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ChrisB

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About ChrisB

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  1. All trading involves risk. Losses can exceed deposits. Dow Having leapt higher into Q4, the Dow is firmly back in an uptrend – even given its extended move, it is still not ripe for much selling. However, a disappointing NFP might provide the hit to risk appetite that could prompt a drop back towards 22,400 or even lower, but this would still constitute, I suspect another opportunity to ‘buy the dip’ thanks to strong seasonal trends.
  2. All trading involves risk. Losses can exceed deposits. EURUSD is one to watch ahead of NFPs, given the current weakness. NFPs are likely to be weak thanks to the hurricane impact, which didn’t show up in the August figures, so any improvement above expectations, or better-than-expected rise in earnings, could push EURUSD lower. The $1.1662 level is key, being the low from mid-August. A break of that and it could well prompt a swift move lower. With Catalonia hanging over eurozone assets euro bulls will find it hard to move higher, but a push above the end-Sept high at $1.1830 would be a start.
  3. That's the one! I remember watching it rally and wondering if we'd see the trend reassert itself, which lo and behold it did.
  4. 10500 would mark it I think, I'm always cautious about calling turns though (I always say, 'when it's happened, I'll let you know'). I tend to watch the monthly chart as well for a broader trend, then look to movements against that trend for potential opportunities. I'm still kicking myself about that July one.
  5. 'Sell the rally' has been the default option for USDJPY here this year (worked a treat in July), but not surprisingly that big round Y100 number is certainly making life interesting. It's too early IMO to call an end to the ongoing downtrend, but it will be interesting to see how the next bounce in the pair does...
  6. It doesn’t look like it’s going to be a particularly encouraging earnings season for US banks. Stock markets in the US are at all-time highs, leaving little room for the sector to disappoint, since any sour news from the banks would likely cause the market to head rapidly lower. Having solidly outperformed the broader S&P 500 since July 2011, the index took a heavy tumble at the beginning of 2016, and remains below the S&P 500 as the latest reporting period gets underway. Year-to-date, the SP& 500 is up 5.3%, with the banking sector down 10.7%. A contrarian view might suggest that better numbers from the sector might cause some of that underperformance to reverse, at least in the short term. Banks have been particularly exposed to the fallout from the UK’s Brexit vote at the end of June, but they are also acutely sensitive to the US economy, with weaker growth in the second quarter providing cause for concern. Thus, this earnings season could see them hit on two fronts, with only the second factor dropping away as the sector looks ahead. Brexit is a problem that will stay with us all for a long time to come, so we should brace ourselves for the topic to come up again and again in future earnings seasons. A third factor to remember is that US interest rates are not going anywhere fast, at least based on current economic data and current expectations. A rise in rates would have improved lending margins, while a world without Brexit may have seen higher activity in trading, underwriting and M&A, which would have helped fees. There may be one bright spot for the US banks, and it comes from American loan growth figures. If lending margins are not improving, at least the volumes of lending has been increasing. This is a function of the relative health of the US economy, and at least provides one area of hope. Year-on-year, average lending growth has been 5.2% over the past 25 years, but in the second quarter it hit 7.2%. JPMorgan takes its place at the head of the queue for US banks, reporting on 14 July. Earnings are forecast to fall 4% on an adjusted basis while revenue holds relatively steady. It currently has a forward 12 month PE of 10.77, with an average move of 2.3% on the day earnings are announced. Citigroup and Wells Fargo report on Friday. The former is expected to see a hefty 24% drop in adjusted earnings, while revenues are forecast to drop 8.4%. A forward PE of 9 makes it even cheaper than JPMorgan, but this might fall into the ‘value trap’ category. The stock usually sees an average move of 3.2% on the day itself. Wells Fargo, by contrast, is expected to see revenue growth of 2.9%, although adjusted earnings are still expected to see a 2% drop. The stock is the least volatile of the three on earnings day, with an average move of 1.4%. At 11.8 times forward earnings it is the most ‘expensive’ of the bunch, although all three are well below the 16.1 times earnings multiple projected for the S&P 500 in 2017. With its high focus on the US economy and relatively small exposure to the UK and thus to Brexit, it may well look the most attractive (it has fallen by 11.3% so far this year, versus 16% for Citigroup and 4.8% for JPMorgan, although over 5 years it has risen by 70%, versus 3% and 54% for the other two respectively). Chris
  7. A lot is already ‘baked in’ I suspect, given how much a 25 bps cut has been expected. But why would you want to go all out this month when so much data is yet to arrive? Better, at least on the QE (or similar) front to wait until August and the Quarterly Inflation Report, or even into Sept/Oct when more figures are available? The big risk is that they run out of options well before they’re needed.
  8. Quite the day! Market forecasts (per Bloomberg) now have just a 4% chance of a June move, back to where it was before the most recent minutes. US dollar selloff suggests we could see quite a bit of strength in areas like EURUSD and AUDUSD, with the former suggesting that eurozone indices will have a tough time of things. Be aware Janet Yellen speaks on Monday (c. 5.30pm London time) so there is time for the moves today to be reversed. Indices however might find it hard to rally given how bearish people are getting on the US economy.
  9. Looks like the buyers are back in charge for now, 6100 area held and with US markets recovering too we could see another try at 6280 or higher? 
  10. Hi all, It may be that we're seeing the beginning of at least a short-term move higher. I know a lot of people were banging on about a pullback to the 50DMA on the S&P 500, which we've now had. Yesterday may have been the bears' last hurrah for now, especially with earnings season mostly out of the way. 
  11. It has been practically lockstep for weeks now!
  12. Weakness seems to be quite broad based at the minute, with a lot of that down to oil. I quite like the 2hr chart and there's a half decent channel at work: 
  13. It looks like the OPEC hopes have further to run, but WTI needs to get moving above $38 I think to have a real chance of moving on up...
  14. Hi all - interesting times at present on indices. FTSE has been obeying channel lines nicely of late (see chart), so wondering if it'll repeat again and turn back lower?
  15. When Janet Yellen promises, she delivers. That is the message many will take away from the Fed decision tonight. While the press conference is still to come, hopefully bringing with it more clarity on the path for 2016, the absence of dissent and the retention of ‘gradual’ in the statement will mean that, for the next two weeks at least, stock markets can look forward to further gains. Compared to the volatility that might have transpired had they ducked the decision, the reaction has been muted, but then that is probably the outcome Janet was looking for. The problem now is that the easy part is done with. Now attention turns to the path of further rate increases in 2016 and beyond. Given her careful positioning over the course of the past year, it is highly likely that Yellen will seek to keep all her options open. We became used to the phrase ‘data dependant’ in recent months, but it is a refrain that will serve the Fed well in coming months. Perhaps, for now at least, we can all just look forward to Christmas. Chris ___________________________________ 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.
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