Jump to content
International Workers' Day & Early May Trading Hours ×

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
    Alibaba Group will announce September quarter results on November 16, 2023, US Eastern Time. Despite its robust financial performance in the past quarter, Alibaba’s stock prices have dropped 20% in the past three months, why?
    Source: Bloomberg   Forex Shares Alibaba Group China Artificial intelligence United States  
    Hebe Chen | Market Analyst, Melbourne | Publication date: Tuesday 14 November 2023 09:17 Alibaba earnings date
    Alibaba Group will announce September quarter results on November 16, 2023 7:30 am US Eastern Time (November 16, 2023 8:30 pm Hong Kong Time).
    Alibaba earnings expectations
                       
    September Quarter
    June Quarter            
    YOY
    EPS($)      
    $2.12
    $2.17
    17%
    Revenue ($)
    $30.79B
    $32.29B
    6%
    Source: Alibaba
    Source: Nasdaq Alibaba earnings key watch
    Alibaba's journey out of its long winter appears to be more bumpy than initially anticipated. After enduring three years of harsh regulatory clampdown from the Chinese government, the tech giant was expected to breathe a new life this year.
    In the June quarter, Alibaba did deliver a robust result, with a 14% year-over-year increase in revenue to RMB 234,156 million (US$32,292 million). Its income from operations surged by 70%, accompanied by exceptional cash flow: net cash flow provided by operating activities rose by 34%, and free cash flow experienced a remarkable 76% increase.
    Source: Alibaba Despite its robust financial performance in the past quarter, Alibaba has encountered notable challenges since the third quarter of the year, primarily stemming from an unexpectedly softening domestic consumer market in China. The world's second-largest economy transitioned into deflation territory in July, with producer prices experiencing a continuous decline for 13 consecutive months up to October. In fact, the 20% decrease in Alibaba's share prices over the past three months signals global investors' fragile confidence in the Chinese e-commerce giant. It is evident that investors remain skeptical about BABA's recovery trajectory moving forward.
    Beyond its financial performance, a crucial aspect to monitor is Alibaba's progress in AI development. Just two weeks ago, on October 31st, Alibaba launched the latest version of its artificial intelligence model, a significant development aimed at competing with its US counterparts such as Amazon and Microsoft. As the leading cloud player in China by market share, Alibaba's potential expansion into the global market with its leading AI and Cloud capabilities could mark the beginning of a new era for the Chinese tech giant, provided it achieves success.
    Alibaba earnings technical analysis
    Turning to the weekly chart of BABA, following last week's retracement, BABA’s stock price has reached a crucial support level at $77-$80. Given that the price is currently trading below all its short-term and long-term trendlines, sellers may keep the pressure on the current support level, potentially sending the price to revisit its 12-month low at $74.
    On the flip side, only a breakout from the Jan-Oct downward trendline could help the bulls stage a comeback, with overhead resistance located at $89-$90. Further clearance of the 100-day MA could usher in a rally toward the July highs near the $97-$100 handle.
    Alibaba stock rating and IG sentiment
    Source: TipRanks/IG
       
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  2. MongiIG
    How to trade Tullow Oil shares following the company’s debt refinancing deal with Glencore ahead of Wednesday’s trading statement?
    Source: Bloomberg   Shares Commodities Tullow Oil Glencore Debt Price  
     Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 14 November 2023 What impact could Tullow Oil’s debt refinancing have on its share price?
    Shares of Tullow Oil PLC have seen a surge on Monday as the Africa-oriented oil producer has secured a fresh $400 million debt facility through a deal with Glencore ahead of its Wednesday trading statement.
    This five-year arrangement will offer draw-downs over an initial 18-month period and will carry interest at an overnight benchmark rate plus 10%. Tullow has also agreed to oil marketing and offtake contracts with Glencore. This facility is planned to enable Tullow to completely address a number of financing agreements that are due to mature in 2025 and 2026.
    Rahul Dhir, Tullow's chief executive, views this agreement as a strong validation of the company’s business strategy and plan. He further added that this move is a significant step in his refinancing strategy, following the successful and equity accretive tender offer in June.
    In the London market, Tullow shares rose by 7% to trade at 32.40p each, giving the company a market capitalisation of around £470 million. Dhir stated that the Glencore debt, along with Tullow’s cash and an additional $800mn of free cash flow from 2023 to 2025, would allow them to fully address all outstanding 2025 notes. The financing also prepares Tullow for a successful refinancing of the 2026 notes.
    Alex Sanna, Glencore’s oil and gas business CEO, also expressed his support for the agreement, stating that it endorses Tullow's business strategy and plan and showcases Glencore’s capability in structuring finance solutions in the oil and gas sector.
    Despite the high cost of this new arrangement, it extends the maturity of Tullow’s debt and alleviates pressure in the near-term. This insight, coupled with the strong endorsement from both Tullow and Glencore executives, indicates a positive outlook for Tullow's financial future.
    How to trade Tullow Oil’s trading statement?
    On Wednesday 15 November Tullow Oil is expected to publish a trading statement which will likely impact its share price further.
    Technical analysis on Tullow Oil’s share price
    Tullow Oil’s share price, which has fallen year-to-date by over 10% despite rallying by 7% on Monday 13 November as the Africa focused oil producer secured a new $400 million debt facility through a deal with Glencore, will stay on a medium-term downward trajectory unless it can rise above its 35.78 pence late-October high.
    If so, the September-to-November bearish corrective phase will be deemed to have ended with the September peak at 39.94p being back in the picture.
    Tullow Oil Daily Candlesticks Chart
    Source: TradingView Tullow Oil’s share price needs to remain above its October-to-November lows at 30.22p to 30.04p lows for a bullish reversal to remain possible, though.
    In case of a fall through the minor psychological 30p level being seen, the company’s share price might slip further towards the late-June and July lows at 27.30p to 27.00p. Further down lies the March low at 25.94p.
    Tullow Oil Weekly Candlesticks Chart
    Source: TradingView Analysts recommendations and IG sentiment
    Fundamental analysts are torn between ‘hold’ and ‘buy’ with Refinitiv data showing 3 strong buy, 3 buy, 4 hold and 1 sell - with the mean of estimates suggesting a long-term price target of 56.73p for the share, around 72% higher than the current share price (as of 13/11/2023).
    Source: Refinitiv IG sentiment data shows that 95% of clients with open positions on the share (as of 13 November 2023) expect the price to rise over the near term, while 5% of clients expect the price to fall whereas trading activity over the last week shows 83% of buys and 70% of buys this month.
    Source: IG      
    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.
  3. MongiIG
    Phoenix Group, Vodafone and M&G could constitute the three best FTSE 100 dividend shares to watch next month. These shares are currently the highest yielding on the index.
    Source: Bloomberg  Charles Archer | Financial Writer, London The FTSE 100 has enjoyed somewhat of a volatile 2023 — falling to a recent low of 7,291 points on 27 October before recovering to 7,402 points today.
    Still, the UK’s premier index remains down by 1.9% year-to-date. Despite being filled with miners, oilers, and banks, many of which are profiting from historically higher commodity prices and tightening monetary policy, the index is likely reacting to wider geopolitical instability. For perspective, FTSE Russell data indicates that FTSE 100 companies generate circa 80% of their revenue from overseas.
    Further, the UK’s macroeconomic situation remains subject to significant variability. While the Bank of England has chosen to retain the base rate at 5.25% for now, CPI inflation remains more than triple the official 2% target at 6.7%.
    And on the fiscal policy side, the Autumn statement later this month could yield yet more uncertainty. Chancellor Jeremy Hunt has steadfastly refused to entertain the idea of significant tax cuts, despite significant political pressure to do so. Given the lateness of the election cycle and the state of the polls, some tax cuts may nevertheless be incoming.
    Accordingly, though the following three shares are currently the highest yielding on the index, it’s important to note that these yields may not be sustainable — and further — are subject to wider macroeconomic pressures. Phoenix Group has its debt pile, Vodafone shares a poor share price track record, and M&G’s popularity could see it become overvalued in time.
    For context, housebuilder Persimmon was consistently one of the highest-yielding FTSE 100 stocks for several years and has now been demoted to the FTSE 250 in the face of the weaker housing market. Past performance is not an indicator of future returns.
    Best FTSE 100 dividend stocks to watch?
    1. Phoenix Group
    With a dividend yield of 11.2%, this popular insurance company may be tempting to value investors eyeing its 24.7% share price fall year-to-date. For context, the company paid out 50.8p to investors last year — and the average analyst expectation is that this will increase to 52.6p in 2023.
    In H1 results, the FTSE 100 business reported cash generation of £898 million, above analyst predictions, allowing the company to boost its interim dividend by 5% to 26p per share.
    Given that Phoenix Group is now on track to generate £1.3 billion to £1.4 billion of cash generation for the full year, the dividend could now be safe — especially with its solvency II ratio of 180% at the top of the 140-180% management target.
    However, there are risks. Its bonds are likely falling sharply in value as rates continue to rise, and Phoenix also has a debt pile to manage.
    JP Morgan analysts have cut their price target from 655p to just 430p, and downgraded Phoenix to underweight, arguing that ‘the stock has too much debt leverage relative to peers, which creates numerous capital and growth risks in the long term.’
    2. Vodafone
    Vodafone shares have fallen by 46.5% over the past five years, and now offer a 10% dividend yield with a price-to-earnings ratio of just 2. While this may seem like an exceptional opportunity at first glance, it’s important to place these numbers into context.
    Vodafone saw after-tax revenue of €11.84 billion in the financial year to March 2023 — but this was heavily warped by one-off asset sales, including the €8.61 billion generated from the sale of Vantage Towers. If you remove the gains made from these sales, the price-to-equity ratio is significantly higher.
    However, the dividend itself appears relatively safe — Vodafone is selling more assets, including its Spanish arm for ‘at least’ €4.1 billion, more than enough cash to pay a dividend of €0.09 a share, as it has every year for the past six years.
    While some analysts think the dividend could be cut, the FTSE 100 telecoms operator reports results next week — investors don’t have long to wait to find out.
    3. M&G
    With a dividend yield of 9.8%, M&G is seemingly going from strength to strength. The savings and investment provider plans to generate operating capital amounting to £2.5 billion by the end of 2024.
    Happily, the FTSE 100 dividend stock has now achieved more than 50% of this three-year target, 18 months in — meaning it is on track. And its shareholder Solvency II Coverage ratio remains at the top end of the target range at 199%, with no defaults in the first half of the year. Yet even having risen by 7.6% year-to-date, it still boasts a near double-digit dividend yield.
    And in half-year results, M&G increased its interim dividend by 5% to 6.5p per share. For context, it saw positive net client inflows of £700 million — remaining positive into a third consecutive year. M&G also saw operating capital generation rise by 17% year-over-year to £505 million, driving adjusted operating profit 31% higher to £390 million.
    CEO Andrea Rossi enthuses that the results ‘demonstrate the underlying strength of our business model, the resilience of our balance sheet… we have made progress against all three pillars of the strategy that we launched in March.’
    The company’s strategy continues to shift with the times; it recently closed its property fund due to weak retail investor demand — but has also unveiled its first European long-term investment fund, which will invest in private credit.

