Dell,
    Kroger,
    Salesforce   Trading update*
      Safestore        
        Dividends
    FTSE 100: 3i, Severn Trent
    FTSE 250: Hill & Smith, Diversified Energy Co, Bellway, Alliance Trust, AVI Global, Oxford Instruments, Telecom Plus, Johnson Matthey, FirstGroup
    Dividends are applied after the close of the previous day’s session for each market. So, for example, the FTSE 100 goes ex-dividend on a Thursday, but the adjustment is applied at the close of the previous day, e.g. Wednesday. The table below shows the days in which the adjustment is applied, not the ex-dividend days.
    Index adjustments
     
    Monday
    27 November Tuesday
    28 November Wednesday
    29 November Thursday
    30 November Friday
    01 December Monday
    04 December FTSE 100     2.11       Australia 200   0.8 0.9   0.4   Wall Street   36.5 14.0 14.8     US 500 0.02 0.79 1.38 0.39 0.01 0.22 Nasdaq 0.07 1.42 3.99 0.55 0.15 0.39 Netherlands 25             EU Stocks 50         2.0   China H-Shares 0.6   0.5       Singapore Blue Chip             Hong Kong HS50 1.0 1.6 0.9   2.1   South Africa 40   23.0         Italy 40             Japan 225            
  17. MongiIG
    RBA minutes paint a more hawkish outlook as Governor Bullock hints that inflation fight is far from over; AUD/USD eyes retracement after printing higher. What is GBP/AUD’s and Aussie’s outlook?
      Source: Bloomberg
      Forex Shares Inflation Australian dollar AUD/USD GBP/AUD   IG Analyst | Publication date: Thursday 23 November 2023 05:41 Australian dollar fundamental backdrop
    The Reserve Bank of Australia (RBA) recently published the minutes from its latest meeting, during which the central bank implemented a 25 basis points hike. Surprisingly, the Australian dollar experienced a sell-off in the wake of the rate increase, a development that, upon scrutinizing the minutes, proves somewhat unexpected. The disclosed minutes highlighted that the hike aimed to mitigate the risk of a "larger monetary policy response," given the persistently high inflation and robust economy.
    Inflation risks amidst peaks and challenges
    Furthermore, the minutes underscored that inflation risks continue to lean towards the upside, despite recent remarks by RBA Governor Michele Bullock indicating that inflation may have peaked. However, the Governor acknowledged that bringing inflation within the target range will present an ongoing challenge for the economy and could extend over a two-year period.
    This aligns with my consistent belief that inflation seldom recedes sufficiently, with certain items retaining elevated prices while others may become more affordable. I anticipate that some of the recent global inflationary pressures may become entrenched, making the forthcoming months particularly intriguing for central banks.
    Resilient Australian dollar
    Despite the initial sell-off following the rate hike, the Australian dollar has maintained relative strength. I anticipate this trend to persist, as hinted by Governor Bullock, attributing the economy's resilience to robust demand. According to Governor Bullock, the labor market is expected to remain robust, which, in turn, could sustain demand and pose upside risks to inflation.
    Interest rate dynamics: RBA's strategic positioning
    Considering an interest rate comparison, the RBA remains well-positioned to implement another rate hike if deemed necessary. As illustrated in the chart below, the RBA currently enjoys the lowest rates compared to the UK, EU, and the United States.
    RBA's rates compared to the UK, EU, and the United States chart
      Source: TradingView
    We did have some data a short while ago, as well with the release of the Judo Bank Manufacturing and Services PMI Flash numbers. Manufacturing and Services both declined slightly from the October print, but seemed to have little immediate impact on the Australian dollar.
    Economic Calender
      Source: DailyFX
    AUD/USD technical analysis
    AUD/USD has been on an impressive rally since the central bank raised rates; and we had an initial selloff to retest support at the 0.6350 mark. Since then, AUD/USD has exploded, printing a fresh higher and keeping the overall bullish structure going.
    AUD/USD also remains with a long-term descending channel but may find it hard to push on from here without some form of retracement. Resistance has been provided by the 200-day MA at the 0.6600 level. The issue for sellers is that there remains a lot of downside support as well, which could hamper a sustained move lower. It would also appear that a golden cross pattern may be developing as the 20-day MA eyes a cross above the 100-day MA, which would be a nod to potential bullish continuation.
    Personally, I would prefer some form of retracement here before potentially joining the trend, as we have just printed a higher high. I will be keeping a close eye on support at 0.6484, 0.6440 and 0.6400 for potential long opportunities. A break and daily candle close below the 0.6350 mark will be needed for a change in structure, and this would then invalidate the bullish setup.
    Key levels to keep an eye on
    Support levels:
    0.6484 0.6445 0.6400 Resistance levels:
    0.6594 0.6650 0.6691
    AUD/USD daily chart
      Source: TradingView
    GBP/AUD technical analysis
    GBP/AUD has been rangebound for the best part of two months. For many pairs a 400-pip range is quite large, but in the case of an exotic like GBP/AUD it is not. As things stand, there is a clearly defined range and some key areas of support and resistance which may be used for potential opportunities in the interim. Support on the downside rests at the 1.9000 handle, and just below at the 1.8950 mark. A move lower also brings the possibility that we may spike slightly lower to tap into the 200-day MA at 1.8911.
    Key levels that may provide resistance for potential shorts will be the 1.9211 area and then the 1.9278 before the range high at 1.9338 comes into focus. All these levels may provide an opportunity for potential shorts, as even a breakout will only serve to improve the risk to reward ratio.
    GBP/AUD daily chart
      Source: TradingView
     
