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ArvinIG

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  1. ArvinIG

    Boohoo shares face recession headwind

    By ArvinIG,


    Analyst article
    The online fashion retailer reported full-year results this week

    Source: Bloomberg   Shares Boohoo.com Recession United Kingdom Capital expenditure Retail   Boohoo.com gave its investors something to cry about as its full-year profits slumped and the company warned of further challenges to come. Full-year pre-tax profits at the online fashion retailer collapsed by 94% to £7.8m (from £124.7m last year), despite revenues rising 14% to £1.98bn.

    UK sales at the Aim-quoted firm increased by 27% during the period. However, net cash dwindled from £276m to just £1.3m and gross margins slipped by 170 basis points to 52.5% (from 54.2%). Shares fell by 10% on the results day.

    However, Boohoo’s management says the company is growing market share and is better positioned for the future than it was two years ago. “Over the past two years, we have significantly increased market share in our core geographies of the UK and the US, and we have grown active customer numbers by 43% across the group to 20 million,” group chief executive John Lyttle told investors.

    “Our focus over the past two years has been on investing to build a strong platform, with the right infrastructure, supported by increased capacity to better serve our customers.”

    Boohoo warns on outlook

    However, the company also says the issues that have plagued it following the pandemic look set to continue for the immediate future. These include “uncertain consumer demand,” higher freight costs, tough comparative figures from previous years and pressure on sales growth from higher product return rates.

    As such, revenues for the first-quarter will be flat, although the retailer’s performance is expected to improve in the second-quarter and second-half as profits tend to be weighted towards the latter-half of the year.

    Boohoo now anticipates sales growth in the “low single digits” – analysts had previously pencilled in around 9%.

    “In the year ahead we are focused on optimising our operations through increasing flexibility within our supply chain, landing key efficiency projects and progressing strategic initiatives such as wholesale and our US distribution centre,” said Lyttle. “This will ensure that the group is well-positioned to rebound strongly as pandemic-related headwinds ease.”
    With the Bank of England now warning the UK may enter a recession last year, pressure will continue to bear on consumers' pockets. But with inflationary pressures, Boohoo could have to raise prices on its clothing.
    Retailer couples cost cuts with costly capex
    The company says it has embarked on a cost cutting programme, is targeting stock control improvements and trying to source its product more efficiently. However, it is also building a new distribution centre in the US.

    Liberum analyst, Wayne Brown, was critical of management’s focus on capital expenditure programmes. “With margins declining, sales hard to come by and competition as rife as we have ever seen it, layering on debt and doing expensive capex projects seems unfortunate timing,” he said in a note.

    Boohoo shares are down 76% in the past year and currently trade at 74.76p. They could be a recovery play or even a takeout target at these levels. But with inflationary headwinds continuing and a UK recession on the cards, a share price revival could take some time.

    Piper Terrett | Financial writer, London
    07 May 2022
  2. ArvinIG
    Retail traders are increasing upside exposure on Wall Street and this is offering bearish signals for S&P 500 and Dow Jones.

    Source: Bloomberg   Indices Shares S&P 500 Dow Jones & Company Risk Investment   In recent days, the S&P 500 and Dow Jones have been aiming cautiously lower, reversing some of the upside progress seen throughout March. This is as retail traders have been slowly increasing their upside exposure on Wall Street, as seen using the IG Client Sentiment (IGCS) indicator. The latter can at times function as a contrarian indicator. With that in mind, is there more pain in store for Wall Street ahead?
    S&P 500 sentiment outlook - bearish
    The IGCS gauge shows that about 52% of retail traders are net-long the S&P 500. Since the majority of them are biased to the upside, this hints that prices may continue falling. Over the past day and week, downside exposure has decreased by 6.1% and 14.7% respectively. Taking these into consideration, recent shifts in positioning are offering a stronger bearish contrarian trading bias.

    Source: DailyFX S&P 500 futures daily chart
    Taking a look at the daily chart, the S&P 500 could be carving out a bearish Head and Shoulders chart formation. The left shoulder has its beginnings from the summer of 2021, with the head peaking at the all-time high of 4808.25. Prices recently formed the right shoulder after finding a high of 4631 in March. Getting back to the neckline would place the focus on the 4101 – 4140 support zone.
     

    Source: TradingView Dow Jones sentiment outlook - bearish
    The IGCS gauge shows that 46% of retail traders are net-long the Dow Jones. Since most traders are still biased to the downside, this is a sign that prices may continue rising. Upside exposure has fallen by 5.2% compared to the past 24 hours. This is as downside bets declined by 6.42% over the same time. With that in mind, it seems that the Dow may soon reverse lower despite most retail investors remining net-long.

    Source: DailyFX Dow Jones futures daily chart
    From a technical standpoint, Dow Jones futures may be vulnerable to further losses. Prices recently confirmed a bearish Evening Star candlestick pattern. Immediate support appears to be the 34002 inflection point. Clearing the latter then exposes the wide range of support between 32902 – 33623. Turning higher and closing above 35281 may open the door to revisiting the February peak at 35752.

    Source: TradingView This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.

    Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco
    13 April 2022
  3. ArvinIG

    Easter Trading Hours 2022

    By ArvinIG,


    Trading hour changes
    Dear IG Community,

    Please find below the upcoming changes to our trading hours over the Easter period.

    UK:

    Australia:

    Feel free to reach out if you have any query and Happy Easter !

    All the best - Arvin
  4. ArvinIG
    Find out what to expect from Netflix’s earnings results, how they will affect Netflix share price, and how to trade Netflix’s earnings.

    Source: Bloomberg   Shares Netflix Price Relative strength index Big Tech Market maker   When is Netflix’s results date?
    Tuesday 19 April, after the market close is when traders and investors can get their hands on the streaming giant’s first quarter (Q1) earnings results.
    Netflix share price: forecasts from Q1 results
    And give it’s the first of the FAANG (Facebook, Apple, Amazon, Netflix, and Google) to release its figures, it has a tendency to be a closely watched event with implications not just for other streamers aiming to mimic its success in being at the very top, but for other growth and tech related companies.
    Analysts’ forecasts are for an earnings per share (EPS) reading of $2.9 for Q1, below the $3.75 EPS seen for the same period last year. That estimate has been little changed over the past two months. As for revenue, they’re hoping for over $7.9 billion (source: finance.yahoo.com).
    As for last time around when it released Q4 results back in January, it was a beat on earnings ($1.33 vs $0.82) while a match on revenue ($7.71 billion). What struck a big nerve then that sent its share price tumbling 20% after its 2021 Q4 earnings was the miss on subscribers from the 8.5 million it had forecasted, and an outlook that surprised to the downside.
    Expecting to add 2.5 million this quarter instead of prior expectations from analysts of 6.93 million and well above what it enjoyed last year at 3.98 million wasn’t taken well given the reception in the financial markets to its share price. And that means subscriber growth is likely to be the main item in focus this time around with a withdrawal from Russia noted, also taking a look at guidance for the quarter we’re currently in.
    That “added competition may be affecting our marginal growth” was a key takeaway from Q4 shareholder letter, this as it remains the pricier option amongst most streaming companies. Any update or change in thought process on that front ought to be taken into consideration, as well as the ongoing push into gaming after another acquisition late last month.
    Overall, it’s a majority buy rating with few daring to go into the ‘underperform’ and ‘sell’ categories as mostly either ‘hold’ or ‘buy’, with a decent amount going for ‘strong buy’. It gets interesting with the price target, the average going for a price target above $500 from where it currently stands at around $352 (source: finance.yahoo.com).
    Trading Netflix’s Q1 results: weekly technical overview and trading strategies
    Although earnings are about the fundamental aspect of the company, a brief glance at the technicals and they haven’t been too kind to say the least, especially when zooming out to the weekly time frame seen in the chart below.
    Ratings upgrades amongst some (like Citi) and big money from others (like Bill Ackman’s Pershing Square fund back in January following the drop then) were thought to have helped assuage fears that its share price hasn’t met its floor yet, only to disappoint thereafter.
    Prices are beneath all its main short and long-term weekly moving averages, with a relative strength index (RSI) shy of oversold territory, its directional movement index (DMI) showing a decent enough margin of the negative directional indicator (DI-) over the positive directional indicator (DI+), and with an average directional movement index (ADX) still in trending territory.
    The bulk of this negative technical bias is attributed to the move last January and zooming into the daily time frame shows more consolidatory tendencies, albeit still somewhat negative as it approaches the lower end of the daily Bollinger Band with a negative DMI cross not far off from occurring in the shorter-term time frame.
    In all, when it comes to the weekly time frame, and the technical overview is a stalling bear trend in terms of classification, while in terms of strategies one where conformist strategies clearly haven’t won out over the last few months on what have been some rangebound weeks offering little if any follow-through to the downside, testing sell-breakout strategies at times.
    That could change when doused with a major fundamental event like next Tuesday’s, especially as traders, market makers, and investors will remember the double-digit percentage drop last time around and will be eyeing a move well past levels formulated on more recent price action, making it more breakout vs. reversal.