        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.
  4. MongiIG
    Shell shares may continue to remain a FTSE 100 favourite as the oil major pivots away from renewables and towards traditional oil and gas activities.
    Source: Bloomberg   Indices Shares Commodities Shell plc Petroleum Price of oil
     Charles Archer | Financial Writer, London | Publication date: Monday 06 November 2023 19:39 Shell (LON: SHEL) shares surged to a record high in mid-October, as the FTSE 100 operator was buoyed by fears that the Israel-Hamas war could develop into a wider regional conflict involving Saudi Arabia and Iran. For context, Brent Crude — the international oil price benchmark — is trading for circa $86 per barrel, a historically elevated price despite falling, in line with Shell's share price, as fears have mildly abated.
    On the other hand, the war is continuing to intensify. The Gazan-run health ministry now believes that more than 10,000 people have been killed in the territory since the war began a month ago, with Israel carrying out one of its heaviest bombardments of the Strip last night.
    The Israeli military now considers it has effectively divided Gaza into two — and all major UN agencies have issued a rare joint statement calling for a humanitarian ceasefire arguing that ‘enough is enough.’
    Shell shares: Q3 results
    The FTSE 100 oil major reported earnings of $6.22 billion between July and September, up sharply compared to the previous quarter of $5 billion and just shy of the company-provided analyst expectations of $6.25 billion. However, these earnings were also down by over a third compared to the $9.45 billion of Q4 2022, when oil and gas prices surged in response to Russia’s invasion of Ukraine.
    While BP was hit by weak gas trading results, Shell’s earnings were supported by ‘favourable’ LNG trading, which rose quarter-on-quarter. However, production at its integrated gas division fell by 9%, partially due to maintenance at its Prelude LNG production facility off the coast of Australia.
    Shell plans to return another $3.5 billion to shareholders over the next three months through its share buyback programme, a rise from the $2.7 billion of the last quarter — bringing the total for 2023 to $23 billion. The dividend remains unchanged at $0.331 per share.
    Oil price rises?
    While oil prices have cooled slightly, geopolitical risks could remain elevated, especially with the Ukraine war continuing to rage. Indeed, the World Bank has warned that if war in the Middle East also escalates, crude oil could almost double to $150 per barrel.
    For perspective, OPEC+ members, led by Russia and Saudi Arabia, decided on Sunday to continue with voluntary production cuts until the end of the year. Saudi is continuing to cut an additional 1 million barrels per day, and Russia an additional 300,000. Moscow has blamed Western ‘influence with market dynamics,’ referring to the cap on Russian oil that acts as part of sanctions on the country.
    FTSE 100 long term strategy
    While larger operators in the US — including Chevron and Exxon — have made headlines recently for acquiring smaller oilers within multi-billion-dollar deals, Shell CEO Wael Sawan has shied away from an acquisition strategy, preferring the traditional share buybacks.
    In addition, the company has tightened the upper range of its capital spending target in 2023 to between $23 billion and $25 billion, from $23 billion to $26 billion previously. The CEO is also changing strategic direction, with a focus on higher-margin projects and growing its natural gas production.
    To achieve this within the confines of its capex target, the company is cutting at least 15% of employees at its low-carbon division and scaling back the hydrogen business. For context, Shell noted that most of its renewables business remained loss-making in Q3. However, the cutbacks have sparked some public concern from employees.
    Overall, the company remains close to a record high, and yet still boasts a price-to-equity ratio of less than 8. Accordingly, solid results could see Shell shares could continue to rise through the FTSE 100.
    But remember, 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.
  5. MongiIG
    A brief description of ETFs and five of the best ETFs for UK investors to consider in Q1 2024. These ETFs are selected for their widespread popularity — though this does not equivalate positive performance.
    Source: Bloomberg   Forex Indices Shares Commodities ETF Investment
     Charles Archer | Financial Writer, London Investing in Exchange Traded Funds (ETFs) is an incredibly popular trading strategy, especially among newer investors. ETFs allow you to buy into a ‘basket of securities’ based on a specific sector or investing approach, without having to buy the assets individually.
    Investing in an ETF allows for increased exposure to a diversified range of investments, the trading liquidity of equity instead of the rigidity of a mutual fund, and the ability to manage risk by trading futures just like an individual stock.
    Of course, ETFs can contain all sorts of investments, from stocks to commodities to bonds. Other than the convenience, ETFs usually offer low expense ratios and lower broker commissions than buying the constituent assets individually.
    And with inflation still high, a potential recession inbound, and uncertainty soaring, the diversification of ETFs appears more attractive than ever.
    However, it’s worth noting that an ETF will only ever perform as well as its underlying constituents. We do offer an ETF screener that can help to inform your investing decisions. But remember, past performance is not an indicator of future returns.
    Best UK ETFs to watch
    1. Vanguard FTSE All-World UCITS ETF
    This exchange traded fund is one of the most popular in the world, as it aims to track the performance of the FTSE All-World index, made up of large and mid-sized companies in both developed and emerging markets.
    This index offers possibly the most diversified portfolio of stocks possible, providing exposure to almost 4,000 companies from across 50 countries at a low annual fee.
    However, it does have a geographical bias, with 60% of companies in the ETF based in the US. And because of the relative size of the US tech giants, the FTSE All-World’s biggest sector is usually technology — which can be volatile given the sensitivity of tech stocks to monetary policy. Further, over the longer term the index is usually beaten by the S&P 500.
    But it’s worth noting the benefits of diversification — investors may wish to protect themselves from unpredictable global events, such as the occasional US stock market bubble, and also benefit from emerging markets.
    2. iShares S&P 500 Information Technology Sector ETF
    This ETF seeks to track the performance of an index composed of U.S. Information Technology Sector companies as defined by the Global Industry Classification Standard. It boasts diversified exposure to titanic US tech stocks including top holdings Apple, Microsoft, and NVIDIA — but with the caveat that it only invests in the US.
    US information technology stocks have recovered significantly across 2023 — rates across the pond may have peaked amid hopes that generative AI could drive further capital growth. Of course, as noted above, tech shares — even the blue chips — are more volatile than other sectors.
    3. WisdomTree Brent Crude Oil ETF
    The WisdomTree Brent Crude Oil ETF is designed to closely track the Bloomberg Brent Crude subindex, collateralised by swaps held with the Bank of New York Mellon. Buying shares in this popular ETF gives investors exposure to Brent Crude, globally recognised as the most popular oil benchmark, which is based on oil drilled in the North Sea.
    Oil prices remain elevated as a result of post-pandemic demand, alongside wars in Ukraine and the Middle East. In particular, some investors fear that if Iran enters into a regional conflict with Israel, the ‘world’s oil chokepoint, the Strait of Hormuz, could be closed.
    4. iShares UK Dividend UCITS ETF
    The iShares UK Dividend UCITS ETF is a selective ETF which focuses on the most appealing strength of the some of the best FTSE 100 companies — reliable dividend returns.
    Instead of investing in all 100 companies in the UK’s premier index, it instead offers diversified exposure to the top 50 UK companies within the FTSE 350 with the highest dividend yield (excluding investment trusts). Of course, there are risks — dividends are not guaranteed and cyclical companies like Rio Tinto or Barratt can see dividend yield fall fast in poor years.
    Many investors look to pair this fund with a NASDAQ 100 index tracker ETF, allowing for some exposure to growth for a balanced portfolio.
    5. Invesco Physical Gold ETC
    Invesco Physical Gold ETC seeks to replicate the performance of the London Gold Market Fixing Ltd PM Fix Price/USD, with the fund backed one-to-one with gold bullion held by JP Morgan Chase in London bank vaults.
    Gold continues to flirt with near-record $2,000/oz levels, as the traditional real asset inflation-hedge, which preserves purchasing power and acts as a protective asset in times of severe market stress, once again performs admirably in this inflationary environment.
    It’s worth noting that central banks bought a record 1,136 tons of the precious metal in 2022 and continue to buy huge amounts this year.
    And of course, gold’s price trades in an unofficial pair with the US Dollar; usually, rate rises tend to see gold fall as defensive investors seek the safe haven of the world’s reserve currency. However, gold has continued to rise even as rates increase, highlighting its attractiveness in the current environment.

        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.
  6. 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 6 November
    Chris Beauchamp's insight
    After the busy weeks of late October and early November, calm descends. Most major companies have reported in the US, though Disney and Uber will be worth watching. In the UK, pharmaceutical giant AstraZeneca updates the market with third quarter (Q3) figures. The key event of the week may be the Australian rate decision, with rates expected to rise again, in contrast to other major central banks that have left rate unchanged.
      Economic reports
    Weekly view Monday
    3pm – Canada Ivey PMI (October): expected to fall to 52.1. Markets to watch: CAD crosses

    Tuesday
    3am – China trade data (October): exports to fall 5% year-on-year (YoY), from a 6.2% drop a year ago. Markets to watch: CNH crosses
    3.30am – RBA rate decision: rates forecast to rise to 4.35%. Markets to watch: AUD crosses
    1.30pm – US trade balance (September): exports to rise to $261 billion. Markets to watch: USD crosses

    Wednesday
    None

    Thursday
    1.30am – China CPI (October): prices to rise 0.2% YoY from 0%, and 0.2% MoM, in line with last month. Markets to watch: CNH crosses
    1.30pm – US initial jobless claims (w/e 4 November): claims to fall to 220K. Markets to watch: USD crosses

    Friday
    7am – UK GDP (Q3, preliminary): growth expected to be -0.1% quarter-on-quarter (QoQ) and -0.6% YoY. Markets to watch: GBP crosses
    3pm – US Michigan consumer sentiment (November): index forecast to rise to 65. Markets to watch: USD crosses
      Company announcements
     
    Monday
    6 November
    Tuesday
    7 November
    Wednesday
    8 November
    Thursday
    9 November
    Friday
    10 November
    Full-year earnings
      Assoc. British Foods   WHSmith   Half/ Quarterly earnings
    Ryanair UBS,
    eBay,
    Uber Marks & Spencer,
    Airbus,
    Bayer,
    Adidas,
    Credit Agricole,
    Lyft,
    Disney AstraZeneca,
    Tate & Lyle,
    National Grid,
    WeWork Allianz Trading update*
      Persimmon,
    Direct Line,
    Hilton Food,
    Metro Bank JD Wetherspoon,
    ITV Taylor Wimpey,
    Flutter,
    Vistry    
        Dividends
    FTSE 100: HSBC, Airtel, BP, Sainsbury’s
    FTSE 250: Sthree, Genus, Softcat, C&C, Greencoat UK Wind, Target Healthcare
    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
    6 November Tuesday
    7 November Wednesday
    8 November Thursday
    9 November Friday
    10 November Monday
    13 November FTSE 100     10.80       Australia 200 0.2 0.1 8.3   3.1 9.0 Wall Street   3.4 18.1 1.6 3.2   US 500 0.08 0.21 0.85 0.66 0.27 0.95 Nasdaq     2.33 2.23 0.94 1.07 Netherlands 25         0.1   EU Stocks 50           0.9 China H-Shares             Singapore Blue Chip           0.84 Hong Kong HS50     19.8       South Africa 40   10.3         Italy 40             Japan 225            
  7. MongiIG
    The US economy is forecast to have created 180,000 jobs in October; the unemployment rate is seen holding steady at 3.8% and weak NFP report would be bearish for the US dollar.
      Source: Bloomberg
      Forex United States dollar Federal Reserve GBP/USD Pound sterling EUR/USD
    IG Analyst | Publication date: Friday 03 November 2023 05:21 Markets keep a watchful eye on US job numbers
    Wall Street will be on high alert Friday morning when the US Bureau of Labor Statistics publishes its most recent employment survey. With the potential to alter the Federal Reserve's monetary policy outlook, this report is set to draw substantial attention and scrutiny, possibly resulting in greater market volatility heading into the weekend.
    Consensus forecasts suggest that US employers increased payrolls by 180,000 in October, following the addition of 336,000 jobs in September. Separately, household data is expected to reveal that the unemployment rate remained unchanged at 3.8%, highlighting the persistent tightness in labor market conditions.
    Focusing on compensation, average hourly earnings are seen rising 0.3% monthly, which would result in an annual reading of 4.3%. For the Federal Reserve, pay growth is a critical metric, serving as an indicator of inflationary trends. Therefore, it is of utmost importance to observe the progression of wages in the broader economy and assess their compatibility with the 2.0% inflation target.
    Upcoming us labor market data
      Source: DailyFX
    Possible market scenarios
    Fed Chair Powell has maintained the possibility of additional policy tightening for the current cycle, but has not firmly embraced this scenario, pledging to proceed carefully in the face of growing uncertainties. This suggests that policymakers will rely heavily on incoming information to formulate future decisions.
    Looking at implied probabilities, the odds of a quarter-point rate rise at the December Fed meeting sits at roughly 20% at the time of writing. Market pricing has been in a state of flux lately, but the likelihood of another hike could rise materially if payroll numbers beat projections by a wide margin. Any NFP headline figure above 275,000 could have this effect on expectations.
    Generally speaking, a very hot employment survey could spark a hawkish repricing of the Fed’s policy path, creating the right conditions for US Treasury yields to resume their ascent after their recent pullback. This scenario could give the US dollar a boost against its top peers such as the euro and the British pound.
    On the other hand, if hiring activity disappoints and confirms that the economic outlook is deteriorating, rates could continue their retrenchment, sending the broader US dollar lower. This scenario would be supportive of EUR/USD and GBP/USD, allowing both pairs to extend their nascent recovery. Anything below 100,000 jobs should be bearish for the American currency.
    FOMC meeting probabilities chart
      Source: FedWatch Tool
    EUR/USD technical analysis
    EUR/USD rebounded on Thursday amid broad-based US dollar weakness, but fell short of taking out overhead resistance stretching from 1.0670 to 1.0695. For confidence to improve further, we need to see a clear and clean move above 1.0670/1.0695 in the coming days. If this scenario unfolds, the bullish camp may reassert dominance, paving the way for a rally towards 1.0765, the 38.2% Fibonacci retracement of the July/October selloff.
    On the other hand, if sellers regain the upper hand and drive prices below trendline support at 1.0535, downward momentum could intensify, opening the door for a drop toward the 1.0450. Below this region, the next area of interest is located at 1.0355.
    EUR/USD technical chart
      Source: TradingView
    GBP/USD technical analysis
    The British pound has been weakening against the US dollar since mid-July, with GBP/USD steered to the downside by a well-defined bearish trendline and marking impeccable higher lows, and lower lows during its slide. Earlier in the week, cable made a push towards trendline resistance at 1.2200, but failed to clear it decisively, a sign that the bulls have not yet developed the necessary momentum for a breakout.
    For a clearer picture of the short-term prospects for GBP/USD, it's vital to assess how prices behave around crucial levels over the next few days, taking into account two potential scenarios.
    Scenario one: Breakout
    If cable manages to breach dynamic resistance at 1.2200, we could see a move towards 1.2330. On further strength, the focus shifts to the 200-day simple moving average near 1.2450.
    Scenario two: Bearish rejection
    If cable gets repelled lower from its current position, the pair could head toward its yearly lows at 1.2075, where the 38.2% Fibonacci retracement of the 2022/2023 rally aligns with several swing lows. Maintaining this technical support is of utmost importance; any breach could trigger a decline towards the 1.1800 handle.
    GBP/USD 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.
  8. MongiIG
    What are the key takeaways from the recent Federal Open Market Committee (FOMC) meeting?
    Source: Bloomberg   Forex Indices Federal Reserve Federal Open Market Committee United States dollar United States  
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 02 November 2023 03:12 Market Recap
    The Federal Reserve (Fed) has kept its benchmark interest rate unchanged at 5.25%-5.50% at its latest meeting, which has been fully priced by markets and should come as little surprise. In light of the absence of fresh economic projections at this meeting, the large triggers for market moves revolved around Fed Chair Jerome Powell’s words and the Fed statement.
    In the Fed statement, the central bank acknowledged the strength in economic activity in the third quarter, but also newly recognised the tighter financial conditions, likely as a reference to the recent run-up in US longer-term Treasury yields. This has been in line with the significant shift in rhetoric among US policymakers over the past weeks, whereby the appetite for rate hikes has softened with the view that surging Treasury yields may have carry the work of tightening.
    In the press conference, Fed Chair Jerome Powell guided that the risks of doing too much to bring down inflation versus doing too little are getting more balanced, reflecting an increasing shift in attention towards economic conditions and probably the need to assess the cumulative effect of tighter monetary policy for longer.
    While he kept the door open for additional hike if inflation progress stalls, the stance has carried more ambiguity with emphasis on data-dependency, which fed market views that the Fed may already be at the end of its hiking cycle. The messaging for a prolonged pause ahead was retained with the usual pushback against rate cuts, but markets are likely accustomed to it given the upside move in longer-term Treasury yields since August this year.
    US dollar struggles at resistance
    The aftermath of the Fed meeting saw US 10-year Treasury yields retracing further from its key psychological 5% level to a two-week low, dragging the US dollar 0.3% lower overnight. Having traded within a tight range over the past month, some indecision remains in place, with stalling upside momentum reflected in the declining moving average convergence/divergence (MACD) on the daily chart.
    A retest of the 106.80 level of resistance overnight was met with a bearish rejection, which could leave the 105.00 level on watch as immediate support on further downside. For now, the broader upward trend could remain intact, with the dollar still above its Ichimoku cloud support on the daily chart, alongside various moving averages (MA) (50-day, 100-day, 200-day). Greater conviction for a shift in trend to the downside may have to come from a breakdown of these key support lines.
     
