Daily Market Outlook, January 25, 2023
Daily Market Outlook, January 25, 2023
Microsoft’s Poor Guidance Puts A Lid On Tech Enthusiasm, Tesla On Deck Today
Asian markets are trading with a mixed tone as the handover from Wall Street lacked the optimism of recent sessions as Microsoft announced earnings that came in marginally better than consensus, however, guidance for the remainder of 2023 was somewhat downbeat leading to declines in US indices in after hours trading, dragging on Asian markets at the open. The earnings concerns were coupled with inflation data out of Australia which came firmer than anticipated, printing at the highest levels since 1990, leading markets to reprice rate expectations for the RBA to the upside.
Data within the European trading session will be confined to the German IFO release, amongst a rather sparse data docket in the UK and the Eurozone. Yesterday’s German manufacturing data printed below expectations, while its services metric came in with a surprise to the upside, above the pivotal 50 level suggesting expansion in the sector. The business climate in Europe has been supported by a warmer winter than had been expected, meaning less demand for energy. ECB Chief Lagarde also highlighted that there are nascent signs of improvement in economic conditions since the last ECB meeting in December, recent upticks in IFO reading support this view, after back to back gains in the last two months of 2022 markets will be looking for a hattrick today.
In the US session, focus will be on housing related data in the form of the MBA Mortgage applications, there has been a recent thaw in the frozen mortgage market activity, with refinancing and purchases picking up in January, however, these activity still remains well below that seen 12 months ago. North of the border the Bank of Canada will announce its interest rate policy update this afternoon, markets are pricing a further increase of 25bps today, this would be the lowest increase in the current tightening cycle which has see a net 400bps move higher so far, market watchers are eyeing the potential for a pause after today’s move, as concerns are rising regarding growth prospects, Governor Macklems presser will be parsed for signs of acknowledgement of increasing downside risks to the economy.
Markets-wise, European bourses are opening on the softer side as investors mull further earnings risks, with former tech darling Tesla set to announce earnings after the close of New York trade today, once again all eyes will be on forward guidance for the year ahead, further confirmation of Microsoft's downbeat assessment will likely weigh further on risk appetite, spurring further weakness in benchmark equity indices. Commodity and currency markets continue to mark time ahead of the FOMC meeting next week, both Gold and Crude pared some of their upside but remain within recent ranges, the same with the Dollar Index that continues to rotate sound the 102 handle, with Euro in the same rotation around 1.09 as the US 10yr yield retains proximity to the 3.5% level.
Overnight News of Note
Tech Leads US, European Futures Lower; Asia Shares Mixed
Microsoft Erases Gains After Saying Azure Growth To Decelerate
Australia Inflation Surges Again In Q4, Argues For More Rate Hikes
New Zealand Rate Bets Trimmed As Inflation Misses RBNZ Forecast
Aussie Jumps, Kiwi Slumps After Inflation Data
Yellen Advises Of Fresh Extraordinary US Debt-Limit Manoeuvre
US Leans Toward Providing Abrams Tanks To Ukraine
Germany To Send Leopard 2s And Allow Others To Export
Bond Traders Hedge Prospect That This May Be Fed’s Last Hike
Bitcoin Eyes First Two-Day Drop Of 2023 As Microsoft Dents Mood
Oil Advances As Traders Look To China, OPEC For Fresh Triggers
Tech Leads US, European Futures Lower; Asia Shares Mixed
Texas Instruments’ Sales Drop for the First Time Since 2020
Rupert Murdoch Calls Off Proposed Fox-News Corp Merger
Tesla Invests $3.6B To Expand Nevada Complex With Two Factories
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Options Expiration For the New York Cut 10am EST
(BOLD expiries with a value of a Billion+ more magnetic if price is within the daily trading range)
EURGBP .8505, .9605
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 3980
Primary support is 3885
Primary objective is 4055
Below 3840 opens 3800
20 Day VWAP bullish, 5 Day VWAP bullish
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EURUSD Bias: Intraday Bullish Above Bearish below 1.0835
Primary support is 1.0750
Primary objective is 1.10
Below 1.0730 opens 1.0610
20 Day VWAP bullish, 5 Day VWAP bullish
GBPUSD Bias: Intraday Bullish Above Bearish below 1.2250
Primary support is 1.2180
Primary objective 1.2460
Below 1.2150 opens 1.2100
20 Day VWAP bullish, 5 Day VWAP bearish
USDJPY Bias: Intraday Bullish above Bearish Below 131.50
Primary resistance is 132.30
Primary objective is 125.00
Above 133.00 opens 135.00
20 Day VWAP bearish, 5 Day VWAP bullish
AUDUSD Bias: Intraday Bullish Above Bearish below .7060
Primary support is .6950
Primary objective is .7250
Below .6930 opens .6870
20 Day VWAP bullish, 5 Day bullish VWAP
BTCUSD Intraday Bias: Bullish Above Bearish below 22500
Primary support 20300
Primary objective is 25000
Below 20200 opens 19400
20 Day VWAP bullish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!