         
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  18. MongiIG
    A look at the “Santa Claus Rally” and which gains it has historically produced.
    Source: Bloomberg   Shares Stock Santa Claus rally Stock market index Market trend United States  
     Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 21 November 2023 12:43 Now is the time to buy US stocks
    According to Jeff Hirsch’s Stock Trader’s Almanac now is the time to buy US stock indices as we enter a bullish seasonal pattern today.
    By analysing data going back to 1950 Mr Hirsch shows that the November-to-January time frame is the year’s best consecutive three-month span to hold stocks.
    Thanksgiving kicks off this seasonal stock outperformance, followed by the “Santa Claus Rally” which covers the last five trading days of the year and the first two of the New Year, and the “January Effect” of small caps outperforming large caps in January, which begins in mid-December.
    Mr Hirsch and his friend Larry McMillan of the Options Strategist have combined “these seasonal occurrences into a single trade: buy the Tuesday before Thanksgiving and hold until the 2nd trading day of the New Year.” Apparently when trading this strategy with options the best day to do so is on the day before Thanksgiving.
    Since 1950, the S&P 500 is up 79.45% of the time from the Tuesday before Thanksgiving to the 2nd trading day of the year with an average gain of 2.57%. The Russell 2000 is up 77.27% of the time since 1979 with an average gain of 3.19%.
    Thanksgiving - Santa Claus Rally Trading statistics
    Source: Hirsch Holdings Inc. & StockTradersAlmanac.com There is an important caveat to the “Santa Claus Rally” though, coined by its 1972 inventor Yale Hirsch’s phrase: “If Santa Claus should fail to call, bears may come to Broad and Wall.”
    The “Santa Claus Rally” in the current market context
    When looking at the above strategy in the current context one shouldn’t be surprised if equity indices on both sides of the pond may at least short-term consolidate as liquidity dries up around the prolonged Thanksgiving weekend.
    After all, with US indices having strongly risen from their late-October lows - by between 8% and 14% in little over three weeks – and looking technically overbought, a minor correction over the coming days shouldn’t come as a surprise.
    Having said that, such a counter-trend move might represent an even better stock buying opportunity for the above mentioned strategy, especially since the last few days of November tend to lead to stock market gains.
    Best month of the year chart
    Source: Carson Investment Research, FactSet 20/11/2023 @ryandetrick
       