    Source: IG charts  
    Nasdaq 100 continues to bounce off channel support
    The Nasdaq 100 has been the only major US index still trading above its 200-day MA. With the overnight dip in Treasury yields, the rate-sensitive Nasdaq has found its way higher by 1.6%, outperforming both the DJIA (+0.7%) and S&P 500 (+1.1%).
    A falling channel pattern seems to be in place since July this year, with the index bouncing off the lower channel trendline support lately around the 14,200 level. A bullish crossover was displayed on daily MACD, while its relative strength index (RSI) is attempting to cross above its key 50 level. Further upside may leave a retest of the 15,100 level in sight next, where the upper channel trendline resistance stands alongside its Ichimoku cloud resistance on the daily chart.
     
    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.
  9. MongiIG
    Latest price gains entice retail trader buys taking the majority long bias lower and closer to that of CoT speculators.
      Source: Bloomberg
      Indices Forex Federal Open Market Committee Nasdaq Speculation Nasdaq-100
     Monte Safieddine | Market Analyst, Dubai | Publication date: Thursday 02 November 2023 07:57 Sign up for IG's Daily and Weekly Market Report to receive this information and more, in an elaborate and comprehensive report recounting the forex majors, commodities and indices before the European open.
    FOMC holds rates, but what lies ahead?
    The latest Federal Open Market Committee (FOMC) decision was to hold on rates again as anticipated, in its statement noting "strong pace" for third-quarter economic activity as well tighter financial conditions. Its Chairman Powell thereafter failed to give any indication on December’s decision.
    Data disappointments: a 'bad news is good news' scenario
    Prior to that was a plethora of US economic data that generally disappointed favoring the ‘bad news is good news’ theme.
    ADP’s (Automatic Data Processing) non-farm estimate for October a miss showing 113K growth compared to 149K forecasts The Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) for the same month deteriorated further into contracting territory, registering a reading of 46.7, down from the expected 49. There was a notable drop in new orders, which fell to 45.5, and its employment component also contracted, declining from 51.2 to 46.8 The weekly mortgage applications out of MBA falling again with a -2.1% reading, and the exception Job openings out of JOLTS a beat at 9.55m for the month of September. Treasury's quarterly refunding
    There was also the Treasury’s quarterly refunding announcement where upcoming supply was lighter than anticipated and skewed away from the further end a sigh of relief for the bond market.
    Yields drop and tech outperforms
    The results from the above three sent Treasury yields notably lower, and so too in real terms. Another small pullback for breakeven inflation rates, and market pricing (CME's FedWatch) favors a hold from the Federal Reserve with a small minority expecting a hike. The first rate cut from current levels is anticipated by the majority for June of next year.
    For the stock market, most sectors finished yesterday's session in the green. Thanks to the pullback in yields, tech, communication, and consumer discretionary sectors outperformed by a decent margin. These sectors are crucial for powering the tech-heavy Nasdaq 100 index, which had an outperforming finish against both the S&P 500 and Dow 30.
    We've got the weekly claims, factory orders, and earnings from the heaviest component, Apple, today before attention shifts to the market-impacting non-farm payrolls tomorrow and services PMIs.
    Nasdaq technical analysis, overview, strategies, and levels
     
    The strong gains propelled the price past its previous 1st Resistance level, which initially held on a couple of occasions. This triggered and favored conformist sell-after-significant reversals before the subsequent moves eventually led it to its 2nd Resistance level, ultimately giving the contrarian buy-breakouts the upper hand. Price-indicator proximity indicates that minor shifts could impact key technical indicators significantly.
    Additionally, a broad bear channel implies that if the price continues its ascent, it may occasionally deviate from the 'bear average' technical overview. This suggests ongoing caution for conformist strategies that involve selling into these gains.
      Source: IG
    IG client* and CoT** sentiment for the Nasdaq
    As for sentiment, retail traders aren’t complaining given they held a majority buy 61% bias prior to the event, since then dropping to a slight long 54% as of this morning. They aren’t too far off CoT speculators according to last Friday’s report, who have themselves pulled back into slight buy territory.
      Source: IG
    Nasdaq chart with retail and institutional sentiment
      Source: IG
     
    *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
        This information has been prepared by IG, a trading name of IG 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.
  10. 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 30 October
    Chris Beauchamp's insight
    Earnings season, heightened tensions in the Middle East and a plethora of central bank decisions by the likes of the Bank of Japan (BoJ), Federal Reserve bank (Fed) and Bank of England (BoE) will dominate the calendar this week ahead of Friday’s all-important US Non-Farm Payrolls. Eurozone and German preliminary quarter 3 (Q3) gross domestic product (GDP) and consumer price index (CPI) might also keep volatility at its recent elevated levels.
     
      Economic reports
    Weekly view Monday
    1pm – German inflation (October (preliminary): prices expected to rise 4% Year-over-year (YoY). Markets to watch: EUR crosses

    Tuesday
    1.30am – China PMI (October): previous readings were 50.2 for manufacturing and 51.7 for non-manufacturing. Markets to watch: CNH crosses
    3am – BoJ rate decision: rates expected to remain at -0.1%. Markets to watch: JPY crosses
    8am – German GDP (Q3, flash): growth forecast to be -0.1% Quarter on quarter (QoQ) and -0.3% YoY. Markets to watch: eurozone indices, EUR crosses
    10am – eurozone GDP (Q3, flash): QoQ growth forecast to be 0.4% and YoY to be -0.3%. Markets to watch: EUR crosses
    2pm – US consumer confidence (October): index forecast to fall to 100. Markets to watch: USD crosses

    Wednesday
    1.45am – China Caixin manufacturing PMI (October): previous reading 50.6. Markets to watch: CNH crosses
    12.15pm – US ADP employment report (October): previous reading 89K. Markets to watch: USD crosses
    2pm – US ISM manufacturing PMI (October): forecast to remain at 49. Markets to watch: USD crosses
    2.30pm – US EIA crude oil inventories (w/e 27 October): stockpiles rose by 1.37 million barrels in the previous week. Markets to watch: Brent, WTI
    6pm – US Fed rate decision: rates expected to remain at 5.5%. Press conference at 6.30pm. Markets to watch: US indices, USD crosses

    Thursday
    12pm – Bank of England rate decision: no change in rates from current 5.25% expected. Markets to watch: GBP crosses
    12.30pm – US initial jobless claims (w/e 28 October): jobless claims rose by 10,000 to 210,000 in the previous week. Markets to watch: USD crosses

    Friday
    1.45am – China Caixin services PMI (October): previous reading 50.2. Markets to watch: CNH crosses
    12.30pm – US non-farm payrolls (October): 172K jobs expected to have been created, down from 336K in September. Unemployment rate to remain at 3.8%. Average hourly earnings to rise 0.3% Month-on-Month (MoM). Markets to watch: US indices, USD crosses
    12.30pm – Canada employment data (October): unemployment rate to hold at 5.5%. Markets to watch: CAD crosses
    2pm – US ISM services PMI (October): index to fall to 52.1. Markets to watch: US indices, USD crosses
      Company announcements
     
    Monday
    30 October
    Tuesday
    31 October
    Wednesday
    1 November
    Thursday
    2 November
    Friday
    3 November
    Full-year earnings
       
     
     
     
    Half/ Quarterly earnings
    HSBC BP
    Aston Martin Lagonda,
    GSK
    Shell,
    Trainline,
    BT Group,
    Sainsbury’s
     
    Trading update*
    Pearson,
    Glencore
     
     
     
