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Gold, Brent and natural gas prices all struggle Commodity prices have been unable to make much headway this morning, with even oil prices seeing their recent rally begin to falter. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 12 February 2024 12:09 Gold clings to trendline support Gold’s period of disappointing performance continues, though it has been able to hold rising trendline support from early December. A close back above the 50-day simple moving average (SMA) would open the way to another test of recent highs at $2060, and then on to $2070 and then the December high at $2086. A close below the trendline would mark a bearish development and suggest a move towards $2000, or down to the December lows. Source: ProRealTime Brent rally stalls After four days of gains, the price has returned to the 200-day SMA. Friday saw the price move above this level and just about hold above it, but the 100-day SMA appeared to act as a resistance. A close back below $80 could signal that the price has formed a lower high, and that a return to the lows of last week could develop. A close above the 100-day SMA would help maintain the bullish outlook and open the way to the $84, the late January high. Source: ProRealTime Natural Gas slumps The major decline in natural gas prices goes on. The price has broken through the early 2023 lows, and now further declines towards the 1644 support level beckon, while beyond this lies the 1517 low from mid-2020. After such sharp losses over the past week, a rebound could develop, but for now trendline resistance from early January stands in the way of any further upside. Source: ProRealTime

Gold, Brent and natural gas prices all struggle Commodity prices have been unable to make much headway this morning, with even oil prices seeing their recent rally begin to falter. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 12 February 2024 12:09 Gold clings to trendline support Gold’s period of disappointing performance continues, though it has been able to hold rising trendline support from early December. A close back above the 50-day simple moving average (SMA) would open the way to another test of recent highs at $2060, and then on to $2070 and then the December high at $2086. A close below the trendline would mark a bearish development and suggest a move towards $2000, or down to the December lows. Source: ProRealTime Brent rally stalls After four days of gains, the price has returned to the 200-day SMA. Friday saw the price move above this level and just about hold above it, but the 100-day SMA appeared to act as a resistance. A close back below $80 could signal that the price has formed a lower high, and that a return to the lows of last week could develop. A close above the 100-day SMA would help maintain the bullish outlook and open the way to the $84, the late January high. Source: ProRealTime Natural Gas slumps The major decline in natural gas prices goes on. The price has broken through the early 2023 lows, and now further declines towards the 1644 support level beckon, while beyond this lies the 1517 low from mid-2020. After such sharp losses over the past week, a rebound could develop, but for now trendline resistance from early January stands in the way of any further upside. Source: ProRealTime

FTSE 100 struggles while DAX and Dow hold steady The FTSE 100 remains under pressure in early trading, while both the Dax and Dow hold on near their previous highs. Source: Bloomberg Written by: Axel Rudolph FSTA | Senior Financial Analyst, London Publication date: Monday 12 February 2024 11:45 FTSE 100 under pressure The index has fallen back for several days, retreating from 7700 and the lower high of early February. Having broken above trendline resistance from the 2023 highs during the course of late January, the price may now retest the broken trendline from above. This would also coincide with the 200-day simple moving average (ISMA). A recovery above 7600 might yet signal that a low has been formed. Additional declines target the late January low at 7400, and below this down towards 7250 and the support zone that lasted throughout 2023. Source: ProRealTime DAX holds near 17,000 The Dax continues to consolidate around 17,000, but remains above trendline support from the October low. Mid-January weakness found buyers at the 50-day SMA, and in the short-term a push to a fresh record high seems likely. A near-term retracement requires a close back below the 50-day SMA to open the path to January’s low at 16,345, with some possible support before this at the previous record high of 16,532. Source: ProRealTime Dow drifts through trendline support In what might be seen as a portentous development, the Dow is testing support from the mid-January low. In the short-term, further weakness could follow, potentially clearing the way to another test of the previous highs at 37,825. Below this lies the 50-day SMA, and then down to 37,125, the lows of December. Source: ProRealTime

Explaining the significance of semiconductor companies, and a rundown of some of the best semiconductor stocks to watch. These are the five largest semiconductor stocks in the world by market capitalisation. Source: Bloomberg Shares Semiconductor Nvidia TSMC Integrated circuit Manufacturing Written by: Charles Archer | Financial Writer, London Reviewed by: Axel Rudolph FSTA | Senior Financial Analyst, London Semiconductor companies are those involved in the design, manufacturing, and distribution of semiconductor devices and related technology. Semiconductors — or microchips — are essential to the functioning of electronic devices and have seen particular investor interest in 2023 given the rise of the AI sector. Without semiconductors, there would be no computers, smartphones, gaming, or a hundred other applications, all of which are essential to 21st century living. OpenAI’s revolutionary ChatGPT chatbot, the growing political importance of AI development, and Nvidia’s dizzying rally are all testament to the importance of the sector. With significant growth in AI interest expected through the next decade and beyond, investing in semiconductor stocks within a diversified portfolio could be an attractive proposition. For context, giants including Intel and ASML consider that annual global spending on semiconductors will rise to $1 trillion by 2030, up from just $570 billion in 2022. It’s also worth noting that China and the US are both attempting to harm each other’s ability to use advanced semiconductors to develop AI technology; the US through export bans of certain semiconductors and China through export bans of certain critical minerals. Best semiconductor stocks to watch Before delving into some of the most popular individual semiconductor shares, it’s worth highlighting that there are many popular, diversified ETFs which offer exposure into multiple companies on a low cost basis. For example, the Vaneck Vectors Semiconductor UCITS ETF holds 25 of the world’s largest semiconductor companies and is a common choice for investors who want broad exposure to the sector without the need to conduct additional research. In terms of individual shares, the five stocks listed below are widely considered to be the largest AI companies in the world by market capitalisation right now. However, analysts disagree on what exactly constitutes a semiconductor stock, and further, these may not be the best value opportunities. Nvidia Taiwan Semiconductor Manufacturing Company Broadcom Samsung ASML Nvidia Nvidia shares have been on a dizzying rally to a $1.77 trillion valuation, rising by 1,720% over the past five years. This is more than the entire Chinese stock market. The microchip behemoth was arguably the most popular semiconductor stock of 2023 — though of course, popularity does not mean it is the best investment available. Q3 results were remarkable; revenue came in at $18.12 billion compared to the LSEG analyst consensus of $16.18 billion, a rise of 206% year-over-year. The al-important data-centre revenue rose by a whopping 279% to $15.51 billion — with half of this cash coming from cloud infrastructure providers including Amazon. And Nvidia also expects to generate 231% revenue growth in Q4 — equivalent to $20 billion. On the other hand, it has a huge price-to-earnings ratio, alongside significant exposure to a faltering Chinese economy and rising Sino-US export tensions. Q4 results are expected on 21 February. Taiwan Semiconductor Manufacturing Company While Nvidia is touted as the ‘picks and shovels’ semiconductor stock for 2023, this crown could arguably belong to Taiwan Semiconductor Manufacturing Company. Most chip producers — including Nvidia — outsource actual production to the Taiwanese company, with the country responsible for making circa 90% of the world’s most advanced chips. TSMC shares have did well in 2023, and have continued to rise in 2024, given the AI-driven demand, its colossal manufacturing capacity and the wide economic moat surrounding starting up any sizeable competitor. However, Taiwan’s complex political status, including its relationship with China remains a long-term risk. The company recently announced plans to build a second semiconductor manufacturing plant in Japan. Broadcom Broadcom may not be the most fashionable name in the semiconductor world, but the company’s designs and manufacturing acumen underpins masses of data centre, networking, software, broadband, wireless, storage, and industrial markets. The company’s 2023 fiscal year served up many highlights: revenue grew by grew 8% year-over-year to a record $35.8 billion, driven by investments in accelerators and network connectivity for AI by hyperscalers. President and CEO Hock Tan enthused that ‘the acquisition of VMware is transformational. In fiscal year 2024 we expect semiconductor to sustain its mid to high single digit revenue growth rate, with the contribution of VMware driving consolidated revenue to $50 billion, and adjusted EBITDA to $30 billion.’ And the company delivered a record adjusted EBITDA margin of 85%, delivering $17.6 billion in free cash flow. Broadcom shares now up by 115% over the past year. Samsung Samsung is a South Korean titan that is well-known as one of the world’s largest producers of electronic devices — ranging from appliances to digital media devices, semiconductors, memory chips, and integrated systems. In recent fiscal 2023 results, it reported KRW 258.94 trillion in annual revenue and KRW 6.57 trillion in operating profit — and in the current quarter is focusing on improving profitability by increasing sales of high value-added products. The company further indicated that the second half of this fiscal year should show ‘more significant improvement.’ Samsung also signed a supply deal with Nvidia in September, and further collaboration remains a key opportunity in the new year. ASML ASML is a world leader in chip-making equipment. It’s a common misconception that the company actually makes semiconductors; it does not. It designs and manufactures the lithography machines that are an essential component in microchip manufacture and is therefore indispensable within the wider supply chain. You could argue that ASML is an even more crucial to the manufacturing line than TSMC, but the stock has only risen by a comparatively small 43% over the past year. In 2023 full-year results, the semiconductor stock delivered €27.6 billion in net sales, on a gross margin of 51.3% Accordingly, it delivered a significant €19.91 of earnings per share. 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.