    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.
  19. MongiIG
    Technicals turning positive though yet to shift the overview, and both retail traders and CoT speculators heavy sell but not shorting into recent price gains.
      Source: Bloomberg
      Federal Reserve Inflation /business/market_index Federal Open Market Committee Bond market Consumer price index
     Monte Safieddine | Market Analyst, Dubai | Publication date: Monday 20 November 2023 07:11 More Fed members speak; and mostly worsening data
    More members of the Federal Reserve (Fed) spoke late last week. Goolsbee discussed the "golden path" to 2%, avoiding a recession, but emphasised keeping a vigilant eye on housing inflation. Cook expressed the possibility of a soft landing, albeit uncertain. Collins advocated for patience currently but stressed the need for monetary policy to maintain a restrictive stance for some time.
    On the data front, the housing sector reported building permits and housing starts for October, surpassing forecasts and previous readings. However, a weakening print from the NAHB took it to lows unseen in nearly a year. Trade pricing data fell below forecasts, industrial production reversed, and there was an increase in claims.
    Market dynamics and financial trends: a week of positive closures and bond market shifts
    Key stock indices closed the week positively, with gains attributed to lighter US Consumer Price Index (CPI) readings. Notably, large-cap stocks didn't outperform this time. Another positive note was the avoidance of a government shutdown. Energy prices experienced a week-on-week drop, aligning with generally weaker economic data within the 'bad news is good news' narrative.
    In the bond market, Treasury yields retreated week-on-week, with the 10-year closing below 4.5%. In real terms, the 5Y through 30Y averaged closer to 2.2%, down from 2.3% at the start of the previous week. Breakeven inflation rates experienced a dip. According to CME's FedWatch, market pricing indicates the majority expects the first rate cut from current levels in May of next year.
    Week ahead: key data releases, including FOMC minutes
    As for the week ahead, the holiday on Thursday in the US is set to bring a few things forward and postpone an item. Minutes from the latest FOMC (Federal Open Market Committee) meeting will be released tomorrow instead of Wednesday, following its most recent hold that came with a slightly dovish tweak but at times hawkish speak thereafter, pushing back against market pricing looking to dent its 'higher for longer' narrative.
    Housing sector and economic indicators: navigating a story of pullback
    A couple of items from the housing sector, with existing home sales on the same day for the month of October, tell a story thus far of a pullback, and mortgage applications the following day. Weekly claims will be on Wednesday after their unexpected increase last time around for both initial and continuous. Durable goods for October will also be released after a strong September print, along with the revised figures out of UoM (University of Michigan) following the uptick in consumer inflation expectations in both the 12-month and five-year preliminary readings and a clear upset in consumer sentiment.
    Navigating manufacturing stability: focus on preliminary PMIs
    Preliminary PMIs (Purchasing Managers’ Index) out of S&P Global will be on Friday, with a focus on whether the manufacturing sector can avoid falling back into contraction. Anxious bond market traders will be processing a couple of auctions today and tomorrow. In earnings, Zoom is today, but far more important with AI fund flow implications (even if preoccupied with the OpenAI drama over the weekend) is the last of the ‘magnificent seven’, Nvidia, expected to report tomorrow. Both aren’t components of this index.
    Dow technical analysis, overview, strategies, and levels
    It was last Tuesday's action, following lighter pricing data, that took price across its previous weekly first resistance level - lacking a trigger for cautious conformists and favoring contrarian buy-breakouts with a move past it. However, still within its second resistance, and another key technical indicator on the weekly time frame, tilting into the green. It's more interesting on the daily time frame ,that isn’t far off a shift to 'bull average' when ignoring price-indicator proximity. Last Thursday's first support managing to hold but lacking a trigger for cautious conformist buy-after-significant reversals.
      Source: IG
    IG client* and CoT** sentiment for the Dow
    As for sentiment, an increase in price usually causing sell bias to rise, as shorts initiate, and longs are enticed into closing out. Retail traders have opted to reduce their heavy sell sentiment, from 67% at the start of last week to 65% at the start of this week instead. CoT speculators are also little changed w/w and still in heavy sell territory, a drop in longs (by 1,816 lots) and shorts (by -2,379) taking the sell bias in percentage terms a notch higher to 73%.
      Source: IG
    Dow chart with retail and institutional sentiment
      Source: IG
    *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the start of last week. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
        This information has been prepared by IG, a trading name of IG 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.
    CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
  20. MongiIG

    The Week Ahead On The Markets

    By MongiIG,


    Market News
    The Week Ahead
    Read about upcoming market-moving events and plan your trading week
      Week commencing 20 November
    Chris Beauchamp's insight
    Next week is sparser in terms of key data, though eurozone watchers will keep an eye on the German IFO data. Consumer Price Index (CPI) in Canada will also be of interest, along with minutes from the Reserve Bank of Australia (RBA) and the Federal Reserve bank (Fed), covering their latest decisions to raise rates and leave them unchanged, respectively. Earnings season in the US is winding down, but NVIDIA and HP will be key names in the first half of the week. In the UK, AO World and Kingfisher could prove the most interesting for UK traders. The US Thanksgiving holiday takes place at the end of the week, resulting in a quiet second half of the week as US markets are closed on Thursday and have a half day on Friday.
      Economic reports
      Weekly view Monday
    None

    Tuesday
    12.30am – RBA meeting minutes. Markets to watch: AUD crosses
    1.30pm – Canada CPI (October): price growth to be -0.1% Month on month (or MoM) and 3.8% Year-over-year (YoY,) from 0.2% and 3.3% respectively. Core CPI to be 2.8% YoY from 2.6%. Markets to watch: CAD crosses
    1.30pm – US Chicago Fed index (October): index to rise to 0.02. Markets to watch: USD crosses
    3pm – US existing home sales (October): sales to fall 1% MoM. Markets to watch: USD crosses
    7pm – Fed minutes: these will look at the latest decision to leave unchanged rates unchanged. Markets to watch: US indices, USD crosses

    Wednesday
    12.30pm – UK autumn statement: the chancellor, Jeremy Hunt, will unveil the government’s spending plans for the next six months. Markets to watch: GBP crosses
    1.30pm – US durable goods orders (October), initial jobless claims (w/e 18 November): orders to rise 4.7% MoM. Claims to fall to 225K from 231K. Markets to watch: US indices, USD crosses
    3.30pm – US EIA crude oil inventories (w/e 17 November): stockpiles rose by 3.59 million barrels last week. Markets to watch: Brent, WTI

    Thursday
    Thanksgiving – US markets closed
    Workers’ Day – Tokyo Stock Exchange closed
    8.30am – German manufacturing Purchasing Managers Index (PMI) (November, flash): previous reading 40.8. Markets to watch: EUR crosses
    9.30am – UK services & manufacturing PMI (November, flash): services to hold at 49.5 and manufacturing to rise to 45.1. Markets to watch: GBP crosses
    11.30pm – Japan CPI (October): prices to rise 3.2% YoY from 3% and core CPI to rise 2.9% YoY from 2.8%. Markets to watch: JPY crosses