    Source: IG Charts Netflix Weekly Chart with key technical indicators

    Source: IG Charts Netflix Weekly Chart with IG Client sentiment*

    Source: IG Charts IG Client sentiment* and short interest for Netflix shares
    It’s been heavy to extreme buy bias amongst retail traders for months now (blue dotted line in the chart above as % long i.e., 91% means 91% majority buy). And while traders were enticed into taking profit from August until about September, the pullback off the highs and the bear trend that ensued only pushed that buy bias into extreme buy territory, the latest reading at 96% and little changed week-on-week (WoW).
    As for sentiment on the exchange, the number of current shares short stands at around 9.7 million, a bit higher than when it announced its earnings last time around and represents 2.21% of the total number of shares floating (source: shortsqueeze.com).

    Source: IG Charts  
    * The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of the start of the week for the outer circle, and the start of last week for the inner circle.

    Monte Safieddine | Market analyst, Dubai
    12 April 2022
  5. ArvinIG

    What to expect from the April ECB meeting?

    By ArvinIG,


    Analyst article
    Given the uncertainty around inflation and the war in Ukraine, the ECB may find it is unable to do much to alter its policy outlook.

    Source: Bloomberg   Forex European Central Bank Euro Inflation EUR/USD United States dollar   What to expect from the ECB meeting
    It seems each European Central Bank (ECB) meeting finds the bank confronting more difficult circumstances than the last. No policy changes are expected, but with inflation still rampant and the war in Ukraine having a significant effect on the eurozone economy. The latter’s impact is still hard to discern, so the bank will not wish to rush into making forecasts without sufficient information.
    It looks like the best course is to stick to its plan and stated view that interest rate increases will only come after the end of the asset purchase programme (APP). The APP is still to be wound down, with an end date sometime after June expected.
    What do markets think will happen?
    Current pricing points towards around 115 basis points (bps) of rate increases over the next twelve months, according to Reuters polls. Anything more than this is likely to provide at least a short-term boost for the euro, but with the Federal Reserve (Fed) now openly discussing a 50 bps rate rise in May the euro will struggle against the dollar.
    Ultimately, a decision to hold fire on any policy changes for now may be the least worst option for the ECB, given that other moves around fighting inflation risk pushing the eurozone economy towards a new recession.
    EUR/USD outlook
    In our EUR/USD technical analysis for 11 April, our market analyst Axel Rudolph wrote:
    ‘Following seven consecutive lower daily prices in EUR/USD, the currency pair stabilises above its $1.0806 early March low as France’s first round of its presidential election led to the incumbent Emmanuel Macron leading his rival Marine Le Pen by over 4% of the vote, better than some market participants had expected.
    Volatility is likely to flare up again, though, in the two weeks leading up to the second round of the French presidential elections on Sunday 24 of April and around Thursday’s ECB meeting.
    For now the trend in EUR/USD remains clearly bearish and we thus expect it to soon slip through the $1.0806 low with the February 2020 low at $1.0778 representing the next downside target. Further down sits the $1.0727 April 2020 low.
    Above last Thursday’s high at $109.38, minor resistance can be found at the late March low at $1.0945 and along the breached one-month downtrend line at $1.1038.
    Major resistance remains to be seen between the January low and March high at $1.1122 to $1.1185. While the cross stays below this area, the long-term downtrend remains intact.’

    Source: IT-Finance.com

    Chris Beauchamp | Chief Market Analyst, London
    13 April 2022
  6. ArvinIG
    The world’s wealthiest person made headlines last week after spending $2.9 billion buying up 9.2% of Twitter, sending the social media company’s share price skyrocketing.

    Source: Bloomberg   Shares Twitter Elon Musk U.S. Securities and Exchange Commission Freedom of speech Security   Elon Musk's Twitter (NYSE: TWTR) shares purchase has made him by far the largest shareholder and came with a seat on the board. And with a personal fortune of $282 billion, it cost the billionaire relative chicken feed.
    But Twitter is a social media company, which is very different to his other concerns. Moreover, Musk has bought into its success rather than, as he previously suggested and would be more his style, starting his own platform.
    Twitter share price: Elon Musk’s 5 potential motivators
    1) Free speech
    Musk is a vigorous advocate for free speech, guaranteed under the first amendment of the US Constitution. In March, he asked ‘Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?’
    Moreover, he followed with ‘The consequences of this poll will be important. Please vote carefully.’
    And Musk refused to block Russian news outlets through the Starlink satellite internet system that he provided to Ukraine, based on being a ‘free speech absolutist.’
    Some have mused he would readmit Former US President Trump to the platform, but Twitter insists it has ‘no plans to reverse any policy decisions.’
    2) Securities and Exchange Commission
    The battle between Musk and the SEC has been raging for years. When he tweeted ‘funding approved’ to take Tesla private in 2018, the regulator insisted that a securities lawyer would pre-approve any tweets containing ‘material information’ about the EV company. Musk is suing to nullify, arguing ‘something is broken with SEC oversight.’
    And having violated it several times already, he’s now being investigated for his November Twitter poll asking whether he should sell a 10% stake in Tesla. And he may even have broken securities law over his Twitter shares purchase.
    But interestingly, he’s also polled users on whether they would ‘like an edit button.’ With 73.6% in favour, it’s possible Musk is aiming for a compromise deal with the SEC that respects his constitutional right to publicise what he wants, with a lawyer approving tweets retrospectively.

    Source: Bloomberg 3) Promotional power
    Pre-covid-19 pandemic, Musk’s wealth sat at a meagre $26.6 billion. But it’s now risen tenfold, driven by the power of his personal brand. With 81.3 million Twitter followers, investors and consumers alike are constantly updated with snippets of progress at his various companies.
    This free marketing has allowed him to almost completely ignore traditional advertising for Tesla cars. And there’s no denying his ability to affect the markets, whether he’s tweeting about corporate progress or the latest canine-inspired alt-coin.
    With Tesla alone a trillion-dollar company, the $2.9 billion price tag for promotional power is cheap. It also buys security; like Trump, Musk’s incendiary tweets left him at risk of being de-platformed.
    This is because (currently) Twitter’s right as a private entity to de-platform supersedes an individual’s First Amendment right to freedom of speech.
    4) Sound investment
    Twitter’s share price was $72 in mid-July 2021, before falling to $32 by 7 March. When Musk bought the stock on 4 April it was worth $39, before shooting up to $51 the next day. He has made a significant paper gain already.
    And in 2021 full-year results, annual revenue grew by 37% to $5.08 billion, while average monetizable Daily Active Users grew by 13% to 217 million. Twitter also announced a $4 billion share repurchase, while aiming for $7.5 billion revenue in 2023.
    However, it made another net loss of $221 million. And in Q4, total ad engagement decreased by 12% and cost per engagement rose 39% year-over-year. These may be figures that brand Musk could actively improve.
    He may already be starting, commenting on the inactivity of the top 10 most followed Twitter accounts by asking ‘Is Twitter dying?’ Moreover, Musk wants ‘no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.’
    5) Personality quirk
    In May, Musk listed a string of achievements, before asking an audience ‘‘Did you also think I was going to be a chill, normal dude?’ Eccentricity and unpredictability are twin rooks on the chessboard. Maybe he was simply bored or enjoys the attention.
    Over the weekend, he polled users on whether the company should ‘Convert Twitter SF HQ to homeless shelter since no one shows up anyway,’ or ‘Delete the w in twitter?’ And perhaps to mock the SEC, he then posted a meme of character Saul Goodman, saying ‘in all fairness your honor, my client was in goblin mode.’
    But one thing seems certain. Musk will not rest on his laurels as a passive investor.
    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
    * Best trading platform as awarded at the ADVFN International Financial Awards 2021

    Charles Archer | Financial Writer, London
    11 April 2022
  7. ArvinIG
    Australian dollar under pressure amid extended Shanghai lockdown that threatens growth and the RBA’s financial stability review in focus as traders look to carry overnight momentum.