The AUD/USD ends its losing streak buoyed by a hawkish RBA and record credit growth in China, setting the stage for Australia's pivotal job report. Source: Bloomberg Forex AUD/USD United States dollar China Australian dollar Unemployment Written by: Tony Sycamore | Market Analyst, Australia Publication date: Monday 12 February 2024 06:20 Last week saw the AUD/USD snap a five-week losing streak, following a more hawkish than expected RBA meeting, and as China credit data beat expectations. Despite the RBA keeping the cash rate unchanged at 4.35%, and revising down its forecasts for core inflation (3.1% by end-24, from 3.3% previously), the RBA retained its tightening bias, noting that “a further increase in interest rates cannot be ruled out”. Data released on Friday in China showed that Chinese banks extended CNY 4.92 trillion in new yuan loans in January, a record high since records began in 2004. At the same time, Total Social Financing (TSF), a broader measure of credit and liquidity, reached a record high of CNY 6.5 trillion in January, well above forecasts for CNY 5.55 trillion. The stronger-than-expected credit data will provide much-needed support from the embattled Chinese economy. This week's critical local economic event for the AUD/USD is Thursday's labour force report for January. What is expected from this week's Labour Force Report (Thursday, February 15th at 11.30pm) Last month, the Australian economy lost a sizeable 65.1k jobs in December vs. the 15k gain expected. The unemployment rate remained unchanged at 3.9% due to a significant drop in the participation rate from 67.1% to 66.8%. David Taylor, ABS head of labour statistics, said: "The fall in employment in December followed larger than usual employment growth in October and November, a combined increase of 117,000 people, with the employment-to-population ratio and participation rate both at record highs in November." This month, the market is looking for the economy to add 37.5k jobs and for the participation rate to increase to 66.9%. This would see the unemployment rate rise to 4.0%, the highest since February 2022 and keep intact our view for two 25bp rate cuts in 2024, the first in August. AU unemployment rate chart Source: TradingEconomics AUD/USD technical analysis Recently, we have been looking for the AUD/USD to stabilise and move higher based on the idea that the pullback from the December .6871 high is part of a correction, rather than a reversal lower. However, last week's break below .6500c has created a degree of technical damage and cast doubt over this interpretation, leaving us with a more neutral bias. To restore a more positive outlook, the AUD/USD must see a sustained move above last week's .6540 high and then above the 200-day moving average at .6570. Aware that while below the .6540/70 resistance zone, the risks are for a test of support at .6400/.6380. AUD/USD daily chart Source: TradingView Source:TradingView. The figures stated are as of 12 February 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.

With a history marked by robust FY23 results and recent controversies, all eyes are on the new CEO, Vanessa Hudson, and her team's ability to navigate challenges, enhance customer service, and capitalise on strong travel demand. Source: Bloomberg Shares Qantas Airline Company Executive compensation Written by: Tony Sycamore | Market Analyst, Australia Publication date: Monday 12 February 2024 03:46 When will Qantas report its latest earnings? Qantas Airways Limited (QAN) is Australia's flag carrier and the third oldest airline in the world. It reports its half-year figures on Thursday, 22 February 2024. Key financials Revenues of $10.61 billion expected Underlying Profit of $1.16 billion expected A Statutory Profit of $711 million expected EPS of $0.52 Soaring high: Qantas' record-breaking FY2023 performance Qantas reported bumper FY2023 earnings in late August, benefiting from strong demand for travel, a slimmed-down cost base, and high ticket prices. The report showcased the following highlights: The Group achieved an Underlying Profit Before Tax of $2.47 billion. A Statutory After-Tax Profit of $1.74 billion. This compares with $7 billion in accumulated statutory losses over three prior years. Earnings Per Share (EPS) of $0.93. Qantas revenue chart Source: TradingEconomics Turbulence ahead: controversies cloud Qantas However, the first half of 2024 was one of turmoil for Qantas. Beset by several controversies, including accusations of greed, misuse of power, and arrogance, the once much-loved company lost the trust of the public, acknowledged by outgoing Chairman Richard Goyder in the Qantas 2023 Annual Report: "As we move through our recovery, management and the Board are acutely aware of the need to rebuild your confidence in Qantas. We're also conscious of the loss of trust that has occurred because our service has often fallen short of expectations, compounded by a number of other issues relating to the pandemic period. Despite the apology, the company's annual general meeting in November turned heated as shareholders rejected the executive pay deal and criticised management for issues ranging from ghost flights, poor customer service, and preferential treatment to Prime Minister Anthony Albanese's son. Hopes that 2024 would provide a fresh start have been dashed following a report by former ACCC chairman Alan Fels, who accused the company of price gouging and recommended airport prices be formally regulated and restrictions on domestic and international aviation removed. Flight path to recovery: Qantas's operational overhaul After former CEO Alan Joyce's early departure, this will be the first set of results for the new CEO, Vanessa Hudson. Ms Hudson has made changes to the executive team and appointed consultant McKinsey for a major overhaul of its operations, focusing on improving its on-time performance. In its last trading update in September, the company noted that travel demand remains robust for the Qantas Group and that the first quarter of FY24 mirrors the strong trading conditions witnessed in the final quarter of FY23. While analysts expect to see higher spending on customer service to repair its tarnished image and higher fuel costs, Qantas is expected to unveil another set of robust earnings numbers. Source: Bloomberg Qantas technical analysis The Qantas share price and the company's reputation took a substantial hit in 2023, falling over 30% from a high of $6.94 in April to a low of $4.67 in October. Since that point, the share price has reclaimed about half of those losses to be trading at $5.72, just below resistance at $5.80, which is the 50% Fibonacci retracement of the decline from the $6.94 high to the $4.67 low. Above $5.80, there is a formidable layer of horizontal resistance at $6.00/$6.20 before the March 2023 $6.94 high. On the downside, near-term support is viewed at $5.50 before weekly uptrend support at around $5.00, coming from the March 2020 $2.03 low. Be aware that a sustained break of uptrend support would open the way for the price to test the October $4.67 low before a band of horizontal support at $4.20. Qantas weekly chart Source: TradingView Source: TradingView. The figures stated are as of 12 February 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG 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.