    Friday
    9am – German IFO index (November): previous reading 86.9. Markets to watch: EUR crosses
    2.45pm – US manufacturing & services PMI (November, flash): manufacturing to hold at 50 and services to drop to 50.5 from 50.6. Markets to watch: USD crosses
      Company announcements
     
    Monday
    20 November
    Tuesday
    21 November
    Wednesday
    22 November
    Thursday
    23 November
    Friday
    24 November
    Full-year earnings
    Compass   Sage,
    Grainger,
    Britvic     Half/ Quarterly earnings
    Zoom AO World,
    Cranswick,
    NVIDIA,
    Best Buy,
    HP Johnson Matthey,
    Severn Trent MITIE,
    FirstGroup
      Trading update*
        Kingfisher  
       
        Dividends
    FTSE 100: Scottish Mortgage Inv Trust, RS Group, National Grid, Vodafone, Imperial Brands, DCC
    FTSE 250: 3i Infrastructure, Witan Inv Trust, Tate & Lyle, Urban Logistics, Kainos Group, British Land, Babcock, HICL Inf Fund, Liontrust Asset Management
    Dividends are applied after the close of the previous day’s session for each market. So, for example, the FTSE 100 goes ex-dividend on a Thursday, but the adjustment is applied at the close of the previous day, e.g. Wednesday. The table below shows the days in which the adjustment is applied, not the ex-dividend days.
  21. MongiIG
    The US dollar could head lower in the near term; and the pullback in US Treasury yields will act as a headwind for the greenback. What is the technical outlook for EUR/USD, GBP/USD and AUD/USD?
      Source: Bloomberg
      Forex Shares United States dollar Euro EUR/USD AUD/USD  
     Diego Colman | Market Analyst, New York | Publication date: Friday 17 November 2023 07:06 The US dollar, as measured by the DXY index, has fallen more than 2.15% this month. Over the last couple of days, however, the selling pressure has eased, allowing the broader greenback to perk up modestly.
    Signs indicate downward correction of the US dollar may not be over
    Despite the stabilization, it is likely that the downward correction that began a few weeks ago has not yet run its course. One variable that could weigh on the US currency is the recent move in treasuries as traders try to front-run the "Fed pivot." For context, yields have pulled back sharply this month, with the downturn accelerating, following subdued October US CPI and PPI data. Both reports surprised to the downside, sparking a dovish repricing of interest rate expectations.
    Yields could continue to retrench if economic weakness, clearly displayed in the latest jobless claims numbers, intensifies heading into 2024. This scenario is anticipated as the impact of past tightening measures feed through the real economy.
    Oil's influence: a 20% plunge and its potential impact on USD and yields
    Another factor that could further depress yields and the US dollar is the massive sell-off in oil, which has plunged nearly 20% this quarter. If the trajectory of declining energy costs persists, inflation will decelerate faster than forecast, reducing the need for an overly restrictive stance by the US central bank.
    EUR/USD technical analysis
    EUR/USD was muted on Thursday following a moderate pullback in the previous session. Despite market indecision, the euro retains a constructive bias against the US dollar, with prices making higher highs, and higher lows recently, and trading above key moving averages.
    To reaffirm the bullish perspective, the pair needs to hold above the 200 and 100-day SMA near 1.0765. Successfully defending this support zone could pave the way for the exchange rate to break above the psychological 1.0900 level, and advance towards Fibonacci resistance at 1.0960, followed by 1.1075.
    In case sellers regain strength and push EUR/USD below 1.0765, the short-term bias might shift to a bearish outlook for the common currency. This potential development might lead to a downward move towards 1.0650, with continued weakness heightening the risk of retesting trendline support at 1.0570.
    EUR/USD chart
      Source: TradingView
    GBP/USD technical analysis
    Thursday saw GBP/USD maintaining a subdued stance, struggling to gather positive impetus, with slight consolidation below the 200-day simple moving average. In the event of escalating losses, primary support rests at 1.2320. Preserving this crucial floor is essential to revive hope of a sustained uptrend; any failure to do so might lead to a descent toward the 1.2200 threshold.
    Should the bulls reclaim control, initial resistance is expected at 1.2450/1.2460. Upside clearance of this barrier could invite fresh buying interest, laying the groundwork for a potential rally towards the 100-day simple moving average. On further strength, we could see a move towards 1.2590, which represents the 50% Fibonacci retracement of the July/October decline.
    GBP/USD chart
      Source: TradingView
    AUD/USD technical analysis
    Following robust gains earlier in the week, AUD/USD fell on Thursday, with prices slipping beneath the 100-day SMA, after being rejected at the 0.6500 handle. Should the retracement continue, support rests at 0.6460 and 0.6395 thereafter. On further weakness, a drop towards 0.6350 is plausible.
    On the other hand, if the pair resumes its advance, technical resistance is located around the 0.6500 mark. Overcoming this hurdle might present a challenge for the bullish camp, yet a clean and clear breakout could catalyze a rally towards the 200-day simple moving average a tad below the 0.6600 level.
    AUD/USD chart
      Source: TradingView
     

       
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  22. MongiIG
    Nvidia is set to report Q3, FY24 results on Nov 21st, 2023 after market closes. Nvidia’s share price has surged 20% in November and 260% year to date. Now, what to expect for the upcoming earnings?
    Source: Bloomberg   Nvidia Shares Revenue Price Technical analysis Economy of China  
    Hebe Chen | Market Analyst, Melbourne | Publication date: Friday 17 November 2023 09:35 Nvidia Q3 Earnings date

    Nvidia is set to report third-quarter FY244 results on Nov 21st, 2023 after market closes.