    Next
    Entain,
    Haleon
     
     
        Dividends
    FTSE 100: Whitbread
    FTSE 250: ME Group, Ashmore, Hilton Food, Renishaw, PZ Cussons, Tritax Big Box
    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
    30 October Tuesday
    31 October Wednesday
    1 November Thursday
    2 November Friday
    3 November Monday
    6 November FTSE 100     0.27       Australia 200 0.1       0.2   Wall Street         0.8   US 500 0.28 0.02 0.28 0.20 0.13 0.09 Nasdaq   0.17 0.58 0.26 0.80   Netherlands 25   0.27         EU Stocks 50 2.8 0.8         China H-Shares     0.5       Singapore Blue Chip 0.08 0.07 0.05       Hong Kong HS50     0.8   8.7   South Africa 40             Italy 40             Japan 225            
  11. MongiIG
    Begbies Traynor, Ascential, and easyJet could be the best FTSE 250 shares to watch next month. These shares are selected for recent market news.
    Source: Bloomberg   Indices Shares Insolvency United Kingdom Tax Digital economy
     Charles Archer | Financial Writer, London Down 10.3% year-to-date, the FTSE 250 has been irregularly falling since hitting 24,195 points in early September 2021, to just 17,165 points today.
    The UK’s domestically focused index is highly sensitive to the country’s changing fiscal and monetary policy — and while there is more nuance — the bottom line is that the Bank of England base rate has risen from 0.1% to 5.25% over the past couple of years, while corporation tax for larger companies has jumped from 19% to 25%.
    And further volatile macroeconomic changes are coming up in November.
    First, there’s the Monetary Policy Committee meeting on 2 November to decide where rates go next, then the CPI inflation reading on 15 November, followed by the Autumn Statement on 22 November. This statement — among other things — is rumoured to include changes to ISA products that will likely benefit UK investors, after a period of tax rises and allowance cuts.
    Accordingly, it’s worth considering that the economic picture may change markedly over the next few weeks. But for now, here’s three of the best FSTE 250 shares to watch — all of which have seen recent news.
    1. Begbies Traynor
    Begbies Traynor is an insolvency expert specialising in corporate restructuring. In recent full-year results, it saw another ‘successful year of continued growth with results ahead of original market expectations.’
    Revenue grew by 11% year-over-year, free cash flow hit £14.1 million, the dividend increased by 9% to 3.8p for the year, the sixth year of increases in a row. The FTSE 250 company remains confident of ‘a further year of growth in line with market expectations... (with a) strong order book of insolvency revenue (up 19% in the year), driven by continued increase in insolvency market volumes.’
    Today, the firm has released analysis prepared by Red Flag showing that the number of firms in ‘critical financial distress’ — defined as having county court judgements exceeding £5,000 — has jumped by 25% to nearly 38,000 businesses over the past three months.
    Regional Managing Partner Julie Palmer notes that ‘tens of thousands of British companies are now in financial dire straits now that the era of cheap money is firmly behind us.’
    Further, The UK Insolvency Service has announced that the last two quarters have seen the highest quarterly insolvency numbers since Q2 2009, alongside the highest number of creditors’ voluntary liquidations since 1960.
    Begbies shares have fallen by 21.7% year-to-date, but this may be a chance to buy the dip.
    2. easyJet
    easyJet shares have fallen by 23.7% over the past six months, including a sharp fall even after reporting its positive Q4 results. The FTSE 250 airline delivered record Q4 profit before tax, expected to be between £440 million and £460 million, while passenger numbers increased by 8% and ticket yields by 9%.
    The mid-cap company expects that capacity will grow by circa 15% in Q1 and has set a medium-term target to deliver more than £1 billion of profit before tax. To deliver this growth, easyJet has confirmed 157 ‘firm orders’ for additional aircraft, with a further 100 ‘purchase rights’ — which could see the fleet almost double in size to 587 aircraft over the next decade.
    The company is also promising to restart dividends, and it’s perhaps this dual ambition which is sending shares lower — usually, companies focus either on capital growth or shareholder returns.
    Of course, there are other issues brewing in the background. Over the past few months, air traffic control strikes, wildfires in Greece, and seemingly endless UK technical IT glitches have all helped to pile pressure on easyJet’s share price. And then there’s fears that the Israel-Hamas war could escalate into a regional conflict; an outcome that the World Bank thinks could send oil to $150.
    However, the airline is well hedged for jet fuel over the medium term — and better hedged than competitor IAG. This could see shares recover over the next month as investors consider the long-term outlook.
    3. Ascential
    UK-based data and technology company Ascential rose sharply after announcing that it now plans to offload two divisions to focus on its events business. The small cap tech sector has been significantly impacted by rising rates — and the numbers achieved for these assets may have taken the markets by surprise.
    US-listed advertising titan Omnicom is spending £741 million on Ascential’s digital commerce business, while private equity-founded Wind UK Bidco 3 is buying the product design segment for up to £700 million. This will yield a combined enterprise value of circa £1.4 million and cash proceeds of £1.2 billion.
    Ascential plans to return £850 million to shareholders, and thereafter focus solely on events such as the Money 20/20 fintech conference in Las Vegas or the Cannes Lions marketing festival. The company has been undergoing a strategic review since April 2022, and this step forward could unlock significant value.
    CEO Duncan Painter enthuses that ‘Omnicom's and Digital Commerce's complementary technology and data platforms, together with their strong client relationships will be instrumental in accelerating the realisation of Digital Commerce's strategy, and WGSN is also well set for its next chapter of growth under new ownership. Ascential's continuing business with its world-leading Events brands remains well-positioned to succeed as a high quality, independent UK-listed business.’
    Ascential shares have fallen since their peak yesterday, perhaps marking an opportunity for high-risk investors.
    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.
  12. MongiIG
    What's in store for The Walt Disney Company's upcoming Q4 earnings report on November 8, 2023? From Disney+ subscriber counts and theme park performance to Wall Street expectations, here's what investors need to know.
      Source: Bloomberg
      Shares The Walt Disney Company Streaming media Hulu Disney+ Hotstar Disney Parks, Experiences and Products  
     Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 31 October 2023 08:00 The entertainment giant at a glance
    Walt Disney Co. is one of the world's largest and most well-known entertainment conglomerates. Its business divisions include media networks, theme parks and resorts, studio entertainment, music, consumer products, and interactive media.
    Walt Disney is scheduled to report its full-year and fourth-quarter (Q4) earnings after the market closes on Wednesday, 8 November 2023.
    The rocky road of Q3: a mixed bag
    Walt Disney's Q3 results were mixed, impacted by declining streaming users and substantial restructuring costs.
    "Our results this quarter are reflective of the unprecedented transformation we're undertaking to restructure the company, improve efficiencies, and restore creativity to the centre of our business," said Robert A. Iger, Chief Executive Officer.
    Disney+ and the subscribers saga
    The company noted that subscribers had fallen to 146.1 million for Disney+ during the most recent quarter, a 7.4% decline from the previous quarter. Most of the subscriber losses came from Disney+ Hotstar after it lost the rights to Indian Premier League cricket matches.
    A silver lining: parks and experiences
    The Parks, Experiences and Products division saw a 13% increase in revenues to $8.3 billion during the quarter, driven by strength in its international parks.
    Facing declining users and revenues, Disney announced it would follow in the footsteps of streaming rival Netflix by raising the price on its ad-free streaming tier and cracking down on password sharing.
    The company elected to keep the price stable on its ad-supported tier. Reports suggest that half of Disney's streaming platform users are on the ad-supported tier, which has increased engagement by 35% since March.
    A snapshot of Walt Disney's Q3 results
        Source: Walt Disney
    Key investor focus areas: Hulu's future and ESPN's sale
    The market is expecting to hear that Disney added 3.1 million subscribers, which, combined with higher prices, should bolster the streaming division Investors will be keen to assess the impact of cost-of-living pressures on attendance at parks, including Disney's flagship park, Disney World in Florida Investors will focus on plans for streaming service Hulu, which is two-thirds owned by Disney and the remainder by Comcast Investors will seek information on plans to sell specialty sports network ESPN after Disney recently released standalone financials for ESPN.  
    Key financials - summary
    Wall Street's expectations for the upcoming results are as follows:
    Earnings per share: $0.72 adjusted vs $1.03 in Q3 Revenue: $21.42 billion vs $22.33 billion in Q2 Walt Disney's revenue chart
     
      Source: TradingEconomics
    Disney technical analysis
    Walt Disney's share price has fallen over 60% from its March 2021 high of $203.02 to last week's closing price of $79.33. Four weeks ago, it briefly fell below its COVID-19 crash low of $79.07 to $78.73, its lowest level since October 2014.
    Disney weekly chart
      Source: TradingView
    As viewed on the daily chart below, the share price of Disney has made fresh cycle lows after diving below support at $84.00 in late August. While it hasn't built acceptance below $80.00, it has been well capped by resistance at $86.20–$86.30.
    To alleviate downside risks, the Disney share price must recover above this resistance, coming from mid-September and mid-October highs. It also needs a sustained close above the 200-day moving average at $91.43 to set up a test of the resistance area at $100–$105. On the downside, the next support level is at $76.30–$74.30, dating from early 2014.
    Disney daily chart
      Source: TradingView
     
    TradingView: the figures stated are as of 30 October 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.  

       
    This information has been prepared by IG, a trading name of IG 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.
  13. MongiIG
    Apple is set to release its Q4 2023 earnings on November 3, facing market expectations of a slight revenue decline but an EPS rise. Will challenges in the China market and big tech sentiment affect its performance?
      Source: Bloomberg
      Shares Apple Inc. iPhone United States China Huawei    Yeap Jun Rong | Market Strategist, Singapore | Publication date: Monday 30 October 2023 08:59 When does Apple Inc. report earnings?
    Apple Inc. is set to release its Quarter Four (Q4) financial results on 3 November 2023, after the market closes.
    Apple’s earnings estimates
    Current market expectations are for Apple’s Q4 revenue to decline marginally by 1% year-on-year to US$89.3 billion, compared to US$90.1 billion a year ago.
    On the other hand, Earnings Per Share (EPS) is expected to be at US$1.39, up 7.7% year-on-year and 10.3% from the previous quarter. Its Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margin is expected to improve to 32.2%, up slightly from the previous quarter’s 31.9%.
    Market impact of Apple's earnings
    Being one of the "Magnificent Seven" stocks, which account for the bulk of the US indices’ gains year-to-date, its upcoming earnings may play a crucial role in determining the indices' trend into year-end.
    Historical performance
    Apple generally has a strong record of outperforming, only failing to meet earnings estimates once over the past 20 quarters. That said, the recent sell-off in big tech share prices, despite delivering top and bottom beats, indicates that market participants also have high expectations as to whether current earnings momentum can be maintained.
    Historical revenue and EPS chart
     
    Source: Refinitiv Challenges in the Greater China market
    The Greater China market accounted for one-fifth of Apple’s revenue last year. Thus far, there isn't much conviction that demand on that front can hold up. A report from Counterpoint Research suggests that iPhone 15 sales for the first 17 days in China have underperformed last year’s iPhone 14 sales (an estimated 4.5% lower). Unit sales of the higher-end Pro Max and Pro models are down 14% and 11% year-on-year, respectively.
    Competition from Huawei
    Apart from attributing the weaker iPhone demand to cautious Chinese consumers, Huawei’s newly launched Mate 60 series has also proven to be strong competition. Reports suggest that Huawei’s smartphone sales growth has increased 37% year-on-year in Q3 2023 (versus Apple’s estimated 10% decline), as its new Kirin chips, launched as a response to US tech sanctions, seem to be well-received.
    Positive signs in the US market
    On the other end of the globe, reception for the iPhone 15 series in the US (Apple's main market) may offer some cushion, with estimated double-digit increases from a year ago. Current expectations are that the overall net effect may still drive a slightly lukewarm 2.4% year-on-year increase in iPhone revenue for the Q3 2023 results.
    Hardware performance overview
    Conversely, other hardware products are expected to weigh longer, with further contraction anticipated year-on-year (estimated iPad -14.6%, Mac -24.7%, other products -2.2%).
    Source: Refinitiv Services business: a bright spot
    Unsurprisingly, expectations are for growth in Apple’s services business to continue accelerating to 11.4% year-on-year in Q3 2023, up from the previous quarter’s 8.2%. This segment has been Apple's crown jewel in recent years, being its highest-growth and highest-margin business, along with a recurring revenue model. It includes subscriptions, warranties, licensing fees, and Apple Pay.
    Upcoming products and innovations
    Any guidance around Apple's growth catalysts will also remain under scrutiny to diversify the company’s revenue stream away from iPhone sales (48.5% of total revenue) over the longer term. Apple has previously announced its Apple Vision Pro headset, expected to launch early next year.
    Focus on Artificial Intelligence
    More notably, Apple's work on generative Artificial Intelligence (AI) may be in greater focus. Given that the company is reportedly investing millions of dollars per day on multiple AI models across several teams, any fresh updates on generative AI tools, models, or services will be closely watched.
    Technical analysis
    Apple’s share price has broken below its Ichimoku cloud support on the daily chart back in August of this year, and subsequent attempts to reclaim this zone have been unsuccessful.
    Buyers will now face the challenging task of having to reclaim the 200-day MA to provide some conviction of near-term upside. Failing that, prices may potentially head lower to retest the US$161.04 level, where a near-term lower channel trend line may coincide with a key Fibonacci retracement level.
    Apple daily chart
    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.
  14. MongiIG
    Being one of the "Magnificent Seven" stocks which account for the bulk of the US indices’ gains year-to-date, its upcoming earnings may play a crucial role in determining the indices’ trend into year end.
    Source: Bloomberg   Shares Apple Inc. iPhone Revenue United States Artificial intelligence  
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Monday 30 October 2023 08:59 When does Apple Inc report earnings?
    Apple Inc is set to release its quarter four (Q4) financial results on 2 November 2023, after market closes.
    Apple’s earnings – what to expect
    Current market expectations are for Apple’s Q4 revenue to decline marginally by 1% year-on-year to US$89.3 billion versus US$90.1 billion a year ago.
    On the other hand, earnings per share (EPS) is expected to be at US$1.39, up 7.7% year-on-year and 10.3% from the previous quarter. Its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin is expected to improve to 32.2% as well, up slightly from the previous quarter’s 31.9%.
    Being one of the "Magnificent Seven" stocks which account for the bulk of the US indices’ gains year-to-date, its upcoming earnings may play a crucial role in determining the indices’ trend into year end.
    Apple generally has a strong record of outperformance, only failing to meet earnings estimates once over the past 20 quarters. That said, recent sell-off in big tech share prices despite delivering top and bottom beat reflects that market participants also have a high bar as to whether current earnings momentum can be maintained ahead.
     