Boosted by tech giants, the S&P 500 and Nasdaq reach new highs. Investors await crucial economic data, including Jan's inflation figures, to discern the US economy's trajectory and Feds' next steps amid a lively earnings season. Written by: Tony Sycamore | Market Analyst, Australia Publication date: Monday 12 February 2024 05:26 On Friday night, the S&P 500 and the Nasdaq hit new record highs, buoyed by mega-tech companies including Nvidia, Amazon, and Alphabet. The Nasdaq increased by 1.81% for the week and is up 6.75% CYTD (Calendar Year To Date). The S&P 500 closed 1.37% higher for the week, at a 5.38% increase CYTD, while the Dow Jones finished the week flat, up 2.61% CYTD. Following a series of stronger-than-expected data this year, the Atlanta Fed's GDPNow forecast for Q1 predicts growth at 3.4%, prompting discussions on whether the US economy is slowing down or reaccelerating. Further insights will be provided by this week's key macroeconomic events, including inflation and retail sales reports for January and the Michigan Consumer Sentiment Index for February. The economic calendar also includes eight Federal Reserve speaker events, and the Q4 earnings season continues with reports from companies such as Coca-Cola, Airbnb, Lyft, Cisco, Robinhood, AMD, Dropbox, and Coinbase. What is expected from January’s inflation report Date: Wednesday, 14 February at 12.30am AEDT With stronger-than-expected data and less dovish Federal Reserve commentary, the market has almost completely discounted the possibility of a Fed rate cut in March. However, around five rate cuts are still priced in for 2024 compared to the three cuts suggested by the Fed, largely based on the ongoing disinflationary trend. The headline Consumer Price Index (CPI) is expected to rise by 0.2% in January, bringing the annual rate down to 2.9% YoY (Year on Year) from 3.4% previously. Core inflation is anticipated to increase by 0.3% MoM (Month on Month), which would see the annual core inflation rate ease to 3.7% from 3.9% YoY. The risk lies in potentially firmer-than-expected numbers. US headline CPI chart Source: TradingEconomics S&P 500 technical analysis After capitalising on the strong rally in the S&P 500 at the end of 2023, we entered the New Year with a more cautious and neutral mindset—a stance that has not been rewarding as the mega-tech frenzy pushed the market higher. Nonetheless, our assessment is that the S&P 500 is in the final stages (Wave V) of its rally from the low in October 2023, with continued evidence of bearish Relative Strength Index (RSI) divergence on the daily chart. Bearish RSI divergence occurs when prices hit new highs, but the RSI does not. Moreover, the S&P 500 cash level has now encountered trendline resistance at 5030, drawn from the December 1st high of 4100, as shown in the chart below. Therefore, we are not inclined to pursue the market at these levels and maintain the perspective that a pullback is imminent. S&P 500 daily chart Source: TradingView Nasdaq technical analysis After witnessing the remarkable rally in US equity markets in the final months of 2023, we approached the new year with increased caution—a strategy that has not yielded expected returns as the Mega Tech frenzy propelled the market upwards. Despite this, we maintain the perspective that the Nasdaq is approaching the final stages (Wave V) of its ascent from the low in October 2023. A decisive break or daily closure below the uptrend support at 17,300, originating from the October lows, would indicate that the Nasdaq has reached its peak and a more substantial retracement towards support levels at 16,200/16,000 could be imminent. Until such a break occurs, the Nasdaq's rally is likely to persist. Nasdaq daily chart Source: TradingView Source:TradingView. The figures stated are as of 12 February 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.

easyJet, Royal Mail, PZ Cussons, Wizz Air and Crest Nicholson could be the five best FTSE 250 stocks to watch next month. These shares have been selected for recent market news. Source: Bloomberg Indices Shares Royal Mail EasyJet Inflation FTSE 100 Written by: Charles Archer | Financial Writer, London The FTSE 250 has fallen by 2.1% year-to-date, 5.9% over the past year, and by more than 5,000 points since September 2021 to circa 19,100 points today. Unlike its older brother — the FTSE 100, whose constituents derive the majority of their income from overseas — the FTSE 250 is far more domestically focused. And on the question on whether the UK will see the desired soft landing — the jury is still out. In terms of fiscal policy, the spring budget is due to be announced on 6 March. Chancellor Jeremy Hunt has intoned that the scope for tax cuts is limited, a position also held by the International Monetary Fund. On the other hand, a general election must be held within the next 11 months, the Conservatives are trailing in the polls, and tax cuts can be popular with voters. In terms of monetary policy, there appears to be good news on the horizon. While the Bank of England has kept the base rate at 5.25% since September 2023, it now expects CPI inflation to fall to 2% by May. For context, Governor Andrew Bailey has specifically noted that ‘we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates.’ There is a danger that inflation could resurge later on in the year, as the impact of above-inflation pay rises and new supply chain challenges in the Red Sea poses fresh problems. But the markets are pricing in rate cuts in 2024, and this in theory will help the best FTSE 250 shares to grow. Of course, this potential advantage must also be weighed against recession risk, making investing decisions increasingly more complex. Top FTSE 250 shares to watch These shares have been selected for recent market news and are not investment advice. Crest Nicholson PZ Cussons Wizz Air easyJet Royal Mail Crest Nicholson Crest Nicholson's 2023 full-year results may make for poor reading — but for perspective, the UK housing market slowed drastically last year in response to rising mortgage costs and falling sales volume. Consequentially, the housebuilder saw revenue fall by 28% year-over-year to £657.5 million, reflecting ‘weakness in the housing market.’ And completions fell steeply from 2,734 in 2022 to just 2,020 in 2023 — with pretax profit falling from £137.8 million to just £41.4 million in the year. Profitability has been hit by increased costs at legacy sites including its Brightwells Yard regeneration scheme in Farnham, alongside a possible £13 million legal bill to settle costs arising from a 2021 fire at one of its apartment sites. Issuing its third profit warning in six months, outgoing CEO Peter Truscott noted that these were ‘a disappointing set of results in FY23.’ However, the company is getting a new CEO in the form of Persimmon’s chief commercial officer Martyn Clark. And the Barratt-Redrow merger could spark further interest in the company — especially at its current valuation. PZ Cussons PZ Cussons is also in hot water. The consumer goods titan’s half-year results saw the stock slump as it slashed adjusted operating profit forecasts for the full year to between £55 million and £60 million — down from previous expectations of between £61.5 million and £68.2 million, and also a significant drop from the £73.3 million generated in fiscal 2023. For context, revenue fell by 17.8% to £277.1 million between June and November — and the interim dividend was almost halved to just 1.5p per share. The key problem is arguably the devaluation of the Naira (Nigeria’s currency) as the country is responsible for more than a third of the company’s revenue. However, PZ Cussons still retains significant brand labels including Carex and Imperial Leather, and the current weakness may feel attractive to investors who are prepared to accept the risks. Wizz Air Wizz Air's recent Q3 results made for better reading: revenue jumped by 16.8% to €1,064.8 million, while passenger ticket revenue increased by 19.2% to €553.9 million. Meanwhile, the airline saw Available Seat Kilometres (multiply available seats on any given aircraft by the number of kilometres flown on a given flight) rise by a significant 26.9% year-over-year. And it saw record traffic of 15.1 million passengers in the quarter compared to just 12.4 million the year before. CEO József Váradi enthuses that ‘Wizz Air continued to deliver industry-leading capacity growth during the third quarter…while financial performance in the last quarter was materially affected by the suspension and reallocation of Israel capacity, we maintain our expectations for F24 net income.’ easyJet easyJet's Q1 results also appeared to be positive — while it made a headline loss before tax of £126 million, this was an improvement on the £133 million of a year ago. Passenger numbers grew by 14%, and easyJet Holidays remain a highlight, with profit more than doubling to £30 million. Perhaps most importantly in a forward-looking market, the airline reported ‘strong turn of year bookings with seats sold and yield ahead YoY.’ Further, is expects to see more than 25% year-on-year customer growth in easyJet Holidays for FY24. CEO Johan Lundgren enthuses that ‘we delivered an improved performance in the quarter which is testament to the strength of demand for our brand and network. The popularity of easyJet holidays also continues to grow, with 48% more customers in the period.’ However, the airline did take a £40 million hit from the Middle East conflict. Royal Mail Royal Mail’s parent International Distribution Services has seen adjusted operating losses in its recent half-year results rise by 45% year-over-year to £319 million. This was driven by lower parcel volumes and the cost of the pay settlement agreed with the Communication Workers Union. For context, the parent was fined £5.6 million recently for missing first and second class delivery targets over the 2022-23 financial year. However, regulator OFCOM is considering allowing Royal Mail to reduce its letter delivery service from the current six days a week to as little as three days a week — which could see profitability rise sharply. 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.