    Nvidia Q3 Earnings expectation

    For the September quarter, the AI chip leader expects revenues of $16.09 billion, representing a jaw-dropping 171.7% increase from the same period last year, and 18% up from the second quarter. Its earnings per share is estimated to grow by 400% year-on-year to $3.39 per share.
    Source: Nasdaq Nvidia Q3 Earnings key watch

    Hot chips

    As a market leader in the AI chip world, Nvidia enjoys significant pricing power and benefits from explosive surging demand so far this year. Not only have major US tech giants purchase Nvidia’s chips, but Chinese tech companies like Tencent have stocked up Nvidia’s made-for-China chips, despite the elevated chip export restrictions imposed by the Biden administration.

    Therefore, it’s reasonable to expect Nvidia’s chip sales in the third quarter to sustain their robust momentum from the previous quarters, with the anticipation that revenue from the “Data Center” division will reach $12.7 billion—a staggering 232% year-on-year increase from $10.32 billion in Q2.

    However, emerging signs indicate that a shifting landscape in the AI chip world is on the way.

    There’s no doubt that the US government’s chip restrictions have cast a shadow over Nvidia’s Chinese market which contributes nearly one-quarter of the chip market’s total revenue. Despite Nvidia's plans to release three new chips for China in the face of the new bans, Chinese companies are beginning to lose faith and seek out non-US suppliers. Baidu, for example, recently announced a new deal to source chip from Huawei. As a result, Nvidia's outlook for the quarter and the year ahead, in the face of this new reality, will be in focus during its Q3 earnings.

    The return of Gaming

    Moreover, NVIDIA’s “Gaming” and “Professional Visualization” sectors are expected to further recover in the third quarter. In the previous quarter, revenue from the Gaming sector and Professional Visualization jumped up 22% and 24% year-over-year, respectively. It is anticipated that strong demand across most regions for gaming products will result in third-quarter revenue from the Gaming sector standing at $2.78 billion, a 76.5% increase compared to the same quarter in 2022.

    Nvidia rating and technical analysis

    Based on ratings from 38 Wall Street analysts, 37 suggested the stock as a buy, while one rated it as a hold. For the next 12 months' price target, the average price range for Nvidia is $560-$648, representing a 14%-32% premium from today’s stock price.
    Source: Tipranks/IG From a technical standpoint, after breaking out from the August-October downward trendline, Nvidia's prices have surged more than 20% in November and 260% year to date, with the record high marked in August now back in sight.

    While the newly-formed ascending trendline should support maintaining its upward trajectory, the approaching psychological $500 level is poised to play a crucial role with a great potential to prompt profit-taking, similar to what happened at the end of August. Thus, a move above this level will help the price to revisit its record high at $520, but failing to do so may leave the ascending tunnel at risk of breaching, leading to a move back towards the $470 level.
    Nvidia Q3 summary

    In summary, in a year defined by the AI gold rush, it’s easy to understand that expectations are sky-high for the leader in the AI chip world. Additionally, Nvidia's Q3 earnings come at a time when its stock prices have been rising sharply, with another record high seemingly on the horizon. Now the question is whether Nvidia’s upcoming report can meet such high expectations and lofty valuation.

