What next for stocks as bonds crash?

Despite the slump in prices, UK government bonds remain too expensive. Stocks are much better value, says Max King.

from Moneyweek RSS Feed https://moneyweek.com/investments/stockmarkets/605444/what-next-for-stocks-as-bonds-crash
via IFTTT

Market Update – October 20 – 35th Anniversary Not Too Traumatic

• USDIndex rallies to 113 but currently steady. Yields jump near the highs of the session, and indeed multi-year peaks, with some impetus from higher than expected inflation out of the UK and Canada. Ongoing hawkish Fedspeak kept bond bears in control too. The break of 4.10% on the 10-year added to the selloff, as did a disappointing 20-year auction and a hefty corporate calendar.
• Supply is pressuring stock market with a corporate issuance and a 20-year auction hitting today. Lockheed Martin has a 5-tranche sale slated, including 3-, 5-, 10-, 32-, and 41-year maturities. Diageo Capital has a 3-, 5-, and 10-year offering on the calendar.  Procter & Gamble and Nestlé reported lower sales volumes
• Stocks – Stocks closed in red, as the US100, the tech heavy index finished with a -0.85% loss, the US500 was off -0.67%, with the US30 down -0.33%.
• 
• EUR – turns down to 20-DMA & below 0.9800. 
• JPY – held below 150 as BOJ announces unscheduled bond buying as key yield broke ceiling ($667 million in government debt).
• GBP – under pressure at 1.1856. Britain’s interior minister Suella Braverman, resign criticising Liz Truss. This reflects the continued erosion of the PM’s authority after just weeks in the job. 1922 Committee meets today!
• USOil – climbed 3.55% to $85.76, ignoring the White House’s announcement of an additional 15 mln barrels of oil to be released from the SPR. Nat gas slumped another -5.24% to $5.44.
• Gold – extends lower! Currently at $1629 area.

Today – EU Aug. current account, US Oct. Philly Fed index & Sep. existing homes. Earnings: Ericcson, ABB, Akzo Nobel, Nordea, Volvo, Danaher, Philip Morris, AT&T, Barclays etc.

Biggest FX Mover @ (06:30 GMT) EURCHF spike to 0.9840. MAs aligned higher, MACD histogram & signal bullishly crossed, RSI 69 & rising.  H1 ATR 0.00087, Daily ATR 0.00641. 

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /527158/
via IFTTT

Learn about money – join our Money Masterclass

From what is a fund, why your credit score matters to how pensions work – our master class will deliver you financial education to your inbox every week to help everyone learn about money.

from Moneyweek RSS Feed https://moneyweek.com/investments/investment-strategy/605449/learn-about-money
via IFTTT

The best cash Isas – October 2022

Cash Isas may be making a comeback as rates creep up – here are the best cash Isas on the market today.

from Moneyweek RSS Feed https://moneyweek.com/personal-finance/savings/isas/stocks-and-shares-isas/the-best-cash-isas-october-2022
via IFTTT

Medtronic stock looks cheap

Medtronic stock seems undervalued considering the company’s position in the heart, spinal and diabetes markets – could it be one for your portfolio?

from Moneyweek RSS Feed https://moneyweek.com/investments/stocks-and-shares/share-tips/605448/buy-medtronic-stock
via IFTTT

UK inflation back to 10.1%

UK inflation creeps back to its 40-year high from the summer, driven by rising food costs

from Moneyweek RSS Feed https://moneyweek.com/economy/inflation/605443/inflation-rises-ten-percent
via IFTTT

What could be in the chancellor’s statement on 31 October?