Asian stocks saw a mixed performance, with the Nikkei 225 and ASX 200 flat, while mainland China indices saw strong gains and the Hang Seng suffered fresh losses. The Nikkei 225 crossed the 37,000 mark for the first time in 34 years, as a weak yen lifted exporter stocks, and the broader Topix index also made a new high. A quiet end to the week sees European futures pointing to a muted open, while crude oil is calm after a 3% gain yesterday. Markets face a light economic calendar, with just Canadian job numbers on the agenda for the session.

We look at market breadth and its uses for traders and investors when looking at stock market indices. Source: Bloomberg Indices Stock market index Market trend S&P 500 Stock market Trader Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 08 February 2024 14:48 Understanding Market Breadth Market breadth is a powerful analytical tool used by traders to assess the health and direction of the overall market. It is a concept that looks at the number of stocks advancing versus those declining within a specific index such as the New York Stock Exchange (NYSE) or the Nasdaq. Market breadth is a form of technical analysis that provides insights into the underlying strength or weakness of market moves that are not always visible from the index's price chart alone. When more stocks are advancing than declining, it indicates a bullish sentiment, suggesting that investors are confident and are driving up prices. This scenario is often seen as a confirmation of a broad market uptrend. On the flip side, a greater number of declining stocks points towards bearish sentiment, which could be indicative of a potential downtrend in the market. Volume is a key factor that is sometimes included in market breadth indicators. The rationale behind this is that price movements with higher volume are deemed more significant as they represent a larger consensus among investors about the value of a stock. The Significance of Market Breadth Indicators Market breadth indicators come in various forms, each providing unique insights. These indicators are utilized to identify confirmation and divergence. Confirmation occurs when both the market index and the breadth indicator are moving in the same direction, which strengthens the case for the current trend. Divergence, however, is a situation where the market index and the breadth indicator move in opposite directions, signalling the possibility of a trend reversal. One commonly used market breadth indicator is the Advance-Decline Index, or A/D line, which shows the net difference between the number of advancing and declining stocks. This indicator can be particularly telling; for instance, if the S&P 500 (S&P 500) is on an uptrend while the A/D line is trending downward, it could imply that the uptrend is not supported by a broad base of stocks and may soon weaken. The New Highs-Lows Index is another tool that compares the number of stocks hitting 52-week highs to those touching 52-week lows. This indicator can suggest a bearish or bullish market depending on whether more stocks are at lows or highs, respectively. Additionally, the S&P 500 200-Day Index measures the percentage of S&P 500 stocks trading above their 200-day moving average. A reading over 50% suggests that the market is generally bullish. Extreme readings on this indicator can also help traders spot overbought or oversold conditions. The Cumulative Volume Index is an example of a volume-based indicator that adds up the volume from advancing stocks and subtracts the volume from declining stocks. The result is a cumulative total that helps traders gauge overall market sentiment. Leveraging Market Breadth for Trading Decisions Traders often rely on market breadth indicators to make informed decisions. These indicators can provide early warnings of a potential drop or rise in the index. However, it is crucial to note that market breadth indicators are not perfect timing tools. They can sometimes provide premature signals or fail to predict market reversals. Market breadth should be one of the tools in a trader's arsenal, but not the only one. It is important to use these indicators in conjunction with other forms of analysis, such as price movements and economic data, to create a more comprehensive trading strategy. The Role of Market Breadth in Investor Sentiment Market breadth is closely tied to investor sentiment. A market where more stocks are advancing demonstrates confidence among investors, while a market with more declining stocks may indicate uncertainty or fear. By analysing market breadth, traders can get a sense of the prevailing mood in the market, which can be a valuable piece of information when making trading decisions. Conclusion Market breadth indicators are vital tools for traders looking to understand the underlying movements of major stock indices. These indicators can reveal divergences and confirmations that are not immediately apparent from price charts. While they should not be the sole basis for trading decisions, they provide valuable context that, when combined with price analysis and other market data, can help traders navigate the complexities of the stock market with greater confidence. By understanding and utilizing market breadth, traders are better positioned to identify potential trends and make trades that align with the overall market momentum. 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.

