Daily Market Report by GulfBrokers 2020-2021

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Global markets commenced on a mixed note in 2022. Meanwhile, the global equity markets ended near the record high last year despite the arrival of the Omicron variant.

Some of the key factors that drove the global equity markets higher in 2021

  • Robust earnings
  • Strong economic fundamentals
  • Record pace of vaccinations
  • Fiscal and monetary policy stimulus
As we open a chapter for 2022 and move into the 2nd week. Here are the 3 main market drivers you need to watch this year.

1. Inflation

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Inflation was one of the key factors that drove the global markets last year and it is still running at record highs. The rising inflation is expected to be one of the big economic issues in the first half of 2022. inflation has risen due to supply chain disruptions and elevated commodity prices. Central banks across the globe began to tighten monetary policy in late 2021 due to this sudden rise in inflation and several banks including BOE and RBNZ already increased the interest rates. US Federal Reserve said it will double the reduction of asset purchases to $30 billion per month and signaled three rate hikes in 2022 amid expectations for continued inflation pressures. ECB also said it would end its emergency asset purchase program in March.

2. New Covid-19 variants

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Variants of COVID-19 continue to raise concerns for the world economic recovery as the global Covid death toll has passed 5.4 million. The omicron variant represents a growing share of new COVID-19 cases and has led some economies to reimpose tighter mobility restrictions. The new global case numbers have soared 270% since Omicron was discovered in South Africa in November 2021. A number of countries, particularly in Europe, reimpose restrictions after a dramatic increase of cases, which has raised a few concerns over global growth.

3. World Central Banks decision

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Global central bankers were the first out of the gates to attack the financial fallout from the coronavirus. The banks lowered the interest rates and introduced huge stimulus to support the economy. The central banks continue to assess risks from the Omicron variant of the coronavirus even as they consider reducing emergency measures due to high inflation. If inflation continues to rise, then the central banks will really be forced to raise interest rates, we could see potential volatility in the global markets.

Conclusion

However, considering all the above fundamental drivers the overall bullish theme is expected to continue for the long term. For further safer side investors must continue to invest in fundamentally strong stocks and should diversify the portfolio by adding bonds, commodities, and currencies.

Read more- https://gulfbrokers.com/en/3-key-market-drivers-for-2022
 
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Global markets mixed on Wednesday as traders await December US inflation data that is set to be announced later in the day, which could trigger volatility in the market. Inflation is expected to have risen by 5.4% in December, its highest in decades, and up from 4.9% in the previous month.

EQUITIES

US stock futures trade flat as investors remained cautious ahead of the highly anticipated US inflation data. During the previous session, Wall Street ended higher boosted by the oil prices rally and mixed comments from Fed Chair Powell.

OIL

Crude oil futures extend gains on Wednesday despite the release of weaker-than-expected API inventory data. The data showed the US crude inventories fell by 1.077 million barrels in the week ended January 7th.

CURRENCIES

In the currency market, the US dollar index, which measures the greenback’s value against a basket of six major currencies hits the fresh weekly low of 95.55 on Wednesday. At the time of writing, the greenback slightly recovered from the early session lows.

GOLD

The safe-haven metal up for the third consecutive day as fragile risk conditions boosted defensive support. Overall, the momentum remains bullish throughout the European session.

Economic Outlook

On the data front, US FED chair Jerome Powell testified before a Senate committee on his renomination as the Chairman of the US Federal Reserve. Powell believes the Fed will take steps towards normalizing policy this year.

Moving ahead today, the important events to watch:

US – CPI: GMT – 13.30

US – EIA crude inventories: GMT – 15.30

Coronavirus update:

Worldwide, more than 305 million people have been confirmed infected and more than 5.49 million have died. The United States has confirmed over 60 million cases and has had more than 837,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook and Review

EURUSD:
For today the first support for the Euro appears to be around 1.1340, in the short-term any break below 1.1340 is the next downside level is to watch 1.1300/1.1270. On the other upper side, the immediate resistance around 1.1385 any break and close above this level will open 1.1410 then 1.1440.

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The important levels to watch for today: Support- 1.1340 and 1.1300 Resistance- 1.1385 and 1.1410.

GOLD: The yellow metal trading steady on Wednesday. Any break above $1820 levels can extend gold prices towards $1830 in the coming days and on the other hand the immediate support is around $1810 and $1800.