    Source: Refinitiv  
    Apple’s hardware product sales may continue to struggle
    The Greater China market accounts for one-fifth of Apple’s revenue last year and thus far, there are not much conviction that demand on that front can hold up just yet. A report from Counterpoint Research suggests that iPhone 15 sales for the first 17 days of sales in China has underperformed last year’s iPhone 14 (an estimated 4.5% lower). Unit sales of the higher-end Pro Max and Pro are down 14% and 11% versus last year.
    Apart from attributing the weaker iPhone demand to cautious Chinese consumers, Huawei’s newly launched Mate 60 series has also proved to be strong competition. Reports suggest that Huawei’s smartphone sales growth has increased 37% year-on-year in Q3 2023 (versus Apple’s estimated 10% decline), as its new Kirin chips as a response to US tech sanctions seem to be well-received. If China’s recent efforts to restrict the use of iPhones for government officials and employees at state-owned enterprises were true, further US-China tech decoupling may remain a risk to China’s iPhone demand ahead.
    The bright side is that on the other end of the globe, reception for the iPhone 15 series in the US (Apple’s main market) may offer some cushion with estimated double-digit increases from a year ago. Current expectations are that the overall net effect may still drive a slightly lukewarm 2.4% year-on-year increase in iPhone revenue for the Q3 2023 results. On the other hand, other hardware products are expected to weigh for longer, with further contraction to be presented from a year ago (estimated iPad -14.6%, Mac -24.7%, other products -2.2%).
     
    Source: Refinitiv  
    Services business to remain the bright spot
    Perhaps not much of a surprise, in line with the prevailing trend, expectations are for the growth in Apple’s services business to continue accelerating to 11.4% year-on-year in Q3 2023, up from the previous quarter’s 8.2%. This segment has been the crown jewel for Apple in recent years, being its highest-growth and highest-margin business, along with a recurring revenue-generating model. It includes subscriptions, warranties, licensing fees and Apple Pay.
    Thus far, growth in its paid subscriptions continues to show strong momentum, rising by 150 million in the last year to surpass the one-billion mark and setting an all-time revenue record in the last reporting quarter.
    Guidance for growth catalysts on watch, but more for longer term
    Any guidance around Apple’s growth catalysts will also remain on watch to diversify the company’s revenue stream further away from iPhone sales (48.5% of total revenue) over the longer term. It has previously announced its Apple Vision Pro headset, which is expected to launch early next year.
    Apple is also tapping on its huge user base to include financial services as part of its ecosystem, offering a high-yield saving account program for Apple Card holders. Previous quarter’s guidance showed that customers were already making more than $10 billion in deposits.
    More notably, its work on generative Artificial Intelligence (AI) may be in greater focus. Given that the company is reportedly working on multiple AI models across several teams and investing millions of dollars per day, any fresh updates on any generative AI tools, models or services will be on close watch.
    Technical analysis – Trading below its 200-day MA for the first time since March 2023
    Apple’s share price has broken below its Ichimoku cloud support on the daily chart back in August this year and subsequent attempts to reclaim the cloud zone have been unsuccessful ever since. That seems to keep a downward bias intact for now, with its weekly Relative Strength Index (RSI) crossing below the key 50 level last week, while its closely-watched 200-day moving average (MA) has also given way.
    Buyers will now face the arduous task of having to reclaim the 200-day MA back in order to provide some conviction of near-term upside. Failing which, prices may potentially head lower to retest the US$161.04 level, where a near-term lower channel trendline may coincide with a key Fibonacci retracement level.
     
    Source: IG charts
       
    This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
  15. MongiIG
    The Israel-Hamas war, rising US Treasuries yield, high interest rates and weakening AI bubble could all be headwinds to consider.
    Source: Bloomberg   Indices Shares Commodities Nasdaq United States United States Treasury security
     Charles Archer | Financial Writer, London | Publication date: Wednesday 25 October 2023 18:36 The NASDAQ 100 index — comprising the 100 of the largest non-financial NASDAQ-listed stocks by market capitalization — has risen by circa 36% year-to-date. However, the index hit a 2023 peak of 15,841 points in mid-July and has now fallen by over 1,000 points to just 14,745.
    To put this performance into context: 2022 saw the tech-heavy index lose 32.4% of its value compared to the S&P 500’s 18.1% fall and the FTSE 100’s slight rise. As earnings season continues amid rising geopolitical tensions, here are four interlinked factors to consider for the index’s future performance:
    NASDAQ 100: four factors to watch
    1. Israel-Hamas war
    NASDAQ investors have good reason to worry that the war between Israel and Hamas could escalate into a regional war involving Saudi Arabia, Iran, and Lebanon.
    Most recently, UN Secretary General Antonio Guterres — while calling the attacks by Hamas ‘appalling’ — has come under fire from Israel for saying that they did not happen ‘in a vacuum’ as there had been ’56 years of suffocating occupation.’
    Meanwhile, fuel is close to running out in Gaza as Israel is preventing imports — though Israel also argues that Hamas is stockpiling hundreds of thousands of litres. Brent Crude remains elevated at circa $90 per barrel, reflecting fears that US sanctions on Iranian oil exports, or a closure of what the EIA calls the world’s most important oil chokepoint, the Strait of Hormuz, may occur.
    As a general rule, higher oil prices can have a negative effect on NASDAQ tech stocks.
    2. US Treasuries
    10 year US Treasury yields are now at 5% and this completely risk-free return is causing some alarm. To start with, US inflation may not be cooling — while the CPI rate may be at 3.7%, this is above the 3% reading of June and nearly double the official 2% target. Meanwhile US federal debt (the deficit) now stands at a whopping $33 trillion, up by $1.6 billion since the political showdown to increase the debt ceiling earlier this year.
    The US will need to sell more Treasuries to fund its current debt and finance even more at worse rates over the next few years.
    These risks could be weighing heavily on the NASDAQ 100.
    3. Interest rates
    Tied into the Treasuries debate, the federal funds rate is currently at 5.25% to 5.50%. The markets are currently pricing in a ‘higher for longer’ scenario and also at least one more hike.
    Of course, with inflation already proving to be stickier than expected, this may be an optimistic outlook — and any escalation in the Middle East that sends oil higher could see rates rise further than the market expects at present.
    The pandemic era of ultraloose monetary policy saw NASDAQ 100 stocks hit record highs, but the headache of tightening policy was also responsible for the bear market of 2022. Further rate hikes could well send NASDAQ 100 shares lower.
    4. The AI bubble
    The so-called ‘magnificent seven’ are responsible for much of the NASDAQ’s gains in 2023 — Microsoft, Alphabet, Meta, Amazon, Apple and Nvidia. These companies are arguably riding a wave of AI euphoria caused by generative AI disruptors such as ChatGPT.
    With the index becoming perhaps too one-sided, July saw a special rebalance where some of the weight assigned to the largest tech stocks was reassigned to smaller growth companies. Nvidia and Microsoft were most affected, each losing about three percentage points in terms of weighting.
    There is now evidence that some of the AI positivity is falling. Yesterday, Alphabet reported that Q3 revenue rose by 11.6% year-over-year to $76.69 billion, above analyst predictions of $75.9 billion — yet shares in the behemoth have fallen by 9.3% since.
    The company may be facing a landmark antitrust lawsuit from the US government amid a headcount reduction, but the bigger problem is potentially that the Cloud division only managed to generate $8.41 billion compared to expectations for $8.64 billion. For context, the division only started turning a profit in Q1 and has been running since 2008.
    With more upsets perhaps to follow, the NASDAQ 100 may have further to fall through Q4.

       
    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 BoJ is set to hold their monetary meeting across 30 – 31 October 2023, with market participants holding their breath for possible BoJ policy action.
    Source: Bloomberg   Forex Indices Bank of Japan Bond Inflation Japan
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 26 October 2023 04:36 What to expect at the upcoming Bank of Japan (BoJ) meeting?
    The BoJ is set to hold their monetary meeting across 30 – 31 October 2023, with wide consensus for its short-term interest rate target to be kept unchanged at -0.1% and for the 10-year bond yield around 0%.
    The key focus will revolve around whether the central bank will deliver further tweaks to its yield curve control policy (currently at a 1% upper limit) or any other policy adjustment, given the recent rise in Japan’s 10-year government bond yields to its decade high. Recent media report by Nikkei revealed that it will be a topic of discussion at the upcoming meeting, but there has not been a clear consensus among policymakers around the central bank’s next move or its timing just yet.
    Thus far, broad market expectations are priced for Japan to scrap its negative rates in the first half of 2024, still very much anchored by the BoJ Governor Kazuo Ueda’s previous comments of having enough data by this year-end to determine its rate outlook.
     
    Source: Refinitiv, as of 25 October 2023.  
    Upcoming meeting to be a ‘live’ one
    This week, the Japanese 10-year government bond yields witnessed a fresh decade high, with yields briefly touching the 0.875% level, almost double the 0.460% level just three months back. While there are still room before it tests the BoJ’s 1% upper limit, the relentless rise in Japan’s 10-year yields reflects some resilience to the six rounds of bond-buying operations by the BoJ since July 2023 and continues to reveal hawkish bets in place for further policy normalisation.
    The implied volatility for the 10-year government bonds futures has also witnessed a surge ahead of the upcoming meeting, suggesting that markets are expecting the meeting to be a ‘live’ one with possible BoJ policy action. Japanese Government Bond (JGB) futures are also back to retest its nine-year low, with broad positioning in place for potentially weaker bond prices.
     
    Source: TradingView Source: TradingView  
    Upcoming meeting to bring fresh forecasts on growth and inflation conditions
    Back in July this year, inflation forecasts for FY2023 and FY2024 were guided at 2.5% and 1.9% respectively, but current expectations are that these figures may be revised higher at the upcoming meeting. This follows after core inflation in Japan came in higher-than-expected in September for its third straight month, while oil prices have gained more than 20% since its July meeting. Market focus will revolve around policymakers’ views of whether an upward revision in the inflation forecasts may meet their condition of ‘sustainable inflation’ for a policy pivot.
    On the other hand, BoJ doves may still tap on the absence of an upward build in wage pressures to argue their case for more wait-and-see. Japan’s wage growth has softened to 1.1% in August, which marked its third straight month of moderation. The conflicting signs seem to make any policy move at the upcoming meeting harder to grasp, with a more even split in views likely to trigger volatility on any BoJ action (or inaction).
     
    Source: Refinitiv  
    USD/JPY: Respecting the intervention level of 150.00
    Rising US-Japan bond yield differentials have been supportive of USD/JPY’s upside, but recent moves for the pair has stalled around the key psychological 150.00 level – a level where Japanese authorities intervened back in October 2022 with US$42.4 billion of yen-buying to prop up the currency. A move similar to that of October 2022 was observed recently on 3 October 2023, where a retest of the 150.00 level was met with a strong sell-off of 280 pips within a span of minutes.
    The sharp move has raised speculations of possible intervention efforts by authorities and although it has not been acknowledged by Japanese officials, the 150.00 level is now looked upon as a line of caution for buyers, serving as a key resistance for the USD/JPY to overcome.
    Overall, the higher-highs-higher-lows formation since the start of the year still keeps an upward trend intact for now, with its daily Relative Strength Index (RSI) hovering above the key 50 level. Any success in reclaiming the 150.00 level may support a move towards the 152.00 level, while on the downside, any retracement may leave the 145.80 level on watch as immediate support.
     
    Source: IG charts  
    Nikkei 225: Attempting to find support from lower channel trendline
    The Nikkei 225 index has been guided by a falling channel pattern since June this year, with recent moves attempting to find support from the lower channel trendline at the 30,700 level. This level coincides with a 38.2% Fibonacci retracement from its January 2023 low to June 2023 high, which may support some views of a bullish flag formation still in place.
    Any signs of a quicker pivot from current accommodative policies at the upcoming meeting may translate to downside risks for the index, with any breakdown of the lower channel trendline support potentially paving the way to retest the 29,800 level next. On the upside, the upper channel trendline may serve as key resistance to overcome at the 32,400 level.
     
    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.
  17. MongiIG
    Explore how China's surprising 3.9% GDP growth in Q3 influences global markets and investor sentiment. Understand the ongoing geopolitical risks with the US and what Australia's renewed diplomatic efforts mean for trade.