Technical overview remains bullish, and retail traders’ short bias rises into heavy sell territory. Source: Bloomberg Indices Federal Reserve Market trend Nasdaq S&P 500 Technical analysis Written by: Monte Safieddine | Market analyst, Dubai Publication date: Thursday 08 February 2024 07:46 Sector performance puts tech on top Most sectors finished yesterday's session in the green, with defensives generally at the bottom. On top were tech, consumer discretionary, and communication—the exact trio needed to power the tech-heavy Nasdaq 100 higher to a record close, outperforming both Dow 30 and S&P 500. It was a record close for key large-cap equity indices, with added attention on the S&P 500 as it approaches 5,000. Light on data, heavy on Fed member speak There wasn’t too much impactful economic data out of the US: the trade deficit for December was not far off forecasts, consumer credit change for the same month plummeted to just $1.56 billion after the big and unexpected jump for November, potentially signifying a tested consumer in the next phase. Weekly mortgage applications were up 3.7%. But it was heavy on central bank member speak, with the Federal Reserve’s (Fed) Barkin on policy "very supportive of being patient to get where we need to get to," Kugler "pleased with the disinflationary progress thus far" expecting it to continue but any stalling in that progress means holding "the target range steady at its current level for longer," and Kashkari on interest rates expecting only "two or three cuts" and that there are "compelling arguments to suggest we could be in a longer, higher rate environment going forward." Treasury yields finished the session only slightly higher, and so did real terms. Market pricing (CME's FedWatch) still anticipates the first rate cut in May after holding in March. More Fed member speak is on offer today, along with the 30-year auction after yesterday's decent 10-year results. Nasdaq technical analysis, overview, strategies, and levels Its price eventually went beyond its previous 1st Resistance level, stopping out contrarian sell-after-reversals and favoring conformist buy-breakouts, even if the follow-through beyond it didn't reach its previous 2nd Resistance. The higher highs and record close have kept most of its key technical indicators bullish, and its ADX (Average Directional Movement Index) still in trending territory. In all, it remains a bullish technical overview, with added caution for conformist strategies only when buying on dips to key support levels. Source: IG IG client* and CoT** sentiment for the Nasdaq As for retail traders, they have upped their majority short bias to a heavy 67% from 63% yesterday morning, as fresher longs got enticed into closing out while shorts initiated. CoT speculators are an opposite heavy buy 65% according to last Friday’s report. 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 7am 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 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.

Apple, Amazon, Alphabet, Meta and Microsoft results have highlighted the growing importance of AI integration. Source: Bloomberg Shares Amazon Meta Platforms Microsoft Apple Inc. Artificial intelligence Written by: Shaun Murison | Senior Market Analyst, Johannesburg Publication date: Wednesday 07 February 2024 16:53 Key Takeaways: Meta Platforms, Inc. (META) and Amazon.com, Inc. (AMZN) have surpassed market expectations with their quarterly earnings and outlooks Microsoft Corporation (MSFT) has posted its strongest revenue growth since 2022, thanks in part to the impressive performance of its Azure AI services, which continue to attract new customers. Apple Inc. (AAPL) has returned to revenue growth despite challenges in the Chinese market, while Tesla, Inc. (TSLA) faces concerns about the sustainability of its growth and the impact of price cuts on profit margins. Alphabet's enterprise cloud and workspace services have seen substantial adoption, but its ad revenue has not met expectations. The current US reporting season has seen recent earnings releases from some of the biggest names in technology, namely: Apple, Amazon, Alphabet, Tesla, Meta and Microsoft. These companies make up six of the ‘magnificent seven’ tech shares, with the seventh (NVIDIA) still to report. Meta, Microsoft and Amazon results impress Meta Platforms, Inc. (META) and Amazon.com, Inc. (AMZN) have set a high bar with their quarterly earnings and outlooks surpassing market expectations. Meta has seen a substantial uplift in profitability, announcing its maiden dividend, a move that signals confidence in its long-term revenue streams. This comes on the heels of Meta incorporating advanced AI into its algorithms, enhancing ad targeting across its suite of social apps, which has led to increased ad impressions and a higher price per ad. Microsoft Corporation (MSFT) has also been a standout, posting its strongest revenue growth since 2022. The tech behemoth's success is partially attributed to the impressive performance of its Azure AI services, which continue to attract new customers. The enterprise business segments of these tech giants have been particularly robust, with corporate customers investing in cloud services, software platforms, and devices to enhance their operations. Microsoft and Amazon have benefited from their cloud offerings, with AWS experiencing a 13% growth in revenue and Microsoft's cloud business growing by 20%. Apple and Tesla economic cautions Despite a mixed global economic outlook, Apple Inc. (AAPL) has managed to return to revenue growth, although it has faced challenges in the Chinese market. Meanwhile, Tesla, Inc. (TSLA) has been a topic of intense debate, with concerns about the sustainability of its growth in the face of potential declines in electric vehicle demand and the impact of price cuts on profit margins. Alphabet Ad revenue under pressure Alphabet's enterprise cloud and workspace services have seen substantial adoption, although its ad revenue has not met expectations. Nonetheless, Alphabet's commitment to AI innovation remains steadfast, as evidenced by the development of its new AI model, "Gemini." AI integration helping drive revenue Similarly, to Microsoft’s’ success of its Azure AI services, Alphabet Inc. (GOOGL), through its subsidiaries Google Workspace and Google Cloud, and Amazon with its Amazon Web Services (AWS), have made significant strides by integrating AI-powered services, which have been instrumental in driving revenue. The ongoing AI revolution is reshaping the tech landscape, with Meta, Microsoft, Amazon, Apple, Alphabet and NVIDIA at the forefront. Their strategic investments in AI have not only enhanced their product offerings but have also led to more efficient operations and new revenue opportunities. However, these companies may face more regulatory challenges regarding their AI and cloud partnerships. 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.

Trading the trend: long USD/JPY USD/JPY is seeing a minor retracement lower which could be used to enter a long trade in the direction of this year’s uptrend. We would thus like to go long USD/JPY with a stop loss below ¥145.90 and an upside target at ¥152.00. Written by: Angeline Ong | Financial Analyst, Presenter and Content Editor, London Publication date: Wednesday 07 February 2024 14:28 Previous Arabica coffee trading outcome In this week's "Trading the trend" video, Axel Rudolph reflects on his recent trades and talks about their current positions. He started by betting on the price of Arabica coffee to go up. He entered the trade when the price was around 186 and watched it climb to 194. However, things took a turn and the price went down, causing them to sell at his entry level. Current New York cotton futures trading progress Next, he moves on to his current trade in New York cotton futures. He entered at about 85.70 and are currently making a profit. To protect his gains, he raised the level at which he would sell if the price goes down, so he doesn't lose anything. He has set his sights on a target price of 90, which he sees as a strong resistance level based on previous market behavior. This week's trading opportunity For his trade this week, he plans to jump on the upward trend of the USD/JPY. He sees a temporary drop in the price as an opportunity to buy. He bases his decision on the difference in interest rates between the US and the Bank of Japan. The Bank of Japan has a cautious approach, while the US is more optimistic. He believes the upward trend will continue in the upcoming days and weeks, particularly if the price breaks through recent highs between 148.80 and 18.90. With all of this in mind, he suggests buying USD/JPY at its current price, and setting a level at which he would sell if the price drops further. He also set an upside target at around 152, meaning he expects the price to go up to that level. By carefully managing his trades and considering market trends, he aims to make successful trades and achieve profits. 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.

Overnight, stocks in the Asia-Pacific region were mixed following the fresh record levels seen on Wall Street, where the S&P 500 came within a whisker of 5000, though the Nikkei 225 managed a 2% gain. Soft Chinese data ahead of the Lunar New Year holiday kept sentiment in check overall. The Reserve Bank of India (RBI) kept the Repurchase Rate unchanged at 6.50%, as expected, and maintained its stance of remaining focused on the withdrawal of accommodation. European equity futures are indicating a slightly higher open, taking their cue from a positive session on Wall Street. US jobless claims are the main event scheduled for today.