    Source: Bloomberg   Forex Shares Commodities AUD/USD Risk Investment   Friday’s Asia-Pacific outlook
    Asia-Pacific markets are looking at a mixed open after concerns over central bank tightening subsided overnight. US stocks pushed higher, with the benchmark S&P 500 index rising 0.42% in New York, ending a two-day losing streak. Bond traders ditched Treasuries, more so along the long end of the maturity spectrum, which steepened key yield curves. The US Dollar Index (DXY) pushed higher into multi-year highs despite the risk taking. That dollar strength is working against the Australian Dollar this morning.
    The lockdown in Shanghai, China, which is in its second week, is also dampening sentiment across the APAC region. The extended shutdown, with no sight in end, has weighed on metal prices as factories sit idle in the country’s largest city. That hurts the Australian dollar, given the amount of trade Australia does with China. That said, yesterday’s weaker-than-expected trade balance appears to be providing another headwind to AUD/USD prices.
    Oil prices fell again for the WTI and Brent benchmarks. The extended Shanghai lockdown is likely starting to eat into growth prospects. That, along with a larger-than-expected inventory build in the United States, may see weakness continue in the short term. Meanwhile, the European Union continues to spare over the exact details of banning Russian coal, but the latest reports suggest policymakers favor pushing such a ban back to mid-August.
    This morning, South Korea’s current account balance for February crossed the wires at $6.42 billion, up sharply from $1.81 billion. Japan will follow this morning with its own account balance for the same period. Analysts expect that figure to come across at 1.4 trillion yen. Traders will also be digging into the Reserve Bank of Australia’s financial stability review due out at 01:30 GMT. The weekend may have traders opting not to hold risky assets, given the rapidly changing situation in Ukraine.
    AUD/USD technical forecast
    AUD/USD prices are more than 2% lower from the multi-year high of 0.7661, set earlier this week. The 23.6% Fibonacci retracement appears to be underpinning prices. A drop below that level would threaten the rising 20-day Simple Moving Average (SMA). Alternatively, a rebound would bring the 23.6% Fib into view and the 2022 high above that.
    AUD/USD daily chart

    Source: TradingView Follow Thomas Westwater on Twitter @FxWestwater
    This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.

    Thomas Westwater | Analyst, DailyFX, New York City
    08 April 2022
  8. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 11th April 2022. These are projected dividends and likely to change. IG cannot be held responsible for any changes made.
    Dividends highlighted in red include a special dividend, therefore some or all of the amount will not be adjusted. Amount in brackets is the expected adjustment after special dividends excluded (where shown on major indices). Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day. 
    If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.
     

    NB: All dividend adjustments are forecasts and therefore speculative.
    A dividend adjustment is a cash neutral adjustment on your account.
     
    Index
    Bloomberg Code
    Effective Date
    Summary
    Dividend Amount
    N/A

    How do dividend adjustments work?  
    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.
  9. ArvinIG
    Tesla’s share price entered 2022 at $1,200, before falling to $744 by 14 March. Having recovered to $1,068 today, the trillion-dollar trailblazer releases Q1 results on 20 April.

    Source: Bloomberg   Shares Tesla, Inc. Twitter Price Supply chain COVID-19 pandemic   Tesla's (NASDAQ: TSLA) share price was boosted earlier this week by its Saturday press release. The world’s largest EV manufacturer confirmed it had delivered 310,048 vehicles, 68% more than the 184,800 it delivered in Q1 2021.
    CEO Elon Musk tweeted ‘this was an exceptionally difficult quarter due to supply chain interruptions and China zero Covid policy…outstanding work by Tesla team and key suppliers saved the day.’
    Tesla shares closed on Monday at $1,146 but have since fallen back as investors digested the news. Despite another quarterly record, it still delivered 7,000 fewer cars than previously forecast.
    In January, the CEO said he expected sales to grow by 50% in 2022, after generating a record £4.2 billion profit in 2021. And with Brent Crude remaining at a multi-year high, the steep up-front cost of EVs now compares more favourably to the rising prices of petrol and gas.
    Moreover, Tesla is planning another stock split later this year, which historically has seen its share price rise.
    So with deliveries confirmed, investors are likely to concentrate on some of the finer detail.
    Tesla share price: upcoming Q1 results
    1) Supply chain squeeze
    Global supply chains have felt the strain since the covid-19 pandemic began. However, Tesla is now facing further constraints on two fronts. The Russia-Ukraine war is seeing a squeeze on EV-critical metals including Palladium, Nickel, and Platinum, which are now trading at near-record highs.
    Tesla raised its US prices twice in one week last month in response. Musk has previously warned that ‘in 2022, supply chain will continue to be the fundamental limiter of output across all factories. So, the chip shortage, while better than last year, is still an issue.’
    Simultaneously, China’s ‘zero-covid’ policy has tens of millions of citizens in lockdown, including the entire population of Shanghai.
    The city is both the busiest port in the world and a global semiconductor hub. Tesla’s Shanghai ‘Giga factory’ has surpassed its flagship Fremont facility in production capacity, and finished 2021 with an annualized production rate of 800,000 cars. And it’s expected to eventually ramp up production to 1,000,000 cars a year. But with no end to lockdown in sight, and the plant closed for now, Q2 production figures could be in jeopardy.
    2) Berlin and Austin ‘Giga factories’
    After much delay, Tesla’s Berlin ‘Giga factory’ finally opened last month. Wedbush analyst Dan Ives argues a ‘major overhang’ has been removed from the EV maker, saying he ‘cannot stress the production importance of Giga Berlin to the overall success of Tesla’s footprint in Europe and globally.’ The factory will eventually ramp up production to 500,000 cars per year.
    Meanwhile, Musk is inviting 15,000 people to the opening of another ‘Giga factory’ in Austin, Texas, which he claims is ‘gearing up to be the biggest party on Earth.’ The factory will also ultimately produce 500,000 cars annually.
    However, Steve Box, founder of Environmental Stewardship, is concerned that the ‘managed depletion’ of water resources in the State could put a huge strain on both the local environment and Tesla’s logistics in the years to come.
    Further details on either of these new factories, particularly on their potential impact on production numbers for r2022 could have a strong effect on the Tesla share price trajectory.
    3) Regulatory issues
    No stranger to controversy, Musk has often found himself in hot water with the US Securities and Exchange Commission (SEC). Many of his battles with the SEC have revolved around his use of Twitter.
    After tweeting ‘funding approved’ to take Tesla private in 2018, he was forced to agree that some of his tweets would be pre-approved by a lawyer before being published. Musk is currently attempting to nullify this deal.
    But he’s also under investigation for his November Twitter poll asking whether he should sell 10% of his stake in Tesla. And now, Reuters reports he may have broken US securities law over his share purchase of 9.2% of Twitter.
    With a board seat, and as the largest shareholder, some investors are concerned that Twitter will distract him from running his EV company. While it’s unlikely that these regulatory issues will feature in official releases, Musk has previously veered off-topic on earnings calls.
    Any comments, good or bad, could be reflected in the Tesla share price.
    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
    * Best trading platform as awarded at the ADVFN International Financial Awards 2021

    Charles Archer | Financial Writer, London
    07 April 2022
  10. ArvinIG

    Global market update: four markets to watch

    By ArvinIG,


    Analyst article
    While volatility on Wall Street has dropped, there is still plenty of movement in the global markets.

