NY Open: Wall Street chilled by Chinese cold front
FX Trader, Loonieviews.net
Summary: US shares are in the red today with Caterpillar and Nvidia leading the charge lower.
Caterpillar (CAT: NYSE) is getting skinned in early trading after the company’s earnings and forward guidance disappointed analysts. CAT earnings per share of $2.55 fell short of expectations of $2.98 and 2019 forward guidance also disappointed, due to lower than expected demand from China. CAT shares dropped 8.0% as of 14:00 GMT.
China was also blamed for NVIDIA (NVDA: NASDAQ) cutting its Q4 revenue guidance to $2.20 billion from $2.70bn, and it doesn’t even report earnings until February 14. NVDA plunged 15.5% in early trading.
The China and Nvidia reports spooked the rest of Wall Street and sparked a broad sell-off in equities. The three major US indices were deep in the red by 14:00 GMT.
USDCAD is the biggest gainer since the New York open, climbing steadily from 1.3225 to 1.3282, supported by the ongoing drop in oil prices. WTI fell from $52.69 to $51.93/barrel during that period; AUDUSD and NZDUSD are only marginally lower.
EURUSD is a tad higher after bouncing around in a 1.1404-1.1428 range. Prices managed to squeeze higher even after European Central bank president Mario Draghi repeated that weak data underscores the need for stimulus. GBPUSD managed to hold on to overnight gains and as of 14:00 GMT, is unchanged.
WTI oil prices snapped a month-long rally when they dropped below $52.50/barrel this morning. A decisive break below $51.80 targets further losses to $50.55/b. Sellers emerged after Saudi Arabian oil minister Khalid al-Falih said the Venezuela oil crisis is not affecting the oil market. Caution around the US/China trade talks also undermined prices.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.
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