        This information has been prepared by IG, a trading name of IG 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.
    CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
  23. MongiIG
    British Land, Persimmon and PureTech Health could constitute the three best FTSE 250 shares to watch next month. These shares have been selected for recent market news.
    Source: Bloomberg   Indices Unemployment FTSE 100 Anxiety disorder Clinical trial Stress
     Charles Archer | Financial Writer, London The FTSE 250 — unlike its older brother the FTSE 100 — is domestically focused. And the UK’s economic outlook remains as precarious as it has through much of 2023, with Office for National Statistics GDP data showing that the economy saw no growth in the three months to September.
    The data body has also released information showing that wages in the same period rose at an annual rate of 7.7%, faster than price rises. For context, CPI inflation is currently at 6.7% — and a Reuters poll of analysts considers this key metric will fall to just 4.8% at the next reading tomorrow.
    Meanwhile, though the unemployment rate remains unchanged at 4.2%, job vacancies between August and October fell by 58,000 to 957,000 — the sixteenth month in a row where vacancies have fallen. And the Bank of England has already warned that higher rates could drive unemployment to 5% in 2024, resulting in slower wage growth and 150,000 job losses.
    For context, 2,315 companies fell into insolvency in England and Wales in October, 18% more than in October 2022, and also 18% more than in September 2023.
    While there may be some movement on the fiscal side with the Autumn Statement this month, growth can be dependent on interest rates. Morgan Stanley analysts think that rate cuts could arrive as soon as May 2024, and the base rate could fall to 4.25% by the end of next year.
    But as usual, Monetary Policy Committee members remain divided — chief economist Huw Pill has already argued that it ‘doesn’t seem totally unreasonable’ to expect a rate cut by next August — but Governor Andrew Bailey still thinks it’s ‘really too early’ to talk about the subject.
    And this makes the macroeconomic landscape complex for FTSE 250 companies — on 2 November, the index was the best performing in the world. But of course, past performance is not an indicator of future returns.
    Best FTSE 250 shares to watch?
    1. British Land
    British Land shares rose by 9.1% today after on the back of solid half-year results and positive broker comments. In the six months to 20 September 2023, the company saw underlying earnings rise by 3.4% — while the interim dividend also rose by almost 5%.
    While British Land shares are still down by more than 40% over the past five years, this can be where value is found in the FTSE 250. CEO Simon Carter enthuses that underlying profits are increasing because of strong leasing and cost control — and occupancy is at an excellent 96%. The CEO also notes that as rates start to fall, the quality of British Land’s assets will ‘reassert themselves as the primary drivers of performance.’
    In other words, this cyclical company may be at the bottom of its cycle. Stifel has hailed the results as ‘resilient…given the market backdrop’ and that ‘given the clear slowdown in valuation declines and increased clarity of future interest rates, we think the shares look oversold at a 44% discount to spot NTA.’ The 6.8% dividend yield could also look attractive.
    2. Persimmon
    Persimmon shares have lost more than 40% of their value over the past five years, with the housebuilder ejected from the FTSE 100 as its market capitalisation fell with rising rates. However, it increased its full-year build target to 9,500 homes this month — 500 more than its August prediction.
    Of course, most of its quarterly earnings make for poor reading. Completions are down by more than a third in the three months to September 2023 at just 1,439 homes — and the order book has also fallen by a third to just £930 million. The FTSE 250 operator has also warned that market conditions ‘will remain highly uncertain’ going into 2024.
    Further, market leading property portal Rightmove data shows that asking prices for homes in the UK have fallen by 1.7% — or more than £6,000 — this month to £362,143. This represents the steepest fall in five years for the time of the year.
    But Persimmon shares hit just 960p on 25 October and have now recovered to 1,239p today. Arguably, much of the negative news could be priced in — and housebuilding stocks are well-known as cyclical opportunities. For context, US CPI data has come in under expectations, and the stock has reacted positively today.
    3. PureTech Health
    PureTech Health is definitely not a household name — unlike the shares above — but the smaller FTSE 250 company today announced that its LYT-300 (Oral Allopregnanolone) clinical trial candidate achieved its primary endpoint in a Phase 2a acute anxiety trial within healthy volunteers.
    Specifically, it achieved a statistically significant reduction in the stress hormone response, as measured by salivary cortisol, compared to placebo. And this ‘proof-of-concept’ trial, which demonstrates a reduced physiological stress response, could support the further development of LYT-300 as a treatment for a range of anxiety disorders.
    For perspective, anxiety affects nearly 30% of all US adults, but just like antidepressants, anti-anxiety medications have drawbacks including mixed efficacy, the potential for abuse, delayed onset of action and poor tolerability — and this treatment could overcome these negative side effects.

    LYT-300 was well-tolerated across the trial, with only transient mild or moderate adverse events. Of course, the company has more than one asset — with 27 current candidates, one filed for FDA approval and two taken from inception to regulatory clearance.
    But despite this success, all early stage clinical trials carry some risk.

        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.
  24. MongiIG
    The US dollar, measured by the DXY index, rallies on soaring bond yields; Powell’s hawkish comments reinforce the greenback’s advance. What are the key levels to watch for EUR/USD, USD/JPY, AUD/USD and gold prices?
      Source: Bloomberg
      Forex Commodities United States dollar Market sentiment Japanese yen Gold
    IG Analyst The dollar's surging momentum

    The broader US dollar opened the session on a subdued note but saw a strong afternoon rally, primarily fueled by surging yields, following lackluster demand for US government securities at a significant Treasury auction. The greenback's upward surge gained further momentum with the hawkish statements made by Federal Reserve Bank Chair, Jerome Powell during a panel hosted by the IMF.
    Powell's hawkish outlook and market uncertainty

    In public remarks, the FOMC chief said that policymakers are not confident they have achieved a sufficiently restrictive stance to return inflation to the 2.0% target in a sustained manner. He also indicated that further progress on cooling price pressures is not guaranteed, and stronger growth could warrant higher rates.
    When it was all said and done, the DXY index was up nearly 0.4% on the day. Taken together, Powell’s comments suggest that the central bank is not 100% convinced that the hiking cycle is over. This could mean another possible hike next month or in January, especially if financial conditions continue to ease, as has been the case since late October (tech stocks have been on a bullish tear, ignoring today’s performance).

