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Markets await US bank earnings

Wall Street closed flat as investors looked ahead cautiously to the start of earnings season. Whilst financial firms pushed higher on the expectation of decent figures, a more general fear that first quarter earnings will disappoint kept stocks in check.

The outlook is not that great, and it is getting worse. Q1 earnings are expected to decline -4.2% year on year, worse that -3.9% decline forecast just a week earlier. This will be the first time that earnings have declined since 2016. Wells Fargo and JP Morgan kick off earnings today. With an earnings decline on the cards, the big banks, more so than ever, will be used as bellwethers for the rest of the S&P 500.

Whilst earnings will of course be watched closely, this is of course a backward-looking measure; forward guidance will be key. This is the information that will tell us whether Q1 negative earnings are just a bump in the road, or whether this is the start of a far more sinister trend.

Solid US Labour Market Boosts Dollar

The dollar snapped a three-day losing streak, jumping 0.2% higher versus a basket of currencies. The buck rallied as US data showed that the US labour market continued to tighten. US jobless claims hit a 49-year low; just 196,000 people filed for unemployment benefits. The impressive stats come just a week after US non-farm payrolls showed job creation was alive and well in the US. A strong labour market brings inflationary pressure, an essential ingredient for the Fed to even consider raising interest rates later in the year.

Baker Hughes Rigg Count To Drive Oil
Oil has been a big story this week with decent swings in the price. Oil experienced strong gains at the beginning of the week owing to fears of supply outages in Libya, as the conflict in the oil producing North African country escalated. These fears combined with OPEC output cuts lifted oil to year to date highs. An unexpected surge in US oil inventories pulled oil back from 5 months highs. Investors will now look towards US Baker Hughes rig count.

Last week’s figures showed that the number of active oil rigs operating in the US increased by 15 to 831. That was the first increase in 7 weeks. 2 consecutive increases in active rigs, plus an upsurge in US crude stockpiles, fears will be growing that US energy producers are about to ramp up production. Crude fell 1.4% across the previous session. the price remains above its main sma’s meaning that the bull trend is still intact.  

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24-5-2019

Nikkei on for 3rd week of losses as oil crashes
After heavy falls on Wall Street overnight, Asian markets pared earlier losses, but were still on track for a third week of declines as investors remain focused on the US – China trade dispute. European and US futures are pointing to a positive start after the… Read more

23-5-2019

Euro dips as European elections kick off
Fears that the trade dispute will morph into a prolonged trade war sent Asian stocks lower overnight. European and US futures are pointing to another day of losses. The steps being taken by each of the powers, but principally the US are not actions of those i… Read more

21-5-2019

Nasdaq with US tech sector plummet on Huawei decision
Wall Street closed lower as the fallout from Huawei dragged down tech stocks. The Nasdaq plummeted 1.7% on Monday as the crackdown on China’s largest telecommunications and electronic equipment maker pressured the US technology sector. US chip makers tumbled a… Read more

20-5-2019

Oil jumps as OPEC signals intention to maintain cuts
Markets Mixed As Google Suspends Business with Huawei Asian markets put in a mixed performance overnight as investors paused, waiting for new developments in the US – China trade dispute. This comes after a week of escalating tensions between the two powers. … Read more

17-5-2019

Pound below $1.28 as Theresa May prepares to leave
Wall Street closed higher for a third straight session overnight as solid economic data and robust earnings from the likes of Cisco and Walmart boosted sentiment. Investors put US China trade dispute anxieties behind them and continued to jump back into equiti… Read more

16-5-2019

Trump's Visible Hand Drives Markets
The Dow and the broader US market extended the relief rally on Wednesday amid easing trade tensions. News that Trump would restart trade talks with China boosted optimism that the two powers could avoid a prolonged, economically damaging trade war. But it woul… Read more

15-5-2019

Stocks Rebound with Chinese Stimulus Hopes
Asian markets followed Wall Street higher overnight as trade war fears eased. Markets across Asia rebounded from 3 ½ month lows on a softening of stance from Trump and amid growing expectations of further stimulus from the Chinese government. Despite the advan… Read more

14-5-2019

Worst Day on Wall Street Since Jan 3
Wall Street closed deeply in the red on Monday. The Dow shed over 600 points and the S&P dumped 2.5% in the worst trading day since 3rd January. Investors rushed to take risk off the table as China raised tariffs on US imports, a retaliatory measure to the… Read more