    IG Analyst | Publication date: Wednesday 25 October 2023 05:30 Article by Juliette Saly (ausbiz)
    In this week's edition of IG Macro Intelligence, we delve into China's economic recovery and why one investment firm deems Sino-American geopolitical tension as a pivotal risk for markets.
    Economic outlook
    The world's second-largest economy is evidencing signs of a fiscal rebound. Official data reveals that China's Gross Domestic Product (GDP) expanded at a quicker-than-anticipated 3.9% YoY in the third quarter. Quarter-on-quarter, GDP growth accelerated to 1.3% from 0.5% in Q2.
      Source: Reuters, LSEG Data
    The figures suggest China may attain its 5% annual growth target, buoyed by recent governmental stimuli. Nonetheless, challenges persist.
    Domestically, China confronts an escalating property crisis, elevated youth unemployment, and flagging private sector confidence. Globally, China faces the headwinds of a global economic deceleration and continuing tensions with the U.S.
    Geopolitical risks
    Sino-American relations in the realms of trade and technology continue to pose risks for investors. BlackRock's Geopolitical Risk Indicator has surged to its zenith in a year, signifying mounting market apprehension about geopolitical matters.
      Source: BlackRock
    BlackRock cites the “strategic competition” between Washington and Beijijng as the top geopolitical risk facing markets in its latest report. The investment firm labels the tensions as an “attention score” of 1.5; which is higher than the market risk it sees caused by a major terror attack or major cyber attack.
    By contrast, the attention score given to tensions in the Gulf exacerbated by the Israel-Hamas war is -0.65. An escalation in the Russia-NATO conflict has an attention score of 0.37.
      Source: BlackRock
    Taiwan as the nexus of geopolitical tensions and volatility
    The report authors identify Taiwan as a crucial geopolitical flashpoint. They state, "The US is offering enhanced military and economic backing to Taiwan, while China manifests a readiness to exert pressure on the island. Military action is not anticipated in the near term, yet the risk appears to be escalating. A pivotal event will be the Taiwanese presidential elections slated for January 2024."
    Chinese state-operated media, The Global Times, divulged over the weekend that mainland taxation authorities have executed audits and are scrutinising land utilisation by technology behemoth Foxconn. Its billionaire founder, Terry Gou, is actively campaigning for the Taiwanese presidency.
    Foxconn is the primary assembler of Apple's iPhones at its Chinese manufacturing plants. Equities in Foxconn's publicly-traded subsidiary, Hon Hai, experienced the most significant quarterly slump during Monday's trading session, underscoring the market volatility triggered by geopolitical discord.
    Ongoing endeavours to mitigate tensions between Washington and Beijing are in the pipeline, with indicators hinting at a potential summit between Presidents Biden and Xi this November. Additionally, Bloomberg disclosed that Chinese Foreign Minister Wang Yi is slated for high-level diplomatic discussions in Washington this week.
      Source: Bloomberg
    Australia-China relations
    Australian Prime Minister Anthony Albanese will visit China from 4 to 7 November, aiming to bolster Australia-China relations. China remains Australia's chief trading partner. Albanese's trip marks the first by an Australian leader since 2016 and coincides with the 50th anniversary of Gough Whitlam's inaugural visit in 1973.
    Canberra and Beijing are collaborating to dismantle trade barriers. Tariffs on Australian barley have been rescinded, and the Australian government anticipates resolving its World Trade Organization (WTO) dispute over wine tariffs with China.
    Prior to the tariffs, China was Australia's most lucrative market for wine, valued over $1 billion AUD in both 2018-2019 and 2019-2020, according to the Department of Agriculture.
    The tariff review is projected to last five months, with Canberra optimistic about a positive resolution. "If the duties are not abolished post-review, Australia will recommence the WTO dispute," states the Prime Minister's Office.
    Shares in Treasury Wine Estates, the proprietor of Penfold's, surged upon the market's reopening on Monday, following the announcement. Goldman Sachs reaffirms their BUY rating on TWE, projecting that the winemaker could regain $400 million AUD in pre-tariff sales.
    UBS maintains a BUY stance, while Barrenjoey analysts remain underweight on the stock, citing the five-month review period's potential impact on near-term earnings.
      Source: Department of Agriculture, Bloomberg
               
       
    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
    After former CEO Bernard Looney’s exit, BP shares could be ripe for a takeover. Here’s why.
    Source: Bloomberg   Indices Shares BP FTSE 100 Big Oil Takeover  
     Charles Archer | Financial Writer, London | Publication date: Friday 13 October 2023  BP (LON: BP) shares have fallen by 10.5% over the past five years and sunk from 568p in mid-February 2023 to 499p today. The FTSE 100 oil major is a significant component of the index but could now be a buyout target.
    As ever, there’s always a bigger fish.
    BP shares: Q2 results and Looney exit
    In Q2 earnings, BP’s profits fell sharply by 70% year-over-year to $2.6 billion — missing analyst estimates due to falling oil trading income and refining margins.
    However, this underperformance was widely mirrored by competitors faced with the same comparators (the immediate aftermath of the start of the Ukraine War). And BP was still able to boost its dividend by 10% to 7.27 cents per share — and it also promised to repurchase $1.5 billion of shares over Q3.
    But for context, in May the company slowed its quarterly buyback programme from $2.75 billion to $1.75 billion, sending BP’s share price down the most in one day since 2020.
    Former CEO Bernard Looney enthused that the company’s ‘underlying performance was resilient with good cash delivery - during a period of significant turnaround activity and weaker margins in our refining business.’
    But shortly after this mixed set of results, Looney was forced to admit that he had not been ‘fully transparent’ over intimate relationships with employees — and this was followed with allegations that he had promoted women who he had had a relationship with — leading to a shock resignation.
    January FTSE 100 speculation
    Earlier this year, Citigroup analysts speculated that Exxon Mobil or Chevron might consider a buyout offer for the FTSE 100 oil major — with a megamerger looking attractive on valuation terms. The analysts argued that the comparatively lower valuations suffered by European oil and gas sector stocks couldn’t be closed organically — that ‘markets are unlikely to close the gap themselves.’
    They added ‘we look at the strategic imperative, financial accretion and political headwinds of either of the two US IOCs (Exxon or Chevron) potentially looking to try and acquire one of their key European competitors (BP, Shell or TotalEnergies).’
    This was a view shared by M&G head of equities Michael Stiasny, who in January noted that he ‘would not be shocked to see a big name in the oil and gas or mining sectors subject to a bid, with companies like BP trading at a significant discount to their US peers.’
    Further to this, BP shares have underperformed during Looney’s tenure — even if this was due to the investment needed for the start of its green strategy.
    Indeed, Bloomberg data indicates that the FTSE 100 company’s shares rose by 15%, while Shell’s market capitalisation increased by 29% in this time. Much of this lower growth has been laid at BP’s increased focus on the green transition compared to peers — arguably solid long-term investments, but which have left the company trailing the competition.
    RBC Capital Markets analysts have previously argued that the former CEO sold oil and gas assets (including Alaskan operations) ‘at poor points in the cycle and at relatively low valuations’ in order to fund renewables projects.
    With Looney out and interim CEO Murray Auchincloss now needing to project calm — including a need to balance BP’s strategic pivot away from greener energy in February with some investor disquiet — Q4 could see the American titans consider a move. Auchincloss argued in Abu Dhabi a few days ago that ‘one person leaving does not change the strategy’ set out in February — but not everybody is convinced.
    While acquiring the £85 billion company would be difficult even for a supermajor, it’s worth noting that the entire industry is one built on gigantic mergers; BP itself bought Amoco for $48 billion in 1998.
    Of course, new 2021 takeover rules allow the government to block a buyout on national security grounds — and it’s hard to see the government keen to allow yet another important UK company to leave London without a fight.
    FTSE 100 oil major takeover?
    But the macroeconomic picture could make a BP takeover an attractive prospect for the American firms. OPEC+ members Russia and Saudi Arabia have cut production to the end of the year, and the cartel’s secretary general argues that demand could grow by ‘about 2.4 million barrels a day.’
    Al Ghais has called underinvestment in the sector ‘dangerous’ — arguing that the industry will need close to $14 trillion of investment by 2045 to support the energy transition. With Brent still trading at elevated levels of circa $84/barrel, BP shares could well be a top FTSE 100 takeover target.
    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.
  19. MongiIG
    As Israel considers the path of escalation, both BP shares and Shell shares could send the FTSE 100 higher this week.
    Source: Bloomberg   Indices Israel Hamas Iran Saudi Arabia Israel Defense Forces  
     Charles Archer | Financial Writer, London | Publication date: Monday 16 October 2023 01:11 FTSE 100 oil investors may be getting an eerie sense of déjà vu. Russia’s invasion of Ukraine — in reality an escalation of pre-existing hostilities — echo the intensifying war between Israel and Hamas. Oil and gas prices shot up in the immediate aftermath, and a similar scenario could be about to play out.
    Of course, this new escalation is nothing new. Fighting has been ongoing in this corner of the Middle East going as far back as the 1948 Arab Israeli War when Israel was found, or even a millennium further back during the crusades.
    Accordingly, the caveat with any analysis of the Middle East is that it’s almost impossible to understand every facet of any conflict. Different actors with different motivations proliferate through every country — whether Lebanon, Yemen, Syria — or the power players in the region including Israel, Saudi Arabia, and Iran.
    But the key point, where analysts concur, is that escalation is where the real danger lies. And where investors had hoped that de-escalation would happen over Sunday, the opposite seems to have occurred.
    FTSE 100: Israel-Hamas War
    It is not possible to cover all developments, but some of the key issues include:
    More than 1,400 people were killed by Hamas in Israel when fighters crossed the border, including both soldiers and civilians More than 2,450 people have been killed by Israel’s bombing of Gaza Israeli troops are massing on the Gaza border ahead of an expected ground attack Israel has told 1.1 million Palestinians in North Gaza to evacuate to the south Israel has turned the water back on in southern Gaza The UN argues that Gaza is seeing an ‘unprecedented human catastrophe’ Five US Senate members are in Tel Aviv to meet with top officials, and have been forced to shelter from Hamas rockets US Secretary of State Anthony Blinken has asked Israel to avoid harming civilians as much as possible Clearly, there are huge ethical queries over the extent to which Israel can respond to the attacks on its soil — and pressingly, whether this next step could escalate relatively localised fighting into a regional war, backed by multiple proxy agents.
    For some context, consider the Syrian war — Russia and Iran supported President Bashar al-Assad, while the west and Saudi Arabia supported various rebel groups. Then there’s Yemen, which is under continual conflict as the Saudi Arabia-backed government comes under attack from Iranian-backed Houthi rebels.
    In the milieu, Egypt is still trying to recover from the 2014 military coup, Lebanon remains in economic crisis, and then there’s Iraq, Iran, and Turkey to consider. It’s not hard to see why escalation could become a problem — with Israel also vowing to ‘destroy’ Lebanon if the war spreads.
    Over the weekend, two members of Hamas and Hezbollah told the Wall Street Journal that the attack had been planned in meetings with the Islamic Revolutionary Guards Corps of Iran — and the witnesses claim that the final go-ahead was given by Iran in Beirut last Monday. Iran has denied any involvement.
    Key actors
    At present:
    Israel — Israel Defence Forces (IDF) plan to enter the Gaza Strip, with Lt Gen Herzi Halevi arguing that the ‘responsibility now is to enter Gaza, to go to the places where Hamas is preparing, acting, planning, launching. Attack them everywhere, every commander, every operative, destroy infrastructure’ The US — The Pentagon has ordered two aircraft carrier strike groups to the eastern Mediterranean near Israel to deter Iran or Hezbollah from joining the Israel-Hamas conflict. White House national security adviser Jake Sullivan has warned that ‘there is a risk of an escalation of this conflict, the opening of a second front in the north and, of course, Iran's involvement.’ US President Biden is reportedly considering a visit to Israel Saudi Arabia — the foreign ministry has denounced Israel as ‘occupation forces’ and said that Hamas acted as a ‘result of the continued occupation and deprivation of the Palestinian people of their legitimate rights’ Iran — foreign minister Hossein Amir-Abdollahian has made several dire warnings, including that ‘if the Zionist aggressions do not stop, the hands of all parties in the region are on the trigger.’ Hamas leader Ismail Haniyeh met with the minister on Saturday in Qatar, where they ‘agreed to continue cooperation’ to achieve the group's goals, Hamas said in a statement FTSE 100 oil major implications
    There are many markets that could be affected by the war — but the most immediate are oil and gas. For context, European wholesale gas prices had already hit a seven-month high on Friday — and Brent Crude remains elevated at circa $91 per barrel.
    Blinken had noted that thawing relations between Saudi Arabia and Israel could have been a motivator behind the original Hamas attacks. For perspective, a US-backed plan for Saudi Arabia to formally recognise the state of Israel and increase its oil production, in exchange for increased US military aid and increased political support, could now be essentially sunk.
    Had Saudi, which had previously agreed to restrict its oil production alongside other OPEC cartel members, agreed to increase oil production, then the rest of the OPEC cartel could have followed. There is now an opportunity for the cartel to squeeze prices even higher.
    Further, the tentative nuclear deal being drawn up between the west and Iran may now break down, making increased oil output from the country unlikely as well.
    The bigger problem is the Strait of Hormuz — which contains eight major islands — seven of which are controlled by Iran. The EIA considers the Strait to be the world’s most important oil chokepoint, with the Strauss Center thinking that oil tankers carry 17 million barrels of oil, representing 20-30% of global daily consumption, through the Strait each day. Any disruption could see oil rise sharply.
    In addition, the Baltic-connector gas pipeline between Finland and Estonia was damaged late last week with investigators finding the rupture was caused by mechanical force. Russian President Putin has denied involvement, but Finnish officials cannot rule out state actor involvement. NATO has promised a ‘determined’ response — and the timing is clearly questionable.
    Oil prices, and the FTSE 100 oil majors BP and Shell could well rise on Monday.

