Daily Market Report: Dow, Nasdaq, & DAX
US data and earnings impress, but equities drop as easing expectations fall.
WALL STREET: Earnings and retail data impress, but Fed easing expectations continue to dictate movement
Yesterday’s financials release showed record profits for JP Morgan and with Goldman Sachs outperforming as well. Furthermore, retail data was better than expected. Yet, despite positive data and results, equities retraced off the highs. While a part might be due to trade worries, the bulk of recent equity flows have been dictated by Fed policy expectations of a rate cut. Positive data dents those likelihoods, and as a result sends money out of equities. Meanwhile, in terms of sentiment, retail bias is at an extreme short 81%, while institutional bias is a near opposite extreme long 82%. More financials will be released today, with Bank of America amongst them.
US TECH 100: Retracing off the highs ahead of Netflix’s earnings
Tech shares were in relative retreat yesterday with the Nasdaq underperforming, and today’s Netflix earnings will be the first of the FAANG stocks that investors will be tuned in for. We’ll see if they can top 150M subscribers this time around given that subscriber growth slowed and competition in the streaming industry intensifies. In terms of Alphabet (Google), pressure is rising there as well given the administration’s potential investigation. From a technical standpoint (and it’ll mean less with earnings releases from FAANG stocks and Microsoft), it’s still a bull trend technical overview heavily reliant on expectations of Fed easing.
GERMANY 30: Still holding its ground despite dismal data and an uncertain trade outlook
Trade tensions have failed to subside with Trump renewing threats of tariffs of China, and ZEW figures out of the Eurozone’s manufacturing powerhouse contracting further. Overall however, expectations of further ECB easing are what’s aiding share prices in the Eurozone from plummeting (same holds true for US shares though given US data is outperforming the move has been opposite). The technical overview is nowhere near as bullish as US indices that recently made fresh records, but positive technical bias is still there with its price above all its main long-term moving averages.
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