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These five FTSE 100 dividend shares could be some of the best to watch next month. They are currently the highest yielding on the index. Source: Bloomberg Indices Shares Dividend FTSE 100 Investment Stock market index Written by: Charles Archer | Financial Writer, London Down 1.4% year-to-date, the FTSE 100 has once again started the year by underperforming the S&P 500 and Nasdaq Composite. Of course, the index is famously viewed as a more conservative investment — filled with mature banks, oilers and miners which pay out dividends rather than focus on capital growth. For context, the FTSE 100 rose slightly in 2022 as interest rates rose sharply, while the Nasdaq fell into a bear market. Over the longer term, the US stocks have historically outperformed the UK (though past performance is not an indicator of future returns), but the best FTSE 100 dividend stocks are often included in portfolios for the relatively reliable income. Of course, many FTSE 100 companies deliver high dividend returns — though many are cyclical and the highest returns on offer may not be sustainable. It’s worth noting that popular dividend companies tend to attract significant investment in times of macroeconomic stress, which can become a problem as the economy improves and investors sell shares to seek more lucrative opportunities elsewhere. On the monetary policy front, the Bank of England has once again kept the base rate at 5.25% — a rate it has kept since September 2023 — though now expects CPI inflation to fall to 2% by May. While it has signalled that rate cuts may be incoming, the Bank has also warned that it would need to see evidence that inflation was sticking to the target level first. For context, the Bank still expects that inflation will rise back above the target range later this year due to robust pay growth and the fading impact from lower energy prices. Governor Andrew Bailey has specifically noted that ‘we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates.’ On the fiscal policy front, the government will issue the spring budget on 6 March. While Chancellor Jeremy Hunt has tried to make clear the scope for tax cuts is limited — especially after the recent IMF intervention — the political reality is that this may be the last major fiscal policy in place before the General Election. Top FTSE 100 dividend shares to watch These shares are the highest yielding on the index as of 5 February 2024. They may not be the best investments and the dividends and capital itself are not guaranteed. Vodafone Phoenix Group British American Tobacco M&G St James's Place Vodafone Today’s Vodafone quarterly update received a mixed reaction from the markets —total organic revenue grew by 4.7%, a significant improvement on the 1.8% growth of a year ago. The company remains one of the largest telecoms companies in Europe, and the current strategy may be delivering. Global services revenue is up by 8.8% while the B2B division grew by 5% year-over-year. Further, the all-important German sales rose by 0.3% in the quarter. However, the company is actually losing customers in the region, with the revenue growth driven by price increases. The key risk could remain the circa £55 billion debt mountain, which remains multiples of Vodafone’s market capitalisation. However, the company remains confident in previous guidance for future underlying earnings — and with a price to equity ratio of just 2, it may be attractive to value investors. Dividend Yield: 11.2% Phoenix Group Phoenix Group's recent trading update saw the company deliver £1.5 billion of new business long-term cash generation in 2023, achieving its 2025 target much earlier than expected. CEO Andy Briggs remains ‘delighted that Phoenix Group has delivered another year of strong organic growth in 2023, with increased new business net fund flows supporting us… we have achieved our 2025 new business long-term cash target two years early, reflecting the focus and investment we have put into our growth strategy.’ For context, new business net fund inflows rose by circa 80% year-on-year to £7 billion, driven by improved performances at the Standard Life branded Pension & Savings and Retirement Solutions segments. Within pensions and savings, Phoenix’s workplace business saw net fund flows nearly double year-over-year to circa £4.5 billion. According to Briggs, this included ‘the transfer of one of the largest workplace schemes tendered in the UK market in recent years.’ Dividend Yield: 10.3% British American Tobacco British American Tobacco is due to report full-year results this week — but despite the high dividend, the company is once again bracing for poor numbers. Analysts consider that the company will deliver revenue growth of between just 3% and 5% due to difficulties in the US market. For context, the FTSE 100 tobacco company wrote off £25 billion of its US brand portfolio recently after acknowledging they have ‘no long-term future.’ Compounding the weak combustibles growth, the UK recently announced a ban on disposable vapes which could hit BATS’ long-term ambitions in non-combustible categories — though may also drive out cheaper brands, especially if similar bans are introduced elsewhere. Positively, the titan and competitor Philip Morris International have finally agreed an eight-year long resolution to long running patent disputes on their cigarette alternatives technology. Dividend Yield: 9.8% M&G M&G plans to generate operating capital amounting to £2.5 billion by the end of 2024 and had achieved more than 50% of this three-year target, 18 months in. Moreover, 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. 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 enthused 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.’ Full-year results will be released in March. Dividend Yield: 9% St James’s Place Shares in St James's Place have nearly halved over the past year, with the wealth manager now reporting that it saw only £5.1 billion in net inflows in the 2023 calendar year — compared to £9.8 billion in 2022. However, it remains the largest wealth manager in the UK, with more than 900,000 clients and total funds under management now standing at a record £168.2 billion, up from £148.4 billion at the end of 2022. New CEO Mark FitzPatrick plans to launch an efficiency review into the business within the next few months — partially driven by its October announcement to radically overhaul its fee structure in response to pressure from the Financial Conduct Authority, including scrapping exit fees to clients withdrawing from pension and bond investments early. Dividend Yield: 8.2% 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.

BoE's unexpected hawkish stance delays rate cut hopes, pressuring the FTSE amid revised lower unemployment rates and sustained inflation forecasts. Source: Bloomberg Indices Inflation Unemployment Technical analysis Bias DAX Written by: Tony Sycamore | Market Analyst, Australia Publication date: Tuesday 06 February 2024 06:08 Last week's Bank of England (BoE) meeting delivered a more hawkish-than-expected outcome, just as the FTSE was building towards another attempt to break higher. While the BoE kept rates on hold at 5.25% as expected and removed its tightening bias, several hawkish elements stood out. Two policymakers voted for another 25bp rate hike. The bank's latest inflation forecasts showed inflation above target during H2 2024 and 2025. The BoE reiterated that "monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2% target", dampening hopes of imminent rate cuts. The UK rates market, which did have a first BoE 25bp rate cut priced for June and a total of 100bp of rate cuts priced for 2024, responded by pushing back expectations of a first cut until August and now has only three rate cuts priced for 2024. To make matters worse, revised data overnight showed the UK's unemployment rate was at 3.9% in the three months to November, the lowest level since April last year and significantly below the initial print of 4.2%. Cooling in the labour market is necessary to relieve inflationary pressures, and to enable the BoE to cut rates. UK unemployment chart Source: BoE FTSE technical analysis For the past eight months, the FTSE has been encapsulated below horizontal resistance at 7750ish and above support at 7200. While the FTSE remains above the 200-day moving average at 7556, it remains positioned to set up another test of the horizontal and trendline resistance at 7730/60. If the FTSE can see a sustained break above the aforementioned resistance band, it would warrant moving from a neutral bias to a bullish bias, looking for a test of the April 7936 high, with the scope to the 8047 high. Aware that while the FTSE remains below resistance at 7750ish, more range trading is likely. FTSE daily chart Source: TradingView DAX technical analysis In recent updates, we noted that due to the nature of the three-wave nature decline from the early Jan 17,123 high to the mid-Jan 16,464 low, it was likely a correction, and that the DAX should push to new highs in the 17,200/400 area. While the DAX has yet to print a fresh cycle high, we wouldn’t be giving up on it just yet. Neither would we be chasing the market higher, as we remain of the view a 5-10% pullback is not too far away. DAX daily chart Source: TradingView Source: Tradingview. The figures stated are as of 6 February 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG 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.