       
    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.
  20. MongiIG
    As the war between Israel and Hamas escalates, the markets are reacting to the increased geopolitical uncertainty.
    Source: Bloomberg   Forex Commodities Inflation Israel United States dollar Hamas
     Charles Archer | Financial Writer, London | Publication date: Tuesday 24 October 2023 14:06 As the war between Israel and Hamas teeters on the verge of regional escalation, local markets in Israel, Iraq, Egypt and Jordan among others are seeing both bond and stock market selloffs in response to the increased uncertainty.
    Of course, this was to be expected — but secondary effects could ripple through much larger swathes of the global economy.
    Israel-Hamas war updates
    Israel’s President Isaac Herzog has described Hamas’ original attacks on 7 October as ‘one of the worst atrocities of modern times’ and has also accused Hezbollah of ‘playing with fire’ in Israel’s North. The President has accused Iran of creating tensions between Hezbollah and Israel and warned that if Hezbollah drags Israel into war that ‘Lebanon will pay the price.’
    Meanwhile, Israeli military spokesperson Daniel Hagari has noted that the military is now ‘ready and determined’ for the next stage of the war, having carried out limited ground raids on the Gaza Strip.
    The UN’s humanitarian agency, OCHA, now considers that 1.4 million — or nearly two-thirds — of Gaza’s 2.3 million-strong population is now displaced as a result of people moving from the North to the South. The agency has highlighted the shortage of drinking water and the overcrowding as the ‘major concern.’
    It seems that Israel is holding off on a ground invasion while it considers how best to rescue more than 200 hostages held by Hamas in Gaza. As previously noted, it’s this potential escalation that could drag other actors into a wider regional war.
    1. Oil
    Brent Crude remains elevated at $90 per barrel — reflecting fears that Iran could enter hostilities. This could be a huge problem as the US would then likely increase sanctions on Iranian oil. According to Cayler Capital’s founder and CIO Brent Belote, this could remove between one and two million barrels per day from the market ‘almost instantly.’
    For context, while global oil supplies are now less concentrated, between October 1973 and March 1974, oil prices rose by over 300% as Arab nations imposed an oil embargo on Israel’s supporters due to the Yom Kippur War. And Iran has already called for Israel to face an embargo.
    Perhaps the bigger issue is the Strait of Hormuz. The world’s busiest shipping channel sees 20% of the world’s total oil consumption pass through each day. JP Morgan analysts argue its closure would ‘shut down the region's oil trade, supercharging oil prices.’
    In early 2012, Iran threatened to close the Strait in response to international sanctions against its nuclear program. At the time, the US deployed naval forces to ensure the safe passage of ships, stating it would not tolerate a closure.
    2. Inflation
    Inflation has eased significantly across western nations over the past year. CPI inflation in the UK now stands at 6.7%, down from 11.1% in October 2022 — and is expected to fall further over the next few months.
    However, inflation has come down due to rising interest rates, with the Bank of England base rate now at 5.25%. If oil remains elevated, inflation may become more entrenched, as the hard commodity is used across global supply chains to create thousands of products.
    A key aspect of renewed inflationary fears is domestic and business energy bills; both consumers and companies have seen bills fall sharply since their peaks a few months ago, but Europe is heading into winter. With sanctions already in place against Russia, energy could surge again.
    And for perspective, Brent rose to as high as $139/barrel in the aftermath of Russia’s invasion.
    3. US Dollar
    In the day after the initial Hamas attacks, the US Dollar rose by 0.2% against both the Euro and the Pound, while other safe haven currencies including the Swiss Franc and Japanese Yen also rose. Of course, the dollar could be hit if the US suffers a recession, but the currency remains one of the defensive assets of choice during times of geopolitical stress.
    Other safe haven assets, including short-term US treasuries and gold, have also remained elevated. There is some debate to the extent to which the US Dollar remains a safe haven — while it remains the world’s reserve currency by some margin, the growing US deficit is causing some analyst concern.
    4. NASDAQ tech stocks
    With some of the largest US tech stocks reporting back to investors today — including Microsoft and Alphabet — it’s worth framing their individual efforts against the macroeconomic backdrop.
    Tech shares tend to move inversely to oil and gas shares; this was the case in mid-2022 as the Ukraine war pushed up oil prices, feeding inflation, sending bonds higher. Higher inflation must be met with higher interest rate rises, and the tech stocks typically rely on the water of loose monetary policy to grow rapidly.
    It’s no coincidence that the NASDAQ 100 fell into a bear market for much of 2022 as rates rose; while the index has seen a large recovery through 2023, a new inflationary spike could see the tech stocks sell off once more.

       
    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.
  21. MongiIG
    With the Israel-Hamas war continuing to escalate, Brent is steadily rising. Where next for the FTSE 100 oil majors?
    Source: Bloomberg   Shares Commodities Gaza Strip Price of oil Gaza–Israel conflict Israel
     Charles Archer | Financial Writer, London | Publication date: Monday 23 October 2023 15:49 The FTSE 100 fell sharply last week, slipping from 7,625 points on 17 October to 7,367 points today. Overall, the UK’s premier index is down circa 2.5% year-to-date, dragged down by wider macroeconomic concerns of a potential global slowdown, and more recently, fears that the Israel-Hamas war could escalate into regional conflict.
    Of course, the war is already seeing Brent Crude rise; the international oil price benchmark is now trading at circa $92/barrel. But if Iran enters the war, JP Morgan analysts argue that the ‘the closure of the Strait of Hormuz —the world's busiest oil-shipping channel— it would shut down the region's oil trade, supercharging oil prices.’
    Of course, the bank also noted that ‘while Iran has threatened over the years to block the strait, it had never followed through.’ For context, circa 20% of the world’s total oil consumption passes through the Strait each day. Closure for any length of time could see inflation resurge and global economies wobble.
    But this fear, and the subsequent oil price rise, has been positive for the FTSE 100 oil majors, BP and Shell. Indeed, Shell hit a record market capitalisation last week, though has slipped back slightly.
    Israel-Hamas war updates
    Over the past 24 hours, the Hamas-run healthy ministry in Gaza has reported that 436 people have been killed by Israeli air strikes. This brings the total number of Palestinian deaths to 5,087 since 7 October — with a further 15,273 people wounded.
    Israel has advised it is targeting Hamas infrastructure, including tunnels, with 320 targets hit over the past day. It’s also launched ground raids into the Gaza Strip, with IDF spokesman Daniel Hagari advising that ‘during the night there were raids by tank and infantry forces. These raids are raids that kill squads of terrorists who are preparing for our next stage in the war. These are raids that go deep.’
    An additional consideration of these raids is to garner information about the locations of the 222 hostages held by Hamas in Gaza (including some foreign nationals). For context, more than 1,400 Israelis were killed when Hamas attacked both civilians and soldiers in Israel at the start of the conflict.
    The New York Times has reported that the US has advised Israel to delay its full ground invasion of Gaza to negotiate the release of these hostages and also allow more aid to enter the Strip. According to Reuters, a third convoy of trucks recently entered Gaza through the Ragah crossing in Egypt — though the amount of aid being delivered is still far short of what the UN considers is needed.
    And arguably, the ground invasion could be the catalyst that draws other actors into a wider war.
    BP and Shell shares
    The FTSE 100 oil majors are already benefitting from a rising oil price that is reacting to fears of a regional war.
    But these fears over oil movement restrictions are nothing new — in early 2012, Iran threatened to close the Strait of Hormuz in response to international sanctions against its nuclear program. At the time, the US deployed naval forces to ensure the safe passage of ships, stating it would not tolerate a closure of the Strait.
    Other than the wartime developments, it’s worth noting that Chevron has just agreed to buy Hess for $171 per share in an all-stock deal. Given that BP still lacks a full-time CEO after Looney’s unceremonious exit, its contentious green investments focus, and relative underperformance — it could remain a buyout target.
    Meanwhile, Shell shares could see another record high this week should Brent rise to $100 and take the FTSE 100 major with it. However, this will depend on whether international efforts to de-escalate the conflict bear fruit.

     
    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.
  22. MongiIG
    As the Israel-Hamas war threatens to escalate into regional conflict, long-term FTSE 100 investors are facing yet more volatility.
    Source: Bloomberg   Indices Shares China United States Volatility Israel
     Charles Archer | Financial Writer, London | Publication date: Friday 20 October 2023 15:43 FTSE 100 investors may be starting to get a weary sense of market fatigue. Of course, it’s not just FTSE investors — whether it’s the S&P 500, NASDAQ 100, ASX 200, CAC 40, or the DAX — it seems that the next unpredictable black swan event is always just around the corner.
    For context, the UK’s premier index sunk from 7,674 points in mid-January 2020 to just 5,191 points on 20 March 2020 during the pandemic mini crash. After significant volatility, the FTSE 100 recovered to break through the symbolic 8,000-point barrier by mid-February 2023.
    But it has since fallen back to 7,430 points today.
    FTSE 100 volatility abounds
    The FTSE’S volatility through 2023 perhaps reflects wider macroeconomic factors: the ‘big four’ banks — Lloyds, Barclays, HSBC, and NatWest — are delivering higher profits but mostly because of higher net interest margins. There comes a point where dealmaking breaks down and debt stress outweighs the higher margins.
    Meanwhile, FTSE 100 oil majors are benefitting from elevated oil prices — driven by post-pandemic demand, the Russia-Ukraine war, and now the Israel-Hamas war. But high oil prices also create stickier inflation — driving the rest of the index down. Meanwhile, with the Bank of England base rate at 5.25% and likely to stay elevated, the housing market, alongside the major housebuilders, is struggling compared to recent comparators.
    The FTSE also hosts some of the largest miners in the world — with the likes of Glencore, Anglo American and Antofagasta calling the index home. And again, these miners are working with volatile commodity prices — including gold, which as the real asset safe haven of choice is within touching distance of record highs.
    And ever since the pandemic began, there’s been seemingly endless volatility events. The GameStop saga, the Ukraine War, the Partygate scandal, the Pakistan crisis, the Truss mini-budget, the US election, the Capitol riots, the Myanmar coup, the crypto surge (then winter), the Afghanistan withdrawal, the inflation story, Credit Suisse, Silicon Valley Bank, the interest rates crisis, escalating Sino-US tensions, and now the Israel-Hamas War.
    The new fear is that the conflict, which thus far has been relatively confined to Israel and Gaza, spirals into a wider regional war involving Saudi Arabia and Iran alongside their proxy backers.
    Is there always a black swan?
    Few analysts thought that Russia would invade Ukraine, and similarly, few thought Hamas would be able to penetrate the Israeli defences that surround the Gaza Strip. You could argue that the covid-19 pandemic was a black swan (a completely unpredictable, negative market event), and yet pandemics have hit the global economy in the past.
    For perspective, the National Bureau of Economic Research estimates that 40 million people — representing 2.1% of the global population — died in the Influenza pandemic of 1918-1920, with the average country seeing real per capita GDP reduced by 6%.
    Looking beyond the Middle East, much investor attention is on the world’s second largest economy, China. For context, FTSE Russell data shows that roughly 80% of FTSE 100 corporate income is derived from overseas — and the global economy relies on Chinese growth.
    It’s worth highlighting that Chinese economic data appears relatively positive at present. State stimulus saw GDP grow by 4.9% in July-September compared to a year earlier, compared with analyst expectations for a 4.4% increase. But fears for the country’s real estate sector — which accounts for as much as 30% of GDP — are rising.
    This potential crisis has been brewing since Evergrande halted production on some projects in August 2021 due to overdue payments. Fellow real estate titan Country Garden is now in similar financial straits.
    And then there’s the wider Sino-US tensions to consider. Over the past year alone, there’s been regulatory problems over US-listed Chinese tech stocks, arguments over the origins of covid-19, and disputes over a potential BRICS reserve currency.
    There’s also worries over a possible TikTok ban in the US, tensions over Ukraine, Israel and Taiwan, spy balloon recriminations, bans on certain semiconductor exports from the US to China, and bans on the export of certain critical minerals from China to the US.
    Then there’s the Huawei ban in the US, followed by the iPhone ban for government employees in China, and the contested Aukus pact for Australian nuclear submarines.
    Putin’s recent meeting with ‘dear friend’ Xi in China highlights the geopolitical tensions — and yet after Apple CEO Tim Cook’s visit to China, Vice Premier Ding Xuexiang has enthused that China is willing to provide more opportunities for foreign funded enterprises, including Apple, to develop in China.
    Yesterday was the 36th anniversary of the Black Monday crash. Five years after the worst one-day crash in living memory, markets across the UK, Europe, and the US were rising by as much as 15% a year. The bear market of the 2008 Global Financial Crisis lasted just five quarters, and the pandemic recovery was even faster.
    Of course, there’s always a negative market event on the horizon. But over the long-term, the FTSE 100 has usually continued to deliver dividends — and investors can overlook this positive longer-term picture.
    As a caveat, 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.
  23. 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 23 October
    Chris Beauchamp's insight
    Earnings season is in full flow this week, and UK companies also join in, most notably with earnings from the banking sector for quarter three (Q3). Earnings and the ongoing conflict in the Middle East will be the main drivers, along with the European Central Bank (ECB) rate decision and US Q3 gross domestic product (GDP). It promises to be a busy week, with volatility at multi-week highs as well.
    Economic reports
    Weekly view Monday
    1.30pm – US Chicago Fed index (September): index expected to rise to 0.05. Markets to watch: US indices, USD crosses