After dismantling most of the mini-Budget in a series of U-turns, Jeremy Hunt will reveal the rest of his “medium-term fiscal plan” on Halloween. We look at what changes could be announced, and the potential impact on your personal finances

from Moneyweek RSS Feed https://moneyweek.com/economy/uk-economy/budget/605442/what-could-be-in-chancellor-statement-october
via IFTTT

Market Update – October 19 – Inflation hasnt disappeared

• USDIndex steady below 20-DMA at 112.20.  Yields are rising and the rally in stocks is petering out, although ASX and Nikkei still managed to post modest gains and futures are up across Europe and the US. The 10-year Treasury rate has lifted 4.4 bp to 4.05% though and the Bund yield is up 1.1 bp at 2.3%.
• EUR – holds Tuesday’s gains at 0.9830. 
• JPY – at 149.42 and is eyeing the psychological important 1.50 mark.
• GBP  – slightly below 1.1300 again. UK inflation higher than expected at 10.1% in September, versus 9.9% in August and compared to consensus expectations for a 10.1% y/y reading. RPI, still an important indicator for wage negotiations, lifted to 12.6% from 12.3%.  Numbers will add to the arguments in favor of at least a 75 bp hike from the BoE in November.
• 
• Stocks – Stocks surged at the open, rising over 2%, but closed with gains of 1.13% on the US30, 1.16% on the  US500 (back over 3700), and 0.90% on the US100. Some decent earnings news, and hopes for more of the same (Netflix beat in after-ours release) helped underpin.
• Netflix shares ticked up to the highest at $248.98 following results that beat consensus estimates: EPS: $3.10; Rev: $7.93B; Global Subscribers: +2.41 mil. The management ‘very optimistic’ regarding its new ad-supported plan But later closed the day lower at $240.74
• USOil – dropped -2.67% to $83.18 after the White House confirmed additional supply of 10 to 15 mln barrels will be released from the SPR and natgas tumbled -4.77% to $5.71, the lowest close since July 7. D
• Gold – dropped to $1642.
• BTC – extends some gains from yesterday to $19534.

Today – EU HICP, BoC Inflation and US Housing Starts & Building permits

Biggest FX Mover @ (06:30 GMT) XAUUSD drifted to 1637. MAs aligned lower, MACD histogram & signal line extend down, RSI 22 but flattened.  H1 ATR 3.16, Daily ATR 26.11. 

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /526770/
via IFTTT

3 UK shares to buy now

3 UK shares to buy now, according to a fund manager

from Moneyweek RSS Feed https://moneyweek.com/investments/stockmarkets/uk-stockmarkets/605291/the-best-uk-shares-to-buy-now
via IFTTT

Invest in property with these 5 Reits

One of the best ways to invest in property is with a real estate investment trust (Reit). Rupert Hargreaves looks at five cheap options.

from Moneyweek RSS Feed https://moneyweek.com/investments/property/605441/invest-in-property-reits
via IFTTT

Microsoft: A technical rebound before a fall?

Following the results of the annual US CPI which reached 8.2%, we are seeing a rebound in all markets except bonds and the USDIndex (see below).

The return of risk appetite may be partly explained by the impetus given by financial institutions with their long-held positions, but also by the recent decisions taken by the British central bank (BOE). The core CPI, which excludes food and fuel prices, rose at the fastest pace since 1982, to 6.6% (from 6.3% previously), which proved that US inflation may not be as transitory as hoped.

We can see below that while the yield curve is still flat, it is fundamental to know that historically a flat yield curve implies a future recession.

It is clear that market participants have continued to anticipate a still aggressive rate hike from the Fed. According to CME Group 96.2% of participants expect a 75bp hike in November (see below).

Microsoft, the world’s leading software and cloud company, will release its third quarter 2022 results on 25 October ahead of the Fed meeting. The manufacturer is experiencing a slowdown in profit growth.

This morning the firm, which had already announced plans to cut jobs representing less than 1% of its total workforce, is the latest technology company to show signs of concern about future demand (see below).

source: zonebourse

To make matters worse its AR glasses are heading for a huge industrial fiasco, as the $22billion contract could be terminated by the US Army. Indeed, confronted with the reality of the field, the equipment is still very far from honouring its promises. In fact, the opposite is true. One of the testers quoted by Business Insider said: “This device would have gotten us killed”. In an email, an employee explained in black and white that the company was expecting “negative feedback” which would certainly “continue to be negative as the improvements have been minimal”.

Microsoft, one of the world’s fastest-growing companies over the past 20 years, has been hit by the global economic slowdown and its share price has fallen since the beginning of the year.

