NY Open: Wall Street rallies on earnings
FX Trader, Loonieviews.net
Summary: US markets were boosted by Apple and Boeing, but the Fed, Microsoft and Facebook still loom.
Wall Street rallied at the open thanks to Apple (AAPL: Nasdaq) and Boeing (BA: NYSE) results. Apple reported earnings after the market closed yesterday, and the results showed that there is more to Apple than an iPhone. CEO Tim Cook said the quarter’s results “demonstrated the underlying strength of [Apple's] business units” which helped lift earnings-per-share to a record $4.18.
Markets liked the news, and Apple shares jumped 4.43% in early trading.
Walls Street got an added lift when Boeing (BA: NYSE) results were better than forecasts. BA reported Q4 earnings of $5.48/share and earned a record $101.1 billion in revenue. Traders are hoping for similar positive outcomes from Microsoft (MSFT: Nasdaq), and Facebook (FB: Nasdaq) after the close of business today.
Financial markets are looking to Federal Reserve chair Jerome Powell to do his part to keep the party going. The Fed is widely expected to deliver a somewhat dovish policy statement today, emphasising “caution” and “flexibility.” The concern is whether Powell sticks to the script during his press conference and avoids a repeat of the market carnage following the December 21 meeting.
The US dollar has climbed against all the G10 majors since the New York open. This morning’s better than expected ADP employment change data (Actual 213,000 versus a forecasted 178,000) suggests there could be some upside risk to Friday’s nonfarm payrolls, where forecasts call for a gain of 166,000 jobs.
The US dollar strength may be partly driven by trimming of positions ahead of this afternoon's FOMC statement. USDCAD is the only losing currency pair, falling from 1.3235 to 1.3207, undermined by the jump in WTI oil prices to $54.00/barrel.
For those interested in US economic data:
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.