Embark on a captivating journey with us in the next installment of our Sentiment Study series, as we delve into the intriguing worlds of the FTSE 100 and the DAX 40—also known as the Germany 40 in IG's trading realm. Written by: Monte Safieddine | Market analyst, Dubai Publication date: Wednesday 07 February 2024 01:57 Today, we're peeling back the layers of market sentiment to reveal a fascinating contrast: a prevailing inclination towards bullish positions among IG's clients in one index, juxtaposed with a strategic dance of range-trading in the other. As we navigate through this tale of two indices, we'll uncover the underlying currents that drive investor behavior and market dynamics. Join us as we dissect the reasons behind the steadfast confidence in one market and the cautious maneuvering in another, offering you a richer understanding and sharper insights to refine your trading strategy. This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

The US dollar eases after strong payroll and ISM services PMI data suggest economic resilience, potentially delaying Fed rate cuts. Source: Bloomberg Forex Interest Interest rates Interest rate Economy United States dollar Written by: Richard Snow | Analyst, DailyFX, Johannesburg Publication date: Wednesday 07 February 2024 07:57 Economic data and Fed speakers to provides tailwind for the dollar The dollar is slightly softer at the time of writing, but is coming off a massive two-day advance after Friday’s non-farm payroll report revealed a significant beat to the upside. The labour market not only looks robust but appears to be in the ascendancy, after the December figure received a massive revision higher. Further evidence of a resilient economy, despite restrictive monetary policy, appeared via the ISM services PMI readings below. The headline reading beat the forecast of 52 as well as the prior 50.5, continuing the expansion in the services sector for 13 straight months now. Source: DailyFX Some of the more interesting stats appear within the sub-sections of the report like ‘new orders’, ‘prices’ and ‘imports’ which all saw notable improvements. New orders is often used as a proxy for future economic conditions; the increase in prices suggests increased costs of shipping in the Red Sea is being passed down to the consumer. Imports posted the largest month-on-month percentage change of all the categories, and suggests consumption and spending are strong. In addition, a lesser observed report called the Senior Loan Officer Survey (SLOOS) revealed that credit providers are less reluctant to extend credit (greater supply) while demand for credit made marginal progress. The report was a main focus around the time of the regional banking instability and has come back onto the radar again after New York Community Bancorp had to cut its dividend – sending other regional bank shares lower with it. Economic strength defies interest rate pressures, influencing Fed decisions and dollar dynamics The above data is not consistent with an economy that ought to be constrained by elevated interest rates – suggesting that the start of rate cuts may need to be pushed back even further. As such, US yields and the dollar have risen in recent sessions.The dollar basket (DXY) is viewed as a benchmark of broader dollar performance and witnessed massive gains on Friday, which continued into Monday. Today however, prices have eased back a tad, ahead of the 104.70 level which has acted as support in September and November 2023. The Fed’s very own Neel Kashkari seemed surprised at the US economy’s strength, suggesting that the current level of interest rates is not having as much of an impact as would typically be the case if the neutral rate hadn’t been shifted higher. The neutral rate is a theoretical rate that is neither restrictive of supportive to the economy and is said to be higher in the post-Covid period. Price action remains above the 200-day simple moving average and could continue with the help of additional Fed speakers who are lined up today to provide their thoughts on monetary policy and interest rates. Further talk about the impressive economic data and the need to move cautiously before deciding to cut rates could add to the recent USD advance. US dollar basket (DXY) daily chart This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Gold prices are in the green after two days of big falls; last week’s news of US labor market strength continues to weigh. However, falls have been more limited than other assets. Source: Bloomberg Forex Commodities Gold Gold as an investment Federal Reserve Investment IG Analyst Publication date: Wednesday 07 February 2024 05:21 Gold prices have managed some modest gains on Tuesday, after a punishing few sessions, courtesy of the United States’ labor market and the Federal Reserve. Last week’s news of astonishing job creation has seen interest-rate-cut bets taken off for March, although a May move remains very much in play. This will hugely benefit the dollar. The prospect of US borrowing costs remaining higher for longer has taken a clear, obvious toll on gold - in a double whammy for the metal. It suffers once by virtue of being non-yielding; and then again thanks to the fact that so many gold products are priced in US dollars, so more expensive for everyone trying to pay for them with other currencies. It’s notable, however, that gold has suffered rather less from last week’s play than some other assets (such as sterling). The current broad market scene still offers perceived haven assets like the precious metal plenty of support. After all investors are fretting the prospect of a tougher battle against inflation and a broad spectrum of geopolitical risk from Gaza, the Red Sea, Ukraine, the South China Sea and so on. China’s economic underperformance is also simmering away. Given all of that, it’s perhaps not too surprising that prices have remained above the important $2000/ounce level, even as the dollar’s strength has brought that level rather closer to the market.We’re heading into a rather quieter period of scheduled economic data, which will leave gold prices in thrall to general market risk appetite and, in all likelihood, whatever coming individual Fed speakers have for the market. Gold prices technical analysis Prices are once again testing the bottom of their wide, dominant uptrend channel from mid-November, an extension of the gains made since early October’s lows. The tell-tale higher highs and higher lows of a ‘pennant’ formation are also visible on the daily chart. As a continuation pattern this ought perhaps to indicate that prices will begin to rise again once it plays out, as they did before, but there’s obviously no guarantee they will. For now, the uptrend channel offers support at $2030.25 level, with 17 January’s intraday low of 1972.88 lying in wait should that give way. A conclusive break of the uptrend, however, might mean a deeper retracement. Near-term resistance is at 2 February’s top of $2056.96 ahead of trendline resistance at $2063.84. IG’s own sentiment data on gold is mixed, but, with 64% of traders coming to the metal from the bullish side, enough to suggest that the market is looking for modest gains at current levels. Gold price daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Overnight, stocks in Asia were mostly positive following a decline in global yields and additional support efforts from China. However, the Hang Seng and Shanghai Composite saw early momentum fade, as doubts persisted over the abilities of the authorities to power a sustainable rally. FOMC member Mester said that the Fed could lower interest rates later this year if the economy performs as expected. She also mentioned that any rate cuts would likely be implemented gradually, without providing a specific timeline. The line from the ECB continues to be more hawkish, with German member Schnabel saying that a too-hasty move to cut rates could lead to a revival in inflation. Uber, Disney and PayPal earnings are expected today, while just EIA crude oil inventories are on the calendar for economic data.