At first glance it seems that the future of the group is darkened, but out of 50 analysts according to zonebourse 32 are buying, 16 are accumulating and 2 are holding their shares.

source: zonebourse

Technical Analysis

Microsoft’s share price is currently at the $237 level. It is below its cloud, under its Kijun (green line) and above its Chikou Span (yellow line) as well as its trend line, and the Lagging Span (white line) is also reversed. This clearly indicates a bullish reversal attempt with the primary target being the Kijun (green line) which acts as resistance at $243.46; if it gives way price could then reach $250.27. If it fails, the price will test the trend line towards $231.14 (see below).

Click here to access our Economic Calendar

Kader Djellouli

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /526603/
via IFTTT

Stamp duty cuts will stay – how much will you save?

New chancellor announces a number of U-turns from last month’s calamitous mini-Budget, but stamp duty cuts will stay, saving buyers up to £6,250.

from Moneyweek RSS Feed https://moneyweek.com/personal-finance/tax/stamp-duty/605361/mini-budget-stamp-duty-cut
via IFTTT

Weekly Market Update: 17 October 2022

The new week begins, and the Dollar pulls back from 113.95 amid a risk-on mood.

Dollar

The Dollar begins the new week holding onto the gains made in the latter half of last week. Factors driving this continued strength are linked to higher-than-expected US CPI data that came out on Thursday, giving the FED the greenlight to continue its current regime of interest rate hikes. What the inflation data suggests is that the FED is now more likely to go for a 75-basis point rate hike at their next meeting. All the above prompted a sell-off in US stocks and the Dollar was the main beneficiary of the “safe-haven play”.

Technical Analysis (H4)

In terms of market structure, price is in an uptrend, printing higher-highs and higher-lows. Current price action is locked in a range between 109.95 – 114.55, with the bulls mostly in control of the dynamic, however, the potential of revisiting the 112.00 area is still in play before price heads to the top of the range again.

Euro

The Euro kicks off the week with renewed enthusiasm, clawing back some losses amid a risk-on mood in the market on Monday morning. Factors driving this pullback in price are mostly linked to dollar dynamics and rumours coming from a member of the executive board of the ECB, Phillip Lane, of a 75-basis point rate hike being advocated for at their next meeting.

Technical Analysis (H4)

In terms of market structure, price is in a downtrend, printing out lower-lows and lower-highs. Current price action is in a potential bearish continuation pattern (rising wedge) and will only be confirmed by an impulsive wave to the downside. If confirmed, sellers could drive price to the bottom of the range to test the 0.95 area.

Pound

Sterling begins the week regaining some of the losses incurred from the previous week. Factors driving this exuberance are keenly linked to a slightly weaker Dollar amid a risk-on mood in the markets at the beginning of the week. Though the Pound seems to be a beneficiary of this, the upward movement lacks any bullish conviction ahead of the new UK Chancellor’s speech centred around fiscal plans.

Technical Analysis (H4)

In terms of market structure, price is in a downtrend, printing lower-lows and lower-highs. Current price action is printing out a potential bearish continuation pattern (ascending channel), which will only be confirmed by an impulsive break of structure to the downside. If the aforementioned scenario is confirmed, sellers will drive price back down to revisit the 1.041 area.

Gold

Gold heads into the new week bouncing from a 13-day low to recover some of the losses seen in the preceding week. Factors driving this renewed buying interest go against the grain amid increasingly hawkish Central Bank rhetoric around the globe, and it seems this exuberance is linked to easing concerns around the UK economy as well as risk-on sentiment amid a slightly weaker Dollar at the beginning of the week.

Technical Analysis (H4)

In terms of market structure, Gold is still in a downtrend and continuing to print out subsequent bearish continuation patterns. The price action correctively approached the high of the range located around the $1 727 area in the form of a symmetrical triangle. The reversal pattern was confirmed by an impulsive break of structure which validated that sellers are in control of price and are likely to challenge the low of the range located around the $1 620 area.

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /526187/
via IFTTT

Could the government reverse the dividend tax cut?

Jeremy Hunt has reversed the cut to dividend tax announced in Kwasi Kwarteng’s mini-Budget – we explain what it means for investors.

from Moneyweek RSS Feed https://moneyweek.com/personal-finance/tax/605432/chancellor-backtrack-dividend-tax
via IFTTT