    Source: Bloomberg   Shares Twitter Elon Musk S&P 500 Ukraine United States   Volatility settles, yet there’s still plenty of movement in the global markets
    The rise of global stocks through March has many perplexed in the market, with implied volatility on Wall Street back to levels consistent with a bullish market. There remains plenty of movement in the global financial markets, however, as issues such as inflation, the war in Ukraine and China’s COVID-19 lockdowns keep traders guessing.
    Throw in some typical antics from Elon Musk, and here are four markets to watch.
    Top four markets to watch
    1. WTI Crude

    Source: TradingView The Russians have shifted their strategic focus from Kyiv and toppling the Ukrainian government to consolidate its stronghold of disputed Eastern regions. The lower risk of regime change, not to mention a lower risk of crippling sanctions on Russia and Russian debt default, has seen oil prices pull back from recent highs.
    Moreover, alleged war crimes in Bucha have put an obstacle in front of peace talks but there remains the hope of progress in negotiations going forward. WTI Crude is consolidating now as traders assess the situation. Momentum has neutralized, while prices range between the 20- and 50-day moving average (MA).
    It must be said a consolidation pattern is taking form, suggesting that perhaps the risk here is skewed towards a break-out.
    2. Twitter

    Source: TradingView Twitter shares surged this week after it was reported that Tesla CEO – and long-time Twitter user and often critic – Elon Musk had taken a 9.2% share in the company. The stock was up as much as 30% on an intraday basis, with the mercurial Mr Musk hinting at bringing about changes to the platform, as the company’s CEO invited Musk to join the board.

    The news broke Twitter’s downtrend, sending the stock flying into technically overbought levels and towards its 200-day MA. Price met resistance at $54 per share, as lucky investors took profits on the trade. Support looks around $49 per share currently, as the RSI signals a possible further pullback.
    3. S&P 500

    Source: TradingView The rebound in global equities has had many pundits scratching their heads lately. There are possible signs that this move could be a bear market rally, as upside momentum stalls for the S&P 500. The weekly RSI remains in a downtrend and below the key 50 level. More pertinently, the weekly candle last week is sending a potentially ominous signal of a short-term top and possible price reversal.
    A gravestone doji can be seen for the index, suggesting potential for further downside risk on Wall Street in the short term. A drop below the 20-week MA could open a pullback to the 50-week MA. A hold above 4545 support/resistance may indicate support and consolidation for the market.
    4. US Dollar Index

    Source: TradingView The path and pace of US interest rates is priority number one again for market participants. With hawkish comments coming from perennial uber-dove Lael Brainard this week has put rate hikes back at the centre of the equation and re-introduced the discussion about when the US Fed will begin the process of balance sheet 'normalisation.’
    Heading into the latest FOMC minutes, traders will be gauging the odds of two successive 50-point hikes from the central bank in May and June, and whether 'QT' will begin in May. The US Dollar Index has been consolidating lately, trading in a range between 99.50 and 87.70. The DXY is approaching the top end of that range now, a break of which could open a fresh rally in the dollar.
    Follow Kyle Rodda on Twitter @KyleR_IG
    Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.

    Kyle Rodda | Market Analyst, Australia
    06 April 2022
  11. ArvinIG
    As markets approach the next earnings season, we look at the key elements to watch out for.

    Source: Bloomberg   Indices Shares S&P 500 S&P Global Ratings Investor Stock market   When does earnings season begin?
    The impending reporting season for US stocks begins on 14 April with JPMorgan, and lasts throughout April and May.
    What to expect from earnings season
    For this period of reporting, the overall S&P500 is expected to see earnings growth of 4.7%, according to data from FactSet. This would be the lowest rate of growth since quarter one (Q1) 2020.
    Earnings growth to slow
    This season is expected to see a slower rate of earnings growth, but one that is at least still positive. This reflects the maturing state of the economy and the market, which is now moving on from the immediate recovery phase from the Covid-19 pandemic. It is important to note that earnings are still expected to grow, with no sign of any reversal in earnings growth as yet.
    But with prices on the rise some margin compression is likely. Higher input costs will be felt throughout a host of sectors, prompting profit margins to narrow. This should then be reflected in the earnings outlook for the next quarter. A gloomier outlook will risk putting more pressure on equity markets, as investors fret that the trend of weakening growth will continue.
    What about the Ukraine war?
    There was some reference to the war in Ukraine in the quarter four (Q4) results season. We can expect it to feature more heavily this time around although it is still perhaps too soon for most companies to have a firm idea of how much the situation will have affected earnings.
    Oil companies however will be interesting to watch, since they have been the obvious beneficiaries of the rise in oil prices, while on the other hand, they have been hit by the need to divest themselves of operations in Russia. The overall impact for now on earnings may be a reference to ‘greater uncertainty’ and the prospect of further details in the next reporting season.
    S&P 500 strong after recent recovery
    The S&P 500 has managed an impressive rebound from its March lows. From 4130, the index has climbed back above 4500, even briefly moving above 4600 in late March. Earnings season may well be a crucial moment for the index, as investors look for reasons why the index should continue its move higher.
    Additional gains in the short-term head towards 4630, and from there the 4740 and 4800 levels loom large as upside targets. A more bearish case will develop if the price is unable to hold above 4500 and the 200-day simple moving average (SMA) at 4494.
     

    Source: ProRealTime

    Chris Beauchamp | Chief Market Analyst, London
    05 April 2022
  12. ArvinIG
    The RBA left the official cash rate at 0.10% as expected; the statement removed the word 'patient' as evidence builds and a lift-off for rates in May could be brewing.

    Source: Bloomberg   Forex Inflation Australia Central bank Inflation targeting Federal Reserve   The Australian dollar rallied after the RBA left rates unchanged at 0.10% at their monetary policy meeting today. It was the hawkish tone that lifted the currency. In particular, the reference to being ‘patient’ in regards tightening was dropped.
    No mention was made of disposing of assets accumulated during the pandemic and the market anticipates that the central bank will let these debt instruments mature in time.
    An important phrase included in the statement said, ‘Over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labour costs.’
    Successive Australian governments have failed to provide funding to the Australian Bureau of Statistics (ABS) to enable them to provide monthly CPI.
    Instead, Australia and New Zealand are the only two countries in the G-20 that release quarterly CPI. This is despite the Australian government mandating an inflation targeting regime to the RBA.
    Today’s decision aside, the asymmetric bias within the monetary policy framework is alive and well. The bias stems from the belief that it is easier to deal with high inflation than it is to re-stoke economic growth if the flames of expansion are extinguished.
    Hence, monetary policy is kept looser for longer than would otherwise be the case if there was a symmetric approach between growth and inflation.
    While there might be some merit in this thinking, the logic only holds to a point. The breaking point is when inflation expectations become embedded.
    The US Federal Reserve is further down this problematic path than the RBA, but the clock is ticking louder for Australian rates.
    Many Australian employees have recently had their salaries increase by 3.5% as their awards are tied to headline CPI, not any other measure. Last week, the federal budget delivered household balance sheets a little kick along, although mostly temporary.
    With unemployment at 4% and CPI data arriving April 27th, there are strong indications that overheating price pressures may trigger the RBA to hike in May.
    Next week will see the Westpac consumer confidence gauge and jobs data released

    Source: TradingView Follow Daniel McCarthy on Twitter at @DanMcCarthyFX
    This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products.

    The material on this page does not contain a record of IG’s 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.

    Daniel McCarthy | Strategist
    05 April 2022
  13. ArvinIG
    The Australian share market rose for a third straight week to a two-month high last week. RBA’s meeting on Tuesday will be the key event to focus on this week and today we look at three stocks: Nab, Telstra and Rio Tinto.