    For the time being, expectations will remain in a state of flux, with sentiment shifting with the strength or weakness of data releases. For this reason, it is imperative that traders keep an eye on the economic calendar in the coming days and weeks. That said, one key report worth following is the October consumer price index survey, due out next Tuesday.
    Impact on bond yields and currencies
    In terms of analysts’ projections, headline CPI is forecast to have risen 0.1% on a seasonally adjusted basis last month, bringing the annual rate down to 3.3% from 3.7% previously. The core gauge, for its part, is seen increasing 0.3% monthly, resulting in a yearly reading of 4.3% - unchanged from September. With the Fed hypersensitive to incoming information and fearful of inflationary risks, any upward deviation of official data from consensus estimates should boost bond yields and strengthen the case for higher interest rates for longer. This scenario would be positive for the greenback, but negative for gold, the euro, the Australian dollar and the yen.
    EUR/USD technical analysis

    After facing rejection from Fibonacci resistance at 1.0765, EUR/USD has undergone a quick pullback, with the exchange rate now flirting the lower limit of a support band at 1.0650. The bulls must defend this floor at all costs – failure to do so can send the pair reeling, driving prices toward trendline support at 1.0555. On further weakness, the possibility of a retest of the 2023 lows come into view.

    In case the market turns and sentiment swings in favor of the bulls, the first technical barrier to watch appears at 1.0765, where the 200-day simple moving average aligns with the 38.2% Fib retracement of the July/October decline. Overcoming this confluence of key levels could reinforce the bullish momentum, paving the way for a move towards 1.0840.
    EUR/USD technical chart
      Source: TradingView
    USD/JPY technical analysis

    USD/JPY pulled back last week, but has reasserted its upward momentum, taking out an important ceiling at 150.90 and charging towards its 2022 and 2023 highs, just shy of the psychological 152.00 mark. With prices on a bullish tear and approaching an important tech zone, traders should exercise caution, as Tokyo may step in any minute to curb speculative activity and prevent further yen depreciation.

    In the event of FX intervention by Japanese authorities, USD/JPY could quickly sink below 150.90 and head towards the 149.00 handle. On further weakness, the focus shifts to 147.25, followed by 146.00. If Tokyo stays out of currency markets and allows the exchange to drift above 152.00, a potential rally towards the upper boundary of a medium-term rising channel at 153.40 becomes conceivable.
    USD/JPY technical chart
      Source: TradingView
    AUD/USD technical analysis

    AUD/USD fell for the fourth straight session on Thursday, erasing all gains accumulated following last week’s bullish breakout, which turned out to be a fakeout. After this pullback, the pair has arrived at an important support near 0.6350. The integrity of this area level is vital; a failure to maintain it could result in a drop towards 0.6325. On further weakness, a revisit to this year's lows could be in the cards.

    Despite the recent setback for the Australian dollar, the bullish scenario should not be entirely dismissed. That said, if the bulls engineer a comeback and trigger a rebound off current levels, overhead resistance appears around the 0.6400 handle, followed by 0.6460. Successfully overcoming this technical barrier could reignite bullish momentum, opening the door for a rally toward the November highs near 0.6500.
    AUD/USD technical chart
      Source: TradingView
    Gold technical analysis

    Earlier this week, gold reversed lower when the bulls failed to take out a critical ceiling in the $2,010/$2,015 area. However, XAU/USD has started to perk up after this setback, with prices encountering support around the 200-day simple moving average ahead of a modest bounce. If gains pick up pace in the coming trading sessions, initial resistance appears at $1,980, followed by $2,010/$2,015.

    Conversely, if sellers return and regain the upper hand in financial markets, the first floor to monitor is positioned at $1,945, which aligns with the 200-day SMA. Although gold might find a foothold in this region during a pullback, a breakdown could prompt a descent towards $1,920. Below this region, the focus transitions to $1,900.
    Gold price chart
      Source: TradingView
     
     
     
     
     
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  25. MongiIG

    The Week Ahead On The Markets

    By MongiIG,


    Market News
    The Week Ahead
    Read about upcoming market-moving events and plan your trading week
      Week commencing 13 November
    Chris Beauchamp's insight
    US and UK consumer price index (CPI) reports dominate the week, as investors wait to hear the latest news on the key indicator of the past year. Other UK data such as employment figures and retail sales will drive activity in sterling. US retailers such as WalMart update the market with earnings, while in the UK BAE Systems and Burberry are among the major companies reporting results.
     