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The important levels to watch for today: Support- 1810 and 1800 Resistance- 1820 and 1832.

Quote of the day - A trading philosophy is something that cannot just be transferred from one person to another; it’s something that you have to acquire yourself through time and effort - Richard Driehaus.

Read more- https://gulfbrokers.com/en/daily-market-report-431
 
I think inflation and corresponding interest rate decsions are going to be the biggest determining factor this year. Unless a deadlier variant of covid evolves I think it's largely priced in now.
 
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Airline stock Delta Airlines (NYSE: DAL) is scheduled to announce its fourth-quarter earnings report today before the market open. The airline stock investors are eagerly waiting for the latest earnings results from the leading US-based airline after the spread of the Omicron variant has already put some pressure on the industry.

Delta is expected to post quarterly earnings of $0.12 per share and revenues are expected to be $9.20 billion.

$STX key technical levels to watch today

Support: $38.90 and $37.30

Resistance: $42 and $45.50

EQUITIES

European shares opened mixed despite the release of better-than-expected earnings results. Meanwhile, the US stock futures remain flat as investors shift their focus to the upcoming earnings season.

OIL

Crude oil futures holding the previous session gains. The recent bullish momentum was boosted by the weaker US dollar and stronger-than-expected oil inventory data from EIA and API. The EIA data showed the US crude oil inventories fell by 4.553 million barrels in the week ending January 7th, compared with market forecasts of a 1.904 million drop.

CURRENCIES

In the currency market, the euro is on its third consecutive session of gains against the dollar during early Thursday trading. On the other hand, the US dollar index plunged to the fresh 3 month low. At the time of writing, the Index traded below 94.80.

GOLD

The dollar’s decline following the release of the latest inflation report in the previous session has lifted the gold price. Overall, the momentum remains bullish throughout the Asian session.

Economic Outlook

On the data front, The US Inflation jumped at its fastest pace in nearly 40 years last month. US consumer prices rose 0.5 per cent in December and 7 per cent in annual terms, following a 6.8 per cent rise in November.

Moving ahead today, the important events to watch:

US – PPI: GMT – 13.30

US – Initial jobless claims: GMT – 13.30

Coronavirus update:

Worldwide, more than 305 million people have been confirmed infected and more than 5.49 million have died. The United States has confirmed over 60 million cases and has had more than 837,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook and Review

EURUSD:
Technically the overall momentum remains bullish, the immediate support for the Euro stands near the level of 1.1430 then 1.1385. On the flip side, the first resistance at 1.1480 any break above this level will open 1.1520 minimum.

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The important levels to watch for today: Support- 1.1430 and 1.1400 Resistance- 1.1476 and 1.1500.

GOLD: The yellow metal hovers above the $1820 area. If the bullish momentum continues the next upside levels to watch $1826 and $1832. On the downside side, $1814 is a crucial support area to watch.

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The important levels to watch for today: Support- 1820 and 1814 Resistance- 1826 and 1834.

Quote of the day - “Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we’re trying to do. It’s imperfect, but that’s what it’s all about” – Warren Buffet.

Read more- https://gulfbrokers.com/en/daily-market-report-432
 
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The second-largest cryptocurrency Ethereum (ETH) extended gains for the second consecutive day, it has rebounded back to above $3,350 on Wednesday. During the last week, Ethereum slips to a fresh 4 month low of $2,930 following the release of minutes from the Federal Reserve Board’s December meeting. The last time ETH dropped below $3,000 was in late September. The minutes indicated the central bank could raise interest rates faster than expected amid tight labor conditions and rising inflation.

ETHUSD Technical Review

HASH


Technically the overall momentum remains mixed after the last few weeks sell-off. I expect the pair is likely to see more volatility going forward. In the short term, if the bullish momentum continues the next upside levels to watch $3430 and $3460. A further recovery allows for a push towards $3560 and $3650 serving as additional upside targets. On the flip side, a breakdown through $3190 would negate that bias and suggest a test of the $2980 and $2900 support regions.

In the long term, watch for the important breakout at $3700 and $2900, which will give a larger confirmation of direction in the long term.