    Source: Bloomberg   The Australian share market rose for a third straight week to conclude the first quarter of 2022 at a two-month high. Despite the mild fall on Thursday, ASX 200 moved up 6% during the trading session in March and nearly regained all the losses from early this year.
    A strong boost from the mining sector and big banks helped the ASX to rebound strongly since mid-March while partially offsetting the concern of upcoming interest rate rises and the geopolitical tension in Ukraine.
    Three ASX stocks to watch this week
    1. National Australia Bank (NAB)
     

    Source: IG NAB shares hit a five-year high last Thursday at $32.59. The recently revealed federal budget was viewed as a positive catalyst for banks and as such, share prices for big banks surged last week. In addition to that, NAB recently announced a $2.5 billion buyback: the top Australian bank plans to buy back its shares after the publication of its half-year results, scheduled on 5 May.
    The share price of NAB has pulled back from its peak from last Friday, with the current support at $32. Next support can be found from the 20-days moving average. Overall, the mid-term momentum for the bank stays bull-biased, although the over-bought RSI does suggest a near-term retracement is on the cards.
    Telstra Corporation (TLS)

    Source: IG Telstra share prices experienced a turbulent week last week as the company made two significant announcements back-to-back. On Wednesday, the retirement of its chief executive officer (CEO) Andrew Penn shocked the market while on Thursday, the telecommunications giant won back the previous loss as the company confirmed to secure a new $187 million contract with the Queensland government.
    The share price for Telstra has moved sideways from last week’s trend line on Monday morning. Currently supported by the 20-day moving average, which if broken through, will send the price back to its two-week-low. Imminent resistance will be in line with the 50-day moving average and the previous trendline, at around $3.95.
    Rio Tinto Limited (RIO)

    Source: IG Rio Tinto Limited (RIO) share price edged 14.68% higher for the past two weeks as the company’s largest commodity iron ore, rose 11% in March. Since the beginning of 2022, the Rio Tinto share price has gained 20%, powered by soaring commodity prices and strong global demand.
    From a technical viewpoint, it looks like the share price has bottomed out from the March low, following the ascending trend line ever since. The next target will be looking at the gap between $123.1 and $125.3, which, if filled, will open the door to the eight-month-high near $128. Current support can be found from the trend line at $120.
    Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
    Follow Hebe Chen on Twitter @BifeiChen
    Hebe Chen | Market Analyst, Australia
    04 April 2022
  14. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 4th April 2022. These are projected dividends and likely to change. IG cannot be held responsible for any changes made.
    Dividends highlighted in red include a special dividend, therefore some or all of the amount will not be adjusted. Amount in brackets is the expected adjustment after special dividends excluded (where shown on major indices). Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day. 
    If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.
     

    NB: All dividend adjustments are forecasts and therefore speculative.
    A dividend adjustment is a cash neutral adjustment on your account.
     
    Index
    Bloomberg Code
    Effective Date
    Summary
    Dividend Amount
    OMX
    VOLVB SS
    7/04/2022
    Special Div
    6.5

    How do dividend adjustments work?  
    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. ArvinIG
    US jobs growth in March is expected to remain solid, although below the level of February, which will encourage the Fed to stick with its plans to tighten monetary policy.

    Source: Bloomberg   Forex Federal Reserve Inflation United States Interest rate Interest   US jobs growth to slow
    This month we are expecting to see non-farm payrolls (NFP) rise by 485,000, a strong number, but down on last month’s 678,000. The unemployment rate is expected to fall to 3.7% from 38%, while average hourly earnings are forecast to grow by 0.4%, compared to last month’s flat figure.
    Economic growth in question as inflation rises
    The current pace of job growth, and indeed of job increases, may well come under pressure as the Federal Reserve (Fed) continues to push forward with interest rate increases.
    Indeed, the Federal Open Market Committee (FOMC) may well accelerate the pace of its tightening as the year goes on, with a 50 basis points (bp) increase in rates now a distinct possibility at the meeting in May.
    It would take a very sharp downturn in jobs growth for the Fed to reconsider their views, and even then they may have no option but to push forward, given the strong readings in inflation data that currently prevail. For the moment, strong NFP readings such as those we have seen in recent months and are expected for March are likely to reconfirm the Fed in their view that the economy can maintain interest rate increases.
    US dollar index outlook
    The steady gains in the dollar index over the past year have stalled this month, with the price holding below 99.50. Dips towards 97.60 have found buyers in the short term, which leaves the uptrend broadly intact.
    A move below 97 would put the price below the January and February highs, and signal that the retracement has further to run, potentially bringing the 95.85 area into view.

    Source: ProRealTime
    Chris Beauchamp | Chief Market Analyst, London
    31 March 2022
  16. ArvinIG
    Deliveroo’s share price rose to 125p as it announced a new partnership with WHSmith and was boosted by Exane BNP Paribas.

    Source: Bloomberg   Shares Deliveroo WHSmith IPO United Kingdom Investor   After yesterday's impressive performance, Deliveroo's (LON: ROO) share price has fallen by 4% to 120p today, as investors weigh its latest expansionary effort against a business model which has yet to deliver a profit.
    Deliveroo share price: WHSmith partnership
    Deliveroo’s new partnership with WHSmith marks a further expansion into different retail sectors. Deliveroo will offer more than 600 WHSmith products on its platform, such as books, stationery, and toys, for delivery in as little as 20 minutes.
    WHSmith director of high street, Sean Toal, said ‘we’re always exploring new ways to delight our customers both in store and online by providing them with an exceptional shopping experience.’
    The partnership has already started in Reading and will expand into nine additional areas from next week. Chief business officer for Deliveroo UK and Ireland, Carlo Mocci emphasised the expanded customer choice, saying it will ‘create more work for our riders across the UK.’
    Originally delivering from just restaurants, Deliveroo began listing the major supermarkets including Tesco, Waitrose, Sainsbury's, Morrisons and the Co-op on its app during the covid-19 pandemic, as it became the fifth emergency service for isolating individuals.
    However, this new partnership could be a double-edged sword. On the one hand, the new offering will appeal to a different, potentially older clientele. But on the other, some investors may prefer Deliveroo to consolidate its position rather than continue to grow during tightening monetary conditions.
    But in further good news, Exane BNP Paribas has become ‘more constructive’ on the food delivery sector, as ‘huge piles of dry powder’ cash reserves could see conventionally inclined investors drawn to its value offerings, despite the ‘thinning out’ of speculative private funding.
    Its belief that a recovery could be driven by a permanent change in consumer behaviour also saw Just Eat and Delivery Hero soar yesterday, but Deliveroo was its ‘preferred name,’ due to its profit control.
    However, Exane warned Q1 ‘probably won’t look pretty’ for the operators based on strong comparables and falling disposable income. However, it accepts ‘a positive message on profit could trump modest top-line downgrades.’

    Source: Bloomberg Where next for Deliveroo?
    At its Initial Public Offering launch a year ago, Deliveroo ended the day 26% below launch price. One of Deliveroo’s bankers called it the ‘worst IPO in London’s history.’
    However, Deliveroo shares rocketed to 395p by mid-August before collapsing to 107p earlier this month. Key to this collapse was CEO and founder Will Shu’s insistence on a dual-class share structure, that allows him to continue the company’s growth strategy without risking takeover bids. This lack of control made the company unattractive to institutional investors, who often try to influence corporate strategy.
    Moreover, after 800 P&O Ferries staff were sacked to be replaced with sub-minimum wage workers, the status of Deliveroo’s self-employed contractor riders is once again in the public mind. This is another long-term problem that will continue to drag on the stock.
    In full-year results, it saw a ‘strong year of growth with 2021 gross transaction value up 70% year-on-year,’ and further UK market share gains with ‘UK population coverage expanded to 77% at end-2021 vs 53% at end-2020.’
    Further, the company saw revenue up 57% to £1.824 billion year-over-year, and gross profit up 43% to £497 million year-over-year. But the company made a loss before tax of £298 million in 2021, £85 million more than in 2020.
    However, after raising money from the IPO and Series H fundraising in January, it ended the year with £1.3 billion in cash. The company is not in financial danger yet.
    But Shu is aware that his ‘golden share’ is on a ticking clock, expiring after three years of public trading. He’s reassured investors of his plans for a ‘longer-term path to profitability,’ with profit a ‘key focus for the food delivery group this year and beyond.’
    Accordingly, he’s targeting breaking even by mid-2024. Not coincidentally, this is also when the founder’s golden share powers conclude.
    But with interest rates rising amid an escalating cost-of-living crisis, Shu must be careful that his losses don’t add up too fast.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    31 March 2022
  17. ArvinIG
    With the UK bank rate at 0.75%, the US Federal Reserve could hike its own interest rates to match in May.