    Economic reports
    Weekly view Monday
    11.30pm – Australia Westpac consumer confidence change (Nov): index to rise to 82.6. Markets to watch: AUD crosses

    Tuesday
    12.30am – Australia NAB business confidence (October): expected to fall to -1. Markets to watch: AUD crosses
    7am – UK employment data (September): unemployment rate to rise to 4.4%, average earnings to rise 8.3% (inc bonus). Markets to watch: GBP crosses
    10am – German ZEW index (November): index expected to rise to 1 from -1.1. Markets to watch: EUR crosses
    1.30pm – US CPI (October): prices expected to rise 3.8% Year-over-year (YoY) and 0.1% Month-over-Month (MoM), from 3.7% and 0.4%, while core CPI to rise 3.8% YoY and 0.3% MoM, from 4.1% and 0.3%. Markets to watch: US indices, USD crosses
    11.50pm – Japan gross domestic product (GDP) (Q3, preliminary): growth expected to fall 0.6% YoY and 0.1% Quarter on quarter (QoQ). Markets to watch: JPY crosses

    Wednesday
    2am – China industrial production (October): forecast to rise 4.5% YoY. Markets to watch: CNH crosses
    7am – UK CPI (October): headline CPI to be 4.9% YoY and 0.2% MoM, from 6.7% and 0.5%, and core CPI to fall to 5.6% from 6.1% YoY. Markets to watch: GBP crosses
    1.30pm – US PPI, retail sales (October): Producer Price Index (PPI) to drop to 0.1% MoM from 0.5%, and retail sales to rise 0.2% from 0.7%. Markets to watch: USD crosses
    3.30pm – US EIA crude oil inventories (w/e 3 & 10 November): data for week ending 3 November delayed by one week. Markets to watch: Brent, WTI

    Thursday
    2am – China industrial production (October): forecast to rise 4.5% YoY. Markets to watch: CNH crosses
    7am – UK CPI (October): headline CPI to be 4.9% YoY and 0.2% MoM, from 6.7% and 0.5%, and core CPI to fall to 5.6% from 6.1% YoY. Markets to watch: GBP crosses
    1.30pm – US PPI, retail sales (October): Producer Price Index (PPI) to drop to 0.1% MoM from 0.5%, and retail sales to rise 0.2% from 0.7%. Markets to watch: USD crosses
    3.30pm – US EIA crude oil inventories (w/e 3 & 10 November): data for week ending 3 November delayed by one week. Markets to watch: Brent, WTI

    Friday
    7am – UK retail sales (October): expected to fall 0.4% MoM. Markets to watch: GBP crosses
    1.30pm – US housing starts & building permits (October): starts to fall 1.3% and permits to drop 1.5%. Markets to watch: USD crosses
      Company announcements
     
    Monday
    13 November
    Tuesday
    14 November
    Wednesday
    15 November
    Thursday
    16 November
    Friday
    17 November
    Full-year earnings
      Imperial Brands   Siemens   Half/ Quarterly earnings
    British Land Vodafone,
    Land Securities,
    Wise,
    Home Depot Experian,
    SSE,
    Fuller Smith & Turner,
    Cisco,
    Target Premier Foods,
    IDS,
    Burberry,
    United Utilities,
    Walmart,
    Macy's,
    Gap
      Trading update*
    BAE Systems   Tullow Oil Aviva,
    Crest Nicholson,
    Smiths Group
    Foot Locker  
        Dividends
    FTSE 100: Pershing Square, Bunzl, Hargreaves Lansdown, Unilever, GSK, Shell, Marks & Spencer, B&M European Value Retail
    FTSE 250: ICG Enterprise Trust, NextEnergy, Bytes Technology, Octopus Renewables
    Dividends are applied after the close of the previous day’s session for each market. So, for example, the FTSE 100 goes ex-dividend on a Thursday, but the adjustment is applied at the close of the previous day, e.g. Wednesday. The table below shows the days in which the adjustment is applied, not the ex-dividend days.
    Index adjustments
     
    Monday
    13 November Tuesday
    14 November Wednesday
    15 November Thursday
    16 November Friday
    17 November Monday
    20 November FTSE 100     14.12       Australia 200 8.9   7.9 0.4 0.1 0.5 Wall Street   4.9 33.9   7.8   US 500 0.93 0.83 1.07 0.10 0.47 0.11 Nasdaq 1.07 4.08 1.57   0.19 0.50 Netherlands 25     2.28       EU Stocks 50 0.9       4.0   China H-Shares             Singapore Blue Chip 0.84     0.42     Hong Kong HS50     1.6   5.4   South Africa 40             Italy 40         247.1   Japan 225              

Markets

Forex

Indices

Shares

Other markets

IG services

Spread betting

CFD trading

Share dealing

Trading platforms

Web platform

Trading apps

Advanced platforms

Compare features

About Us

How we support you

What we do with your money

How does IG make money?

Professional trading

Contact us

Post topic on Community

Browse Help and Support

Education on Academy

Tweet us @IGClientHelp

UK

IG | Sitemap | Terms and agreements | Privacy | How to fund | Cookies | About IG

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

CFD accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd and share dealing and stocks and shares ISA accounts provided by IG Trading and Investments Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number 04008957), IG Index Ltd (a company registered in England and Wales under number 01190902) and IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Index Ltd (Register number 114059) and IG Trading and Investments Ltd (Register number 944492) are authorised and regulated by the Financial Conduct Authority.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

© 2003 - 2020

IG | Terms and agreements (UK) | Privacy (UK) | Cookies | Investors | Careers | Marketing partnership

×
×
  • Create New...
us