Read more- https://gulfbrokers.com/en/ethereum-recovering-lost-ground-but-will-the-rebound-last
 
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The US retail sales report for December is the highlight of today’s economic calendar. The commerce department will release the retail sales data at 13:30 GMT. The market expects to see sequential growth if modestly slowing, with the December print up just 0.1% down from a 0.3% increase in the previous month.

EQUITIES

Wall Street ended lower on Thursday following the comments from Fed governor Lael Brainard. She said that the Fed is likely to start raising interest rates in March. The Fed must pay attention to risks that have low probability but could result in major damage to the economy, Brainard said.

On the earnings front, the banking giants JPMORGAN, CITI and WELLS FARGO reporting earnings today before the bell.

OIL

Crude oil futures slightly retreat from the weekly highs on Friday as the investors remained cautious about the impact of the coronavirus Omicron variant on demand for fuel.

CURRENCIES

In the currency market, the US dollar remains under pressure. The strong bearish momentum fuelled by several Fed officials publicly advocated for rate hikes to start at the March 15-16 policy meeting.

GOLD

The safe-haven metal upside momentum continues as the USD is ended lower for a third straight session. Moving ahead to the North American session, the gold traders should closely monitor the release of the latest US retail sales data.

Economic Outlook

On the data front, the Labor Department released the latest US jobless claims data. The data showed US weekly Jobless claims unexpectedly rose to 230k, up from 207k, marking the highest number of initial claims since mid-November.

Moving ahead today, the important events to watch:

US – Retail sales: GMT – 13.30

US – Michigan consumer sentiment: GMT – 15.00

Coronavirus update:

Worldwide, more than 310 million people have been confirmed infected and more than 5.5 million have died. The United States has confirmed over 61 million cases and has had more than 840,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook and Review

EURUSD:
The currency pair trading unchanged on Friday but holding the weekly gains. At the time of writing, the pair trades above 1.1470.

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The important levels to watch for today: Support- 1.1430 and 1.1400 Resistance- 1.1490 and 1.1520.

GOLD: For today, the resistance for Gold is around 1835, any break over targets 1840/48. On the other side, the immediate support near 1822 and any break will drag the metal to 1814/10 levels.

gold neww


The important levels to watch for today: Support- 1822 and 1814 Resistance- 1830 and 1836.

Quote of the day - It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price- Warren Buffet.

Read more- https://gulfbrokers.com/en/daily-market-report-433
 
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Global equities ended last week on a downbeat note driven by mixed earnings results, rising inflation and omicron fears. Moving ahead to this week, the COVID-19 headlines, the latest inflation data from UK and Eurozone, and the Q4 earnings season stand out as key events.

On the earnings front, the companies due to release their results will be the banking gaints GOLDMAN SACHS, MORGAN STANLEY, BANK OF AMERICA and the video streaming pioneer NETFLIX will be among those reporting earnings this week.

GOLD

The safe-haven metal holding the gains as higher inflation tends to push the demand for safe-havens to the upside. The latest US inflation data showed that the headline CPI jumped to 7%, which was the highest level since 1982.

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For this week, considering heavy volatility there are chances the metal can rally back to above the key resistance $1832. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1800 and $1795 if the metal breaks below $1812.

DOLLAR INDEX

The US dollar index, which measures the value of the greenback against a basket of six major currencies, remained under pressure for the whole last week and hits its lowest level in three months. This is the sharpest weekly decline seen in the DXY since May 2021. Moving ahead, no important economic events are expected from the US this week, and so the focus shifts back on the coranavirus headlines.

DXY


This week, the pair needs to stay above 95.60 to have a chance to develop upside momentum in the near term. If the price break and closes above 95.60, the next upside level to watch is 95.80 then 96.20. On the downside, if the index break below the previous week low of 94.60 the next immediate downside area is to watch 94.00 and 93.80

EURUSD

The currency pair could see a resumption of the upside move this week if the pair holds the current upside momentum. However, considering the recent strong rebound, the US dollar movement will continue to play a vital role in the Euro future direction. The main attraction for EURO this week, the Eurozone inflation figures and ECB meeting minutes on Thursday.

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The currency remained in a range above 1.1300 last week, and the initial bias remains neutral for the upcoming week. The key resistance is located for the pair around 1.1480, a break above this level will confirm a possible move to 1.1500/20. On the downside, any meaningful pullback now seems to find some support near the 1.1360 zones, below which the slide could further get extended towards the 1.1300 region.