    Source: Bloomberg   Forex Inflation Jerome Powell United States Interest rate Federal Reserve   Currently, 71% of IG clients are long on GBP/USD, with sentiment that the UK’s Bank of England will increase interest rates faster than the US Federal Reserve.
    But the US Federal Reserve could spring a surprise on unsuspecting investors.
    GBP/USD: US dollar
    Across the Atlantic, Reserve Chair Jerome Powell is facing the same problems as Bank of England Governor Andrew Bailey; racing inflation creating an inescapable cost-of-living crisis, compounded by the fallout of the covid-19 pandemic and Russia-Ukraine war.
    However, there are notable differences. First, the US is far less dependent on energy imports than the UK. And second, the US Consumer Prices Index inflation rate is at a 40-year-high of 7.9%, significantly higher than the UK’s 6.2%. Both give Powell greater freedom to raise rates faster.
    A fortnight ago, the Reserve lifted its benchmark rate by 0.25 percentage points for the first time since 2018 and signalled plans for a further six rate rises over the course of 2022.
    At the time, Powell stated that ‘the plan is to restore price stability while also maintaining a strong labour market.’ He maintains he is ‘not going to let high inflation become entrenched…the costs of that would be too high.’
    Grant Thornton Chief Economist Diane Swonk believes Powell faces a ‘high-wire act,’ as he must ‘dampen down the pressures of inflation without derailing the global economy.’ The governor is caught between a rock and a hard place, where he either lets inflation erode living standards, or temper it with interest rate rises that could hit growth.
    Powell accepts that employment figures have ‘continued to strengthen’ but argues rising inflation amid Russia’s invasion of Ukraine is ‘likely to create additional upward pressure on inflation and weigh on economic activity.’

    Source: Bloomberg How fast could the Federal Reserve act?
    Powell has a dual mandate; to maximise employment figures, while keeping inflation at around 2%. The job market is red-hot, with the unemployment rate at a mere 3.8%. The ‘great resignation’ continues to create job vacancies, while the wider economy has improved massively due to trillions of dollars of government stimulus. The benchmark S&P 500 index is up 37% to 4,632 points compared to its pre-pandemic value.
    Accordingly, the Reserve has significant leeway to hike rates. And with China imposing new lockdowns on tens of millions, including in Shanghai, the supply chain crisis is likely to worsen further.
    Meanwhile, Russia and Ukraine together are globally significant producers of multiple commodities including Wheat, Gold, oil, gas and uranium. With this supply cut off, inflation seems set to soar even further in 2022. But Powell has advised that if it becomes ‘appropriate to raise interest rates more quickly, then we’ll do so.’
    The Reserve projects that the interest rate will rise to almost 2% by the end of the year, one percentage point higher than it predicted in December 2021.
    Powell believes ‘the probability of a recession in the next year or so is not particularly elevated.’ But with the Bank expecting the US economy to grow by 2.8%, and inflation to fall to 4.3% by the end of the year, it may still not be moving fast enough.
    Federal Open Market Committee member James Bullard thinks ‘we have to think bigger, maybe, than we thought about in the past.’ Bullard wanted to raise rates by half a per cent in the last meeting and believes they should be at 3% by the end of the year. Fellow member Loretta Mester wants to ‘front-load’ rises and hopes for rates at 2.5% before 2023 hits.
    Even Mary Daly, who is considered to be amongst the most dovish on the committee accepts that ‘everything on the table right now. If we need to do 50 (basis points), 50 is what we'll do… with the labor market so strong, inflation, inflation, inflation is top of everyone's mind.’
    At a National Association for Business Economics conference, Powell warned he will move ‘expeditiously’ in the May meeting, and hinted he could start trimming the Reserve’s $9 trillion balance sheet.
    And with inflation the watchword for hawkish movements, sharper rate rises cannot be ruled out.
    Trade 100+ FX pairs with the UK’s No. 1 retail forex provider.* Enjoy fast execution, low spreads – plus we’ll never fill your order at a worse price. Learn more about our forex trading platform or create an account to start trading today.
    Charles Archer | Financial Writer, London
    30 March 2022
  18. ArvinIG

    Markets to watch: AUD/JPY, Tesla and WTI

    By ArvinIG,


    Analyst article
    Investors are piling back into risk despite ongoing risks and signals of a possible US growth slowdown.

    Source: Bloomberg   Shares Stock Tesla, Inc. Market sentiment Bond AUD/JPY   Risk appetite remains strong despite bond market warnings
    Global equities move higher, even as the bond market warns that the US economy is heading for a precipitous slowdown. A turnaround in market sentiment has seen momentum in indices reverse, with a recovery in tech stocks underpinning the rebound on Wall Street. Despite this, the US yield curve is fast approaching inversion, suggesting that amidst inflation, monetary policy tightening, the war in Ukraine, and China’s latest lockdowns, economic growth may be heading for a major slowdown.
    Here we look at four key markets to watch, as investors pile back into risk in the face of persistent economic and financial risks.
    Top three markets to watch
    1. WTI Crude

    Source: TradingView The progress of peace talks (however glacial) and lockdowns in China has given rise to both supply and demand headwinds for crude. Price momentum is slipping to the downside on the dailies, with the price falling below the 20-day MA and the daily RSI turning lower and threatening a push below the 50-level. A confluence of support is emerging around the $US100 mark right now, which includes trendline support. A break below that level could open a rest of $US93.40/50. Resistance might be found around $US116-117.
    2. Tesla

    Source: TradingView Tesla revealed in a regulatory filing – and backed this up via Tweet – that the company is looking at a stock split thus sending its stock price surging. While there’s no rational basis for such a move – the split creates no additional value – the perception that a lower price for the stock will attract greater buyers sparked the rally. Tesla shares broke resistance at roughly $US900 and $US1000 last night, with momentum soaring as the daily RSI hit technically overbought levels. The next level of resistance looks to be just above $US1100 now and support might be found at the previous resistance at $US1000.
    AUD/JPY

    Source: TradingView The trend for the AUD/JPY ultimately looks bullish. Commodity prices are flying, while yield spreads between AGBs and JGBs are widening, as interest traders price in 6 rate hikes from the RBA in 2022. The hike is ultimately fuelled by expectations of pre-election cash hand-outs from the government in this year’s budget.

    Despite this, from a technical standpoint, the AUD/JPY looks ready for a pullback with the daily RSI historically overbought and turning lower. Key support levels might include the 20-day and previous resistance at ~86.00.
      Follow Kyle Rodda on Twitter @KyleR_IG
    Kyle Rodda | Market Analyst, Australia
    29 March 2022
  19. ArvinIG
    Upstart is falling as CEO Dave Girouard sells off 133,000 shares. But long-term growth prospects appear promising, despite the tightening monetary environment.

    Source: Bloomberg   Loan Credit score in the United States Artificial intelligence Bank Financial technology Credit   Upstart's (NASDAQ: UPST) share price has had a rollercoaster journey since its December 2020 Initial Public Offering. Initially launched at $20, it peaked at $390 by 15 October 2021, before falling 73% to $104 today.
    Rising inflation and interest rates, the Omicron variant, and the cost-of-living squeeze could all be weighing on the Artificial Intelligence (AI) FinTech stock.
    Upstart share price: novel credit
    The US equivalent of the UK consumer credit score is a FICO score, which is generated based on information gleaned from the three largest credit reference agencies — Experian, Equifax, and TransUnion. 95% of US financial institutions use this score to determine creditworthiness.
    And like the UK, FICO uses traditional criteria such as income, current credit utilisation, and any defaults on file. However, Upstart believes FICO scores are based on limited information that does not accurately quantify applicant risk.
    Its AI algorithm uses variables such as employment history, bank transactions, and education in addition to the traditional criteria to make more nuanced judgement calls. It then matches approved borrowers with its banking partners, which in most cases give instant approval based on Upstart’s results.
    Upstart claims its platform reduces risk for lending institutions, while simultaneously increasing consumer credit access. The start-up argues its lender partners lose less money to high-risk customers with unreliably high FICO scores, and also makes more by lending to trustworthy individuals who are more thoroughly assessed through its platform.
    Internal company data shows US banks are missing out on potential profits from up to a third of the population as a result of overreliance on the FICO model. And with Upstart’s AI updated in real-time with repayment data, it’s becoming increasingly skilful at assessing creditworthiness.