    Tuesday
    1.30am – Japan PMI (September, flash): manufacturing to rise to 49 from 48.5 and services to fall to 52.9 from 53.8. Markets to watch: JPY crosses
    7am – UK unemployment rate (August): unemployment rate expected to hold at 4.3%. Markets to watch: GBP crosses
    8.30am – German PMI (September, flash): manufacturing PMI to rise to 41.5 from 39.6. Markets to watch: eurozone indices, EUR crosses
    9.30am – UK PMI (September, flash): manufacturing PMI to rise to 45 and services PMI to rise to 49.8 from 49.3. Markets to watch: GBP crosses
    2.45pm – US PMI (September, flash): manufacturing to fall to 49.5 from 49.8 and services to fall from 50.1 to 49.8. Markets to watch: USD crosses

    Wednesday
    1.30am – Australia CPI (Q3): prices to rise 5.1% YoY and 0.9% QoQ, from 6% and 0.8%. Markets to watch: AUD crosses
    9am – German IFO index (October): business climate index expected to rise to 86.9 from 85.7. Markets to watch: EUR crosses
    3pm – Bank of Canada rate decision: rates expected to rise to 5.25% from 5%. Markets to watch: CAD crosses
    3.30pm – US EIA crude oil inventories (w/e 20 October): stockpiles fell by 4.5 million barrels in the previous week. Markets to watch: Brent, WTI

    Thursday
    1.15pm – ECB rate decision: rates expected to remain at 4.5%. Markets to watch: eurozone indices, EUR crosses
    1.30pm – US durable goods orders (September), GDP (Q3, advance reading), initial jobless claims (w/e 21 October): goods orders expected to rise 0.6% MoM, and GDP to rebound to 4.1% from 2.1% QoQ. Markets to watch: US indices, USD crosses
    3pm – US pending home sales (September): expected to rise 0.9% MoM. Markets to watch: USD crosses

    Friday
    6.30am – French GDP (Q3, preliminary): growth to drop to 0.1% from 0.5% QoQ. Markets to watch: EUR crosses
    1.30pm – US PCE index (September): prices forecast to rise 0.3% MoM. Core PCE to rise 0.3%. Markets to watch: USD crosses
      Company announcements
     
    Monday 23 October
    Tuesday 24 October
    Wednesday 25 October
    Thursday 26 October
    Friday 27 October
    Full-year earnings
       
    ASOS
     
     
    Half/ Quarterly earnings
      Barclays,
    Spotify,
    General Motors,
    Coca-Cola,
    Visa,
    Microsoft,
    Alphabet,
    General Electric,
    Snap
    Lloyds,
    IBM,
    Meta,
    Boeing
    Standard Chartered,
    BNP Paribas,
    TotalEnergies,
    Ford,
    Intel,
    Amazon,
    Merck
    NatWest,
    IAG,
    Air France-KLM,
    Exxon Mobil,
    Chevron
    Trading update*
      Bunzl
     
    Unilever
     
     
        Dividends
    FTSE 100: None
    FTSE 250: Morgan Advanced Materials, Balfour Beatty, Dunelm, City of London Inv Trust, Bankers Inv Trust
    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
    23 October Tuesday
    24 October Wednesday
    25 October Thursday
    26 October Friday
    27 October Monday
    30 October FTSE 100     0.15       Australia 200     0.5     0.1 Wall Street             US 500 0.10 0.02 0.06 0.08 0.38 0.28 Nasdaq   0.26     1.51   Netherlands 25       0.07     EU Stocks 50           2.8 China H-Shares             Singapore Blue Chip             Hong Kong HS50             South Africa 40             Italy 40             Japan 225            
  24. MongiIG

    Singapore banks Q3 2023 earnings

    By MongiIG,


    Market News
    Resilience in net interest income, but forward-looking guidance remains in focus
    Source: Bloomberg   Indices Shares Loan Interest Interest rates Bank
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Friday 20 October 2023 05:48  
    The three local banks are set to report their Q3 2023 earnings over coming weeks. Year-to-date performance reveals OCBC (+6.3%) as the only one out of the trio in positive territory, while DBS (-1.7%) and UOB (-8.5%) lag. This is generally in line with the subdued showing in the broader Straits Times Index (STI), which is down 3.5% year-to-date.
    Overall, the average year-to-date performance of our three local banks (-3.8%) lagged slightly behind the MSCI AC Asia Pacific Financials Index (-0.8%), but far outperforms the US KBW Bank Index (-24.5%).
     
    Source: Refinitiv Source:Refinitiv  
    Net interest income to do the heavy-lifting for earnings, as rates expected to stay elevated for higher
    Despite an impending end to the US Federal Reserve (Fed)’s hiking cycle, market participants have been accustomed to the fact that rates will stay high for longer, with validation found from the resilience in US economic conditions. Therefore, while upside for the Singapore Overnight Rate Average (SORA) and other benchmark lending rates may have stalled over the past months, expectations are anchored that rates may remain at elevated levels for the foreseeable future.
    Thus far, the banks’ net interest margins (NIMs) have likely peaked but have been tapering at a gradual pace over the past quarters, despite having the largest tailwind from the interest rate upcycle behind us. Additional repricing of loan may continue to provide support for the banks’ net interest income portion at the upcoming results, but some focus will revolve around any guidance as to how long the trend may last. Previous comments from DBS CEO Piyush Gupta suggest ‘a couple of basis points (bp) upside’ in NIM from current levels, citing US interest rate increases in the second half of 2023.
     
    Source: Monetary Authority of Singapore (MAS)  
    Risks: Short-lived bounce in lending activities, higher allowances
    On the other hand, the risks may continue to revolve around the uncertain economic risks, as loan volume in Singapore for the second quarter seems to be resuming its downward trend after a short-lived bounce. Monthly business loans as of August 2023 has touched a new low since the start of the year, although consumer loans have largely held steady.
    Nevertheless, more subdued lending conditions could potentially linger for longer. The latest home prices data from the Urban Redevelopment Authority (URA) revealed only a marginal increase in the third quarter of 2023 (+0.5%), while new private home sales have dipped in August. Headwinds from higher interest rates, three rounds of property cooling measures and lingering economic growth risks have been driving buyers’ fatigue lately, which may be set to continue into next year.
    Aside, the local banks continue to build up their provision for loan losses in 2Q 2023, more notably in OCBC and UOB, although their non-performing loan ratio has remained resilient. This portion could be harder to grasp in the upcoming results, given that economic conditions have largely held up but downside risks to growth persist.
     
    Source: Refinitiv  
    Lacklustre market conditions in third quarter to be pitted against resilient card spending
    Air traffic statistics continues to point to robust travel momentum in the third quarter, with Singapore’s airport passenger movements up close to 60% from a year ago, which could continue to underpin card spending at the upcoming quarter. In the previous quarter, DBS’ card fees grew 17% in to S$237 million.
    That said, wealth management fees could be more of a black box, with market conditions proving to be volatile during the third quarter. The VIX touching its three-month high during the period while global equity markets largely faced a correction, which could dampen some appetite towards wealth management products. Nevertheless, market participants will be looking out for any positive surprises, largely from the management’s outlook.
    SGX institutional fund flow data revealed rising net inflows over past months
    The Singapore Exchange (SGX) fund flow data has revealed net institutional inflows for the financial sector over the past months, amounting to S$750 million since August 2023, when the Fed stuck to its hawkish rhetoric. But one may note that this follows after months of consistently paring down exposure in the financial sector since its peak in February 2022. This data is more backward-looking, but for now, there is not too much of a clue on whether recent inflows marked a longer-term reversal, given that previous build-up in August-November 2022 failed to sustain.
     
    Source: SGX, IG  
    DBS share price: Technical analysis
    The share price movement for DBS has been stuck in some indecision lately, with investors still seeking for a strong catalyst to induce an upward break of its near-term ranging pattern. Trading above the Ichimoku cloud support on its daily chart may still reflect some control for buyers for now, with one to watch for any successful break above key resistance at the S$34.55 level, which marked its August and September 2023 peaks. A move above the S$34.55 level may potentially pave the way to retest the S$36.00 level next.
     
    Source: IG charts  
    OCBC share price: Technical analysis
    OCBC share price has been drifting higher on a broader scale, with a series of higher lows formed since July 2022. A near-term bearish crossover on its daily Moving Average Convergence/Divergence (MACD) may point to some exhaustion for now, but the broader upward trend may remain intact with its monthly relative strength index (RSI) trading firmly above the key 50 level since December 2020. An ascending channel pattern has been in place for now, leaving the lower channel trendline support at the S$12.64 level on watch in the event of further downside.
     
    Source: IG charts  
    UOB share price: Technical analysis
    For UOB, momentum for its share price has been stalling lately as reflected in the flat-lined MACD on the daily chart, while its daily RSI fluctuates around the 50 level with the lack of a clear direction. On the downside, the S$27.70 level may prove to be a crucial support to hold, having supported prices on at least three previous occasions. Any breakdown of the support could potentially pave the way to retest the S$26.07 level next. On the upside, the S$29.20 level may be a key obstacle for buyers to overcome, which marked its recent tops while nearing a downward trendline resistance formed since the start of this year.
     
    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.
  25. MongiIG
    Nvidia’s made-for-China chips, which were designed to circumvent the chip export restrictions imposed by the US government in 2022, are now hitting the wall.
    Source: Bloomberg   Shares Nvidia United States China Price Export
    Hebe Chen | Market Analyst, Melbourne | Publication date: Thursday 19 October 2023 07:11 Nvidia’s made-for-China chips, which were designed to circumvent the chip export restrictions imposed by the US government in 2022, are now hitting the wall. The Biden administration has escalated its efforts to curb the chip exports to China, closing the door for Nvidia’s processors—A800 and H800 chips that tailored specifically for the Chinese market.
    Following the official announcement on Tuesday, the share price of the leading AI chip maker plummeted by nearly 5%. Nvidia responded to the new regulation and cautioned that the stricter rules "may impact the company’s ability to complete the development of products in a timely manner and support existing customers of covered products."
    In fact, it's not just Nvidia's two chips that have been targeted, any chips falling outside the restricted threshold are now required to be reported to the US government before they can be sold to China. Additionally, countries such as Saudi Arabia, the United Arab Emirates, and Vietnam are also included in the list of nations subject to additional licensing requirements if US companies wish to sell their chips to them. This measure is aimed at closing the loopholes that third parties in these countries might exploit to resell high-end chips to China.
    In 2022, Nvidia made over 7 billion US dollars from chip sales to the Chinese market, which includes mainland China and Hong Kong, surpassing their revenue generated in the United States.
    Source: https://www.statista.com/statistics/988037/nvidia-revenue-by-country-region/ Nvidia stock price technical analysis
    Based on the daily chart, Nvidia's stock price is currently on the verge of breaking the impressive uptrend that began in January 2023, resulting in a remarkable increase of over 200% so far. However, since reaching its peak in August, briefly touching above $500, it has experienced a nearly 15% downturn over the past two months.
    If the price continues to fall below the range of $425-$436, there is a growing probability that it may keep sliding to around $400-$407, a level that would complete the head-and-shoulders pattern and potentially open the floor if the price breaches this level. On the flip side, the near-term resistance is situated at around $450.

       
    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.

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