DOW JONES

Dow Jones ended lower for the second consecutive week. In this week, Dow traders are expected to be highly concerned about the US economic health going forward following the release weaker-than-expected US retail sales data on Friday. US retail spending decreased by 1.9% in December, much worse than the expected 0.1% decline.

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Technically the overall momentum remains bearish. However, we can see that the index slightly rebounded after touching the lower trendline shown in white. This week, If the bearish momentum continues the next key support area is to watch is 35,600 then 35,430. On the upper side, If the index regains upside momentum and press back above 36,050 then the key resistance area to watch is 36,300/550.

Read more- https://gulfbrokers.com/en/weekly-analysis-gold-usd-eurusd-and-dow-jones-1
 
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Gold price trades below the key support area of $1812. Technically the overall momentum remains mixed for the metal after the bulls failed to extend the rally. In the short term if the price breaks below $1812 which would open doors towards last week low of $1806 and below that $1800/1795 is next. On the upper side, the first immediate resistance can be found at $1822 and then $1826/32.

In the long term, watch for trendline breakout at $1780 and $1835, which will give a larger confirmation of direction in the long term.

EQUITIES

US stock futures remained under pressure as the investors are anticipating sooner-than-projected balance sheet reduction by the Fed.

On the earnings front, PNC, Goldman Sachs and JB Hunt are amongst those reporting the last quarter financial results today.

OIL

Brent oil futures hit a fresh high since 2014 on Tuesday on worries about possible supply disruptions after Yemen's Houthi group attacked the United Arab Emirates. US crude futures reached their highest level since October 2021.

CURRENCIES

In the currency market, the British pound trade flat near 1.3640 following the release of the mixed UK employment report. The UK employment rate dropped to 4.1% in the last quarter, below market expectations of 4.2%.

GOLD

The safe-haven metal struggling to find the upside momentum after the US dollar has started to recover from the last week sell-off. This rebound in the greenback is a negative element for gold and may make a rebound in price difficult.

Economic Outlook

On the data front, the Bank of Japan left its monetary policy stimulus unchanged during its January meeting. The central bank revised its next fiscal year’s inflation forecast up from 0.9 percent to 1.1 percent.

Moving ahead today, the important events to watch:

Germany – ZEW economic sentiment: GMT – 10.00

US – NY Empire State Manufacturing Index: GMT – 13.30

Coronavirus update:

Worldwide, more than 320 million people have been confirmed infected and more than 5.54 million have died. The United States has confirmed over 63 million cases and has had more than 850,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook and Review

EURUSD:
For today, the resistance for Euro is around 1.1440. On the other side, the immediate support is at 1.1360 and any break will drag the pair to 1.1320/00 levels.

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The important levels to watch for today: Support- 1.1380 and 1.1360 Resistance- 1.1440 and 1.1480.

GBPNZD: GBPNZD hovers near the key resistance area, watch carefully for the sharp reversal. On the downside, any meaningful pullback now seems to find some support near the 2.0040 zones, below which the slide could further get extended towards the 1.9940 region

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The important levels to watch for today: Support- 2.0090 and 2.0030 Resistance- 2.0150 and 2.0190.

Quote of the day - Smart investing doesn’t consist of buying good assets, but of buying assets well. This is a very, very important distinction that very, very few people understand - Howard Marks.

Read the detailed report here- https://gulfbrokers.com/en/daily-market-report-434
 
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Global stocks remain under pressure driven by surging bond yields and rising inflation pressures. The benchmark US Treasury Yield, on a 10-year note, reached its highest level in two years. On the other hand, the investors are also nervous about the earlier-than-expected interest rate increase in the United States. The US Federal Reserve is broadly expected to increase the rates three times this year.

EQUITIES

Wall Street closed sharply lower on Tuesday; technology companies led a broad slide in stocks Tuesday on Wall Street. The sell-off is also driven by weaker-than-expected earnings results and economic data.

On the earnings front, Bank of America, Morgan Stanley, and United Airlines are amongst those reporting the last quarter financial results today.

OIL

Crude oil futures extend the gains on Wednesday. The recent bullish sentiment was boosted by geopolitical tensions, an attack on an Abu Dhabi oil facility by Iran-backed Houthi militants from Yemen.