    Source: Bloomberg Upstart shares: the future is here
    2021 full-year revenue rose by a gigantic 264% year-over-year to $849 million, of which $801 million was fee revenue. That’s a 15-fold increase since 2017. CEO Dave Girouard enthuses that it ‘generated more cash in 2021 than we burned in our entire eight-plus-years as a private company.’
    And Upstart’s bank partners originated 1.3 million loans worth $11.8 billion in 2021, an increase of 338%. Moreover, conversion on rate requests hit 24%, up from 15% in 2020.
    The FinTech’s foray into the auto loan market is also going well, as ‘Auto Retail adoption among car dealers grew nearly 4X1 in 2021 thanks to its unique combination of in-store customization for dealers and online access for customers.’
    Dealership partners rose from 111 at the end of 2020 to 410 in 2021. It’s also a launched mobile-first auto platform, and now expects auto transaction volume of $1.5 billion in 2022.
    For perspective, Upstart’s current revenue is mostly derived from personal loans, a sector with a total addressable market (TAM) of $96 billion in 2021. The Auto loans TAM is $727 billion. And Girouard encourages that ‘Auto Refi funnel performance is now comparable to where our personal loan funnel was in 2019.’
    There are headwinds of course. CFO Sanjay Datta announced a $400 million share buyback program last month, arguing that recent volatility is throwing up ‘attractive buying conditions.’ And Girouard sold 137,498 company shares in January. Both could be indicators that the Upstart share price recovery will take time.
    In addition, 17 US states have passed new bills in 2017 aimed at regulating AI. And the US National Institute of Standards and Technology is currently researching federal standards for the nascent sector. Upstart’s algorithm requires access to a level of personal detail that many may feel disregards the fundamental right to privacy.
    But Girouard argues ‘Upstart is now about the size that Google was at the time I joined that company in early 2004. So I’ve seen this movie before—and hope to use what I learned there to build Upstart into the most impactful FinTech in the world.’
    He predicts revenue will rise to $1.4 billion this year. By contrast, rival FICO achieved $1.32 billion in revenue in 2021 and predicts an increase to $1.35 billion in 2022.
    Girouard believes ‘AI lending will rapidly gain market share over legacy approaches to credit, and Upstart is in the pole position to benefit.’ Of course, Upstart shares are expensive by traditional standards, trading at a price-to-earnings ratio of 73.
    But its prospects remain enticing.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).

    Charles Archer | Financial Writer, London
    29 March 2022
  20. ArvinIG

    4D Pharma shares receive trial data boost

    By ArvinIG,


    Analyst article
    4D Pharma shares have jumped following positive clinical trial results. Where next for the biotech?

    Source: Bloomberg   Pharmaceutical industry Clinical trial Cancer Drug Biotechnology Renal cell carcinoma   Shares in 4D Pharma received a welcome boost this week after the company posted positive results from a clinical trial of its early-stage cancer drug. In Phase I/II trials the product hit its end point early in treating patients with kidney cancer. The drug was administered in combination with Merck’s drug Keytruda. 4D Pharma has a research partnership in place with the drug giant.

    Shares in the biotech jumped 29% to 58p following the encouraging test results, although they have since fallen back to 48p.

    "Today's results in renal cell carcinoma, meeting the predefined primary efficacy endpoint early in this difficult to treat population, marks another important step forward for MRx0518 and the increasing importance of the microbiome in cancer treatment," said the company’s chief scientific officer, Dr Alex Stevenson.
    Chief executive Duncan Peyton told IGTV that the data was "really meaningful... in proving [4D Pharma's] thesis."

    4D Pharma’s ‘drugs from bugs’

    The biotech company is developing a stable of drugs to treat cancer, Parkinson’s disease, irritable bowel syndrome and asthma. Its pipeline of five products is based on bacteria found in the human gut - what it terms ‘live biotherapeutics’ from the human microbiome.
    4D Pharma is dual-listed on AIM and Nasdaq and has a market capitalisation of just £91m. Two of its Parkinson’s disease products also recently received the go ahead from the US regulator to enter clinical trials.

    Trading at just 48p, the shares have lost two-thirds of their value since reaching a high of 156p in September 2020 - 56% in the past year.
    4D Pharma burning through cash
    Developing drugs is an expensive business. The biotech burned through £56m last year and only has £20m in funding left, making it likely that a cash call will be required later this year. Certainly, management said at its recent half-year results that it has enough funds to take it through to the fourth-quarter of 2022.

    4D Pharma also has a $30m cash facility lined up with Oxford Finance. The company recently signalled it may list up to $150m of shares on Nasdaq as American depository shares, following a filing with the US Security and Exchange Commission.

    Investing in biotech companies is high risk and Phase III clinical trials can prove costly. It can take more than a $1bn to bring a new drug to market. Failure rates are high and it is common for even late-stage products to fail in the clinic. The bulk of 4D Pharma’s drugs are still relatively early-stage, with two at the Phase II stage.

    The company’s technology is promising but it will need to raise further cash this year. However, securing a licensing deal or other positive trial-related news flow could provide a further boost for the shares. Its partnership with Merck is also a plus point.

    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
    * Best trading platform as awarded at the ADVFN International Financial Awards 2021
    Piper Terrett | Financial writer, London
    29 March 2022
  21. ArvinIG
    Here we look at three stocks for the last week of March: BHP, JB Hi-Fi and Macquarie. The outlook for inflation and the 2022 Federal Budget will be the key drivers for market’s sentiment this week.

    Source: Bloomberg   Indices Shares BHP Macquarie Group ASX Inflation   The ASX continued its upward journey last week with a mild gain of 1.2% and closed at its highest level in more than two months. The rise was primarily boosted by the finance and technology sectors as investors were told to prepare for more aggressive US interest rate rises.
    Moving into the last week of March, the inflation outlook will remain the key driver of market sentiment as the yield on the Australian three-year bond has just risen to its highest level since 2014 on Monday morning. In addition, the 2022 Federal Budget will be released on Tuesday, which is expected to include practical measures from the Australian government to fight the prevailing inflation pressure.
    Here we look at three stocks to watch in the week ahead.
    Top three ASX stocks to watch
    1. BHP Group Ltd (BHP)
    Surging iron ore prices over the past two years have seen the mining sector’s profitability explode and benefit the share price for BHP. The world’s mining giant will pay out its interim dividend on Monday at AUD $2.1 (USD $1.50) per share, making its dividend yield reach a mouth-watering rate at 9.64%, fully franked.
    BHP’s share price has been following the ascending trend line and has been up 12% in the past two weeks. For the near term, the next target will be looking at $51.66, which, if conquered, will send the price to challenge its all-time-high level recorded since last August. At the moment technical support sits at $48.776.

    Source: IG 2. JB Hi-Fi Limited (JBH)
    JB Hi-Fi Limited's share price was rising by 4% last Friday to reach an all-time high. The tech retailer has seen its store and online sales boom over the past two years and the momentum continues post-pandemic. During the period of 1 January 2022 to 23 March 2022, all three of its divisions experienced sales growth meaning total sales in Australia were up 11.3%.
    The share price for JB Hi-Fi was pulled back on Monday to its support line at $52.88 with hourly RSI moving out from the overbought zone. Overall, the upward momentum should stay valid for the near-term as the price sits distant from all its moving averages which are currently pointing north.
     

    Source: IG 3. Macquarie Group (MGQ)
    The share price for Macquarie Group Ltd has experienced an uplifting journey recently with the price moving 15% higher from early March. The Aussie investment bank, presenting the broad financial sector, is often viewed as one of the best performers during the inflationary period. As a result, they are now among the leading gainer of 2022 behind ASX resources shares.
    Moving into the new week, Macquarie’s share price is facing great pressure from the level of $200 and a breakthrough of this level would cement the view of a bottoming out from March’s low. Technical support can be found from the 100-days moving average, near $196.