The Reserve Bank of Australia (RBA) joined in the cautious line from central banks, pushing back against expectations of imminent rate cuts. While policy was left unchanged, the RBA did note that inflation was easing. However, it also lowered its near-term outlook for growth due to a weaker consumer spending forecast. Chinese markets enjoyed a solid session, which saw the Hang Seng gain 3.8%, the Shanghai composite rise 2.7% and the Shenzhen composite gain a remarkable 6.3%. Chinese regulators said that they would guide institutional investors to raise stock investments, and also encourage listed companies to raise their level of share buybacks, moves which follow on from the decision to shore up the market with $17 billion last week. A quieter day on the economic front lies ahead, though earnings from Ford will be of interest.

The Magnificent Seven – Apple, Alphabet, Amazon, NVIDIA, Microsoft, Meta Platforms, Tesla – individually soared between around 50% and 240% in 2023. But are they still a buy? Should you cherry pick, or are they looking risky? Written by: Angeline Ong | Financial Analyst, Presenter and Content Editor, London Publication date: Monday 05 February 2024 14:34 The outlook of the Magnificent Seven in 2024 In 2023, a group of seven influential companies, known as the Magnificent Seven, had a big impact on the market. These companies include Microsoft, Meta Platforms, Tesla, Apple, Alphabet, Amazon, and NVIDIA. Now, after their earnings reports, investors are wondering if these companies are still a good investment. Amazon Let's start with Amazon. Their shares went up after a strong performance in the December quarter. They surpassed revenue expectations, especially in online spending during the important holiday season. Alphabet On the other hand, Alphabet, the parent company of Google, disappointed investors with lower sales than expected in holiday season advertising. They also announced that they would be spending more on AI infrastructure, which raised concerns about costs. Microsoft Microsoft did better than expected in terms of profit and revenue. However, investors started to question whether the money they were putting into AI would pay off in the long run. Despite that, Microsoft's new AI features have been attracting customers to their Azure cloud services. Meta Meanwhile, Facebook reached a record high in its stock price and is now valued at around $1.1 trillion. Their revenue also increased by 25% due to strong advertising and device sales. Apple Apple had some challenges in China as their sales in the country fell short of estimates. This disappointment caused a decline in Apple's stock price. They also faced tough competition in China as they released their Vision Pro. Tesla Lastly, Tesla had a major setback. Their shares dropped to the lowest point in eight months, leading to a loss of about $80 billion in market value. This drop came after Elon Musk warned of slower growth in 2024. In conclusion Given these circumstances, investors might choose to take their profits and diversify their investments. However, some argue that these companies have become safe bets because of their large size, making them less likely to fail. Ultimately, the decision to buy, hold, or sell stocks from these companies depends on each individual's perspective and investment strategy. 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.

While oil prices have been steadier, BP is expected to report a weaker performance at its upcoming quarterly results. Source: Bloomberg Shares Commodities BP Price Petroleum Investment Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 05 February 2024 13:05 BP earnings – what to expect? BP's underlying adjusted net income for the fourth quarter (Q4) is expected to decrease to $3 billion, according to consensus estimates. The company′s adjusted cashflow is projected to be around $6 billion. The key drivers of performance in the Q4 include relatively stable oil and gas prices, as well as softer global refining margins. Gas trading may continue to be weak due to low volatility in the market. In terms of financial decisions, BP is likely to maintain buybacks at $1.5 billion in the Q1. The dividend could see a small increase after a 10% raise in the first half of 2023, bringing it to 7.27 cents. BP's balance sheet is expected to show net debt in the range of $22 billion, with a leverage ratio of 20% based on IAS-17 accounting standards. High upstream production to aid performance The company's resilience is particularly noteworthy, as recent operations suggest that BP is poised to achieve its highest upstream production in the Q4, with over 2.3 million barrels of oil equivalent per day. This robust production level is a testament to BP's robust operational capabilities and strategic positioning in the face of a broadly stable commodity-price environment. While full inventories and a flat market structure have indicated a potential for underwhelming gas-trading gains, it's important for traders to consider the broader context. Low volatility, although presenting challenges in trading, can also offer a stable ground for strategic decision-making and long-term investments. However, the potential unknown swing factor in this equation is oil trading, which could significantly impact BP's financial performance depending on market movements and company trading strategies. On the downstream front, BP is confronted with a sharply lower refining margin and availability, which contrasts with the previous quarter where these factors provided a substantial offset for earnings weaknesses. This shift underscores the importance of diversification within a company's portfolio—a lesson for traders who similarly seek to balance their investments to mitigate risks. New CEO on the cards As for leadership, the market is anticipating the conclusion of BP's CEO search. The likelihood of interim CEO Murray Auchincloss being appointed as the permanent CEO represents continuity and stability for the company. Auchincloss, already familiar with BP's operations and strategy, is expected to maintain the current course rather than introducing radical changes. For traders, the potential appointment of Auchincloss should be seen as a signal of steady leadership, which could translate into continued resilience and reliability in BP's performance. This is an essential factor to consider when evaluating BP's stock for one's portfolio. Analyst ratings for BP Refinitiv data shows a consensus analyst rating of ‘buy’ for BP with 6 strong buy, 10 buy, 6 hold and 1 sell – and a mean of estimates suggesting a long-term price target of 602.71 pence for the share, roughly 33% higher than the current price (as of 5 February 2024). Source: Refinitiv Technical outlook on the BP share price BP’s share price, which recovered from its January 15-month low at 441.05 pence low, only managed to rise to last week’s high at 471.90p before resuming its descent towards the key long-term 455.00p to 441.05p support zone. BP Weekly Candlestick Chart Source: TradingView The decline in the BP share price from its October 2023 peak at 562.3p remains firmly entrenched and will continue to do so as long as no bullish reversal takes it above its early January high at 481.40p. BP Daily Candlestick Chart Source: TradingView A drop through the 441.05p January low would open the way for the February 2022 high and the September 2022 low at 421.10p to 419.15p to be reached. 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.

Stronger US dollar sinks gold, WTI and silver prices Friday’s impressive US jobs report gave the dollar a big lift, while putting fresh pressure on commodity prices. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 05 February 2024 12:43 Gold goes into reverse Friday’s strong payroll report bolstered the dollar and hit gold, though it managed to hold its ground above the 50-day simple moving average (SMA). However, it is a different story this morning. The price has fallen sharply in early trading and is now back below the 50-day SMA. It is testing previously-broken trendline resistance from the late December high. If this holds, then buyers will need to push the price on above $2060 to signal a renewed bullish outlook. Conversely, further declines below the mid-January low at $2000 will open the way to the 100-day SMA, and then to the early December low around $1975. Source: ProRealTime WTI pullback reaches trendline support Friday’s sharp losses built on the existing weakness in oil prices, and took WTI back below the 50-day SMA. This has reversed almost all of the bounce seen since mid-January, and fresh losses appear to beckon. This then takes the price on towards $70.45, an area of support during the first half of January. Below this lies the lows of December around $68.40. Buyers will need a recovery above $74 to suggest that a low has formed for now. One hope for a recovery remains in the form of potential trendline support from the December low. Source: ProRealTime Silver price slump intensifies Silver prices suffered a reverse on Friday, and have taken further losses this morning, like gold. Having rallied from their mid-January low, the price hit resistance around $23.25 as they did earlier in January. A turn lower has taken the price back below trendline resistance from early December, and now a move to the $22 low of January. Notably, this was also the low from mid-November, before the price began its sharp ascent into the December high. A close below these lows could see further losses towards October’s bottom around $20.80. Source: ProRealTime