CURRENCIES

In the currency market, the Euro ignored stronger-than-expected consumer sentiment data from Germany and Eurozone. The currency pair fell to a fresh weekly low of 1.1315 on Tuesday against the US dollar. The US dollar holding the previous session gains. At the time of writing, the king dollar trades above 95.60.

GOLD

The safe-haven metal retreats back to below $1812 on Wednesday as Treasury yields continued to push higher after they surged to their highest levels in roughly two years Tuesday.

Economic Outlook

On the data front, the UK released the latest inflation figures. The annual inflation rate in the UK increased to 5.4% in December from 5.1% in November and above market forecasts of 5.2%. It is the highest reading since March 1992.

Moving ahead today, the important events to watch:

US – Building permits: GMT – 13.30

Canada – CPI: GMT – 13.30

Coronavirus update:

Worldwide, more than 320 million people have been confirmed infected and more than 5.54 million have died. The United States has confirmed over 63 million cases and has had more than 850,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook and Review

EURUSD:
The currency pair continuously traded weaker against the dollar on Wednesday. For today, the key support area to watch is 1.1300 then 1.1280.

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The important levels to watch for today: Support- 1.1300 and 1.1280 Resistance- 1.1340 and 1.1380.

GOLD: For today, if the metal break above $1822 will open the doors to $1826 and $1832. On the flip side, if the price break below the $1812 level the next support to watch is $1806 and $1800.

gold neww


The important levels to watch for today: Support- 1806 and 1800 Resistance- 1822 and 1826.

Quote of the day - “If you can learn to create a state of mind that is not affected by the market’s behaviour, the struggle will cease to exist.” – Mark Douglas.

Read more- https://gulfbrokers.com/en/daily-market-report-435
 
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The economic recovery is likely to continue this year but there can be plenty of volatility due to these three reasons.

  • High inflation
  • Diminishing central bank support
  • Coronavirus uncertainty
However, Gulf Brokers has handpicked some of the best assets class investments that are worthy to be watched this year.

US DOLLAR

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The US dollar is a financial instrument that is expected to gain value during periods of uncertainty. 2021 was the best year for the greenback since 2015. The dollar index, which measures the greenback against six major rivals ended last year with a gain of more than 6%. Recently, the dollar Index slightly retreats from last year highs after the latest data showed U.S. consumer inflation fell within estimates. The king dollar is expected to regain the upside momentum in the coming days after the consolidation.

SILVER

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Precious metals, gold and silver are generally seen as safe investments and resilient against inflation. Silver represents the second most popular precious metal, which is perceived as a cheaper alternative to gold. Silver price dropped by more than 13% in 2021 weighed down by the strong US dollar and rising bond yields. But we believe the metal is still a bargain buy for this year around $22 compared to gold following the correction in 2021.

EV STOCKS

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Global stocks wrapped up 2021 at record highs. Last year was a phenomenal year for the EV sector. The electric car industry continued to grow in the coming days, 2022 seems a great year as many developments have been made and promised in this year.

10 important EV stocks the investors should watch this year

  1. Lucid Motors (LCID)
  2. Nio (NIO)
  3. Tesla (TSLA)
  4. Ford (F)
  5. General Motors (GM)
  6. Volkswagen (VOW)
  7. Xpeng (XPEV)
  8. BMW (BMW)
  9. LI AUTO (LI)
  10. FISKER (FSR)

BITCOIN

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Bitcoin can be one of the alternatives investors can look out for during the stock market’s downtime. Bitcoin jumped 66% last year and hit a record high. Technically the overall momentum remained bearish for the crypto pair after the last few months downside move. In the long term, there are chances the Bitcoin may eventually rise back if it continues to find buyers on dips. While investors should, nevertheless, keep in mind that the price of bitcoin is very volatile and investing in them is often compared to gambling.

CRUDE OIL

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Oil prices rallied more than 50% last year and it should of course continue the longer-term momentum, which is most certainly to the upside. Meanwhile, the oil traders should keep an eye on the rising fears over climbing pandemic case counts and the prevalence of the omicron variant of COVID-19. The volatility is still strong and in the long term, we expect the crude oil prices likely to pull back before the bounce due to the ongoing Omicron uncertainty.

Read more- https://gulfbrokers.com/en/top-5-assets-to-watch-in-2022
 
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