    Source: IG Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
    Hebe Chen | Market Analyst, Australia
    28 March 2022
  22. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 28th March 2022. These are projected dividends and likely to change. IG cannot be held responsible for any changes made.
    Dividends highlighted in red include a special dividend, therefore some or all of the amount will not be adjusted. Amount in brackets is the expected adjustment after special dividends excluded (where shown on major indices). Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day. 
    If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.
     

    NB: All dividend adjustments are forecasts and therefore speculative.
    A dividend adjustment is a cash neutral adjustment on your account.
     
    Index
    Bloomberg Code
    Effective Date
    Summary
    Dividend Amount
    OMX
    SKAB SS
    30/03/2022
    Special Div
    3
    OMX
    SWEDA SS
    31/03/2022
    Special Div
    2
    OMX
    SCAB SS
    1/04/2022
    Special Div
    1
    SPX
    COP US
    30/03/2022
    Special Div
    0.3

    How do dividend adjustments work?  
    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. ArvinIG
    EUR/USD continues to slide, GBP/USD topped out and EUR/GBP bounces off support amid rising oil prices which stoke inflationary fears.

      Forex Commodities Euro United States dollar Pound sterling GBP/USD   EUR/USD remains under pressure amid rising oil prices and inflationary fears
    EUR/USD continues to trade below its two-month downtrend line at $1.1065 as surging oil prices provoke renewed fears of rising inflation and larger than previously expected rate hikes in the US.
    The mid-March $1.0901 low thus remains in focus, a fall through which would lead to the $1.0806 early-March low being back on the cards. While the cross remains below last week’s high at $1.1137, this year’s downtrend remains intact.

    Source: IT-Finance.com EUR/GBP bounces off support ahead of Friday’s UK March Gfk consumer confidence
    EUR/GBP drop through the 55-day simple moving average (SMA) and March 11 low at £0.8361 has taken it to the £0.8305 to £0.8286 support zone which held ahead of tomorrow’s UK March Gfk consumer confidence which is expected to come in at -30 compared to -26 a month ago.
    While the January and February lows at £0.8305 to £0.8286 underpin, a bounce back towards the 55-day SMA at £0.836 is likely to ensue. Further, minor resistance lies at the 17 March low at £0.8368 and also at the £0.8408 25 February high.

    Source: IT-Finance.com Recent advance in GBP/USD is taking a breather
    GBP/USD’s recovery rally from its 1 ¼ year low at $1.3001 ran out of steam at yesterday’s $1.3298 high as the war in Ukraine enters its second month.
    The 22 March low at $1.3121 is back in the picture, since a drop through the December low at $1.3162 has occurred. Slightly further down, potential support can be seen at the 8 March low at $1.3083.
    Only a fall through the mid-March low at $1.3001 would put the $1.2855 to $1.2813 June 2020 high and November 2020 low on the map. Resistance above the 17 March high at $1.3211 comes in at yesterday’s $1.3298 high.

    Source: IT-Finance.com   IG Analyst
    24 March 2022
  24. ArvinIG
    AUD rises vs USD after oil prices surge on pipeline problems; March PMI data shows Australia’s economic recovery is strengthening and AUD/USD eyes potential Golden Cross in the works after bullish action.

    Source: Bloomberg   Forex Commodities United States dollar Australian dollar AUD/USD Petroleum   Thursday’s Asia-Pacific outlook
    Asia-Pacific markets may fall today after market sentiment soured overnight on Wall Street. The Dow Jones Industrial Average (DJIA) fell 1.29% in New York. A sharp increase in WTI crude and Brent crude oil prices sparked concerns over economic growth as the conflict in Ukraine intensifies. The US dollar DXY index gained, mostly on euro weakness. However, the commodity-linked Australian dollar managed to climb higher.
    The rise in oil prices is attributable to a Russian oil pipeline to the Black Sea. Russia says that repairs on the damaged pipeline may take 1 million barrels per day off the market. Chevron, a US oil company that owns a stake in the pipeline, cited difficulties in sourcing materials to make the necessary repairs due to the market situation. Russia says that it may take months to complete those repairs. Oil-linked currencies like the Brazilian real and the Canadian dollar benefitted from the underlying move.
    It wasn’t just oil that rallied overnight, however. Copper, aluminum and nickel gained despite the stronger US dollar. That helped push inflation expectations higher, with the two-year US breakeven rate rising to nearly 5%. That helped push gold and silver prices higher. USD/JPY also managed to record another daily gain. The Yen is at its weakest point versus the US dollar since February 2016, and many analysts believe the Japanese currency may fall further as the Bank of Japan stays dovish versus an increasingly hawkish Federal Reserve.
    Along with rising commodity prices, the Australian dollar may benefit from this morning’s economic data. The March purchasing managers’ index (PMI) rose to 57.3 from 57.0, and the services component rose to 57.9 from 57.4, according to Markit Economics. The Australian economy appears to be off to a strong recovery as the country progresses away from Covid lockdowns that were in effect for the majority of 2021. The rest of today’s APAC session is rather light, with PMI data out of Japan due out at 00:30 GMT.
    AUD/USD technical forecast
    AUD/USD looks set to challenge the October 2021 high in the near term after prices pushed into fresh 2022 highs overnight. The Relative Strength Index (RSI) and MACD oscillators signal strong momentum, along with the rising 50-day Simple Moving Average (SMA). That SMA is on track to cross above the 200-day SMA following the past week of bullish price action. That would generate a high-profile bull signal should the SMA crossover occur, commonly referred to as a Golden Cross.
    AUD/USD daily chart

    Source: TradingView Follow Thomas Westwater on Twitter @FxWestwater
    This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products.

    The material on this page does not contain a record of IG’s 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.
    Thomas Westwater | Analyst, DailyFX, New York City
    24 March 2022
  25. ArvinIG

    Markets to watch: WTI, S&P 500 and AUD/USD

    By ArvinIG,


    Analyst article
    Market sentiment has improved despite persistent concerns about the war in Ukraine and global monetary policy.

    Source: Bloomberg   Forex Indices Commodities WTI S&P 500 AUD/USD   Stocks recover but markets still confront a wall of worry
    None of the big risks to the market has disappeared. The war in Ukraine is raging and threatening to add fuel to already hot global inflation. Central banks are tightening their policies to combat surging price growth and China continues to confound as health and economic policy created a mixed growth outlook. With all of this going on, risk appetite has improved in the past week, with stock markets on the rise and riskier currencies flying.
    Here we look at three key markets to watch as investors confront the proverbial wall of worry.
    Top three markets to watch
    1. WTI Crude
     

    Source: TradingView Risk looks skewed to the upside for oil as the conflict in Ukraine threatens exports from Russia and production across the region. Despite the pullback from recent highs, WTI remains in an uptrend, with momentum clearly moving higher. In the near-term, technical resistance can be found at around $US113.50 per barrel, while major support sits around a confluence of support levels – including trendline support – just above $US100.00.
    2. S&P 500

    Source: TradingView Defying the risks posed by the war in Ukraine and more hawkish Fed policy, the S&P 500 is enjoying a tech-led surge, with the index recording its strongest week of gains since November 2020 last week. Momentum has shifted to the upside for the index, with the market breaking through trendline resistance. The next key level of resistance is around 4530/40 now, which if broken may open a play towards the 100-day MA. Support might be found at the index’s 200-day MA.
    3. AUD/USD

    Source: TradingView Surging commodity prices, a strong Australian market, improving risk-appetite and a reversal in short positioning has sparked a major rally – and potential trend reversal – in the AUD/USD. The pair has carved out a clear trend channel with momentum picking up after breaking resistance at 0.7400. The AUD/USD has hit technical resistance now at 0.7480, however, if that breaks, it may open a charge towards 0.7550. Previous resistance at 0.7400 may now become support.
    Follow Kyle Rodda on Twitter @KyleR_IG
    Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.

    Kyle Rodda | Market Analyst, Australia
    23 March 2022

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