EURUSD fell only marginally by -0.09% on Friday, having received support from a sharp rise in the 10-year BUND yield to 2.08% and stronger-than-expected German GDP and Eurozone CPI reports. Germany’s Q3 GDP of +0.3% q/q was stronger than expectations for a -0.2% decline.
Last week, the ECB raised interest rates by 75 bp as expected, bringing the overnight rate to 2%. This is the highest level since 2009. The central bank removed the phrase, that it will raise rates in the “next few meetings”. Instead, the ECB said it will raise rates on a meeting-by-meeting basis, although that may mean further rate hikes, depending on inflation and the evolving economy.
Inflation has reached double digits and will remain a priority for the ECB. The Eurozone released its inflation report on Monday, which showed that inflation rose to 10.7% in September, and is expected to 11.0% in October, according to some analysts. Core inflation is also ticked higher to 5.0%. The Eurozone will also release its October Final PMI, which is projected to show contraction, with a reading below the 50.0 level. Manufacturing will be released on Wednesday and Services on Friday. Manufacturing is expected at 46.6 and Services at 48.2, confirming the preliminary estimates.
Technical Analysis
Last week, EURUSD continued its 0.9535 rebound and fell back, after reaching 1.0093. Early this week, the initial bias remains neutral, as long as the minor support level at 0.9847 holds. Further upside is possible, on a break of 1.0093 to test the September high at 1.0197, and a further move above the 1.0197 level is likely to test the 38.2% retracement level at 1.0283 from the 1.1494-0.9535 pullback. On the other hand, a move below 0.9848 would return the bias to the downside for 0.9705 support.
EURUSD H4
The candle pattern on the monthly time frame shows the movement of October is still within the range (high – low) of September. This means that there is no confirmation of a trend change, although the attempt on the weekly time frame is clearly visible. Meanwhile on the daily time frame, the candlestick position is above the 52-day exponential moving average though this also does not mean that a trend change is imminent, after the supposedly dovish ECB conference last week. On the other hand, on the 4-hour period there has definitely been a breakout of the bearish structure, as the price moved strongly to break the parity level to the upside, before reversing back to the downside of parity. This shows that the parity level is still at an intermediate level, before the market shows its true direction. And it looks like the market is waiting for a trigger, whether it comes from the FOMC on Wednesday and/or the NFP on Friday.
Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
Uber Technologies (formerly UberCab) is an American company founded in 2009 that operates as a technology platform for the mobility of people and things. Its services are divided into three main segments, namely mobility (connecting consumers with drivers who offer a variety of vehicles), delivery (searching and discovering local restaurants, ordering and delivering or picking up meals at restaurants, and grocery, alcohol and convenience store and other merchandise delivery) and freight (connecting carriers to shippers by leveraging proprietary technology, brand awareness and industry-changing experience). The company will report its third-quarter 2022 earnings results on Tuesday , November 1, before the market opens.
Fig 1：Uber’s annual revenue by market segment in billions of dollars. Source： Business of Apps
Uber Technologies’ sales revenue fell -21% year over year in 2020, heavily impacted by the coronavirus pandemic. Until the first half of 2021, when the lockdown restrictions were in place, most of the company’s revenue came from the delivery segment. By the end of 2021, the annual revenue of the distribution segment was 8.3 billion (4.8 billion in 2020), the mobile segment 7.5 billion (7.9 billion in 2020), the freight segment 2.1 billion (900 million in 2020) and others 400 million (1.3 billion in 2020).
FIG 2：Uber Technologies reported sales versus analyst forecasts. Source ： CNN Business
By the end of 2021, the company reported sales of $17.5 billion, up 57.66% from a year earlier. In the first half of 2022, sales beat market expectations at $6.9 billion and $8.1 billion, respectively. Analysts’ forecasts for third-quarter sales 2022 remain unchanged at $8.1 billion.
Fig 3：Uber Technologies’ reported EPS versus analyst forecasts. Source： CNN Business
Conversely, full-year 2021 earnings per share were reported at -$0.29. This was the third consecutive year the company reported negative EPS (-$3.87 in 2020 and -$6.81 in 2019). The situation did not improve in the first half of 2022, with -$3.04 and -1.33 reported in Q1 and Q2, respectively. Management said the poor performance was mainly related to equity investment losses. Therefore, the focus will be on how the company’s earnings per share perform in the third quarter. Consensus estimates are at -$0.18, and an outcome at or above that figure would be a positive boost to sentiment and thus a positive boost to the company’s share price, and vice versa.
Recently, Uber Technologies announced the launch of its “Journey Ads” service, which allows marketers to place ads within the Uber app. Management believes that such a move could help support pricing that is more attractive to riders. However, the downside could be the risk of angering customers.
The future of the ride-sharing industry looks bright. According to data, by 2026, the global carpooling market is expected to reach US $185.1 billion, with a compound annual growth rate of 16.6% from 2021.
Fig 5：Uber total bookings and its segments. Source： WallStreetZen
Uber’s total bookings has remained positive. It hit $29.08 billion in the second quarter of 2022, up more than 180% from its trough two years ago. Since the economy reopened, gross bookings for Uber rides have rebounded sharply, nearly surpassing gross bookings for restaurants by the second quarter of 2022 ($13.36 billion vs.$13.88 billion)..
Fig 6：Uber users and middle-class wealth decline by income bracket. Source： WallStreetZen, Bloomberg
Statistics show that Uber users are mainly composed of middle-income groups (44%). In the macroeconomic context, the middle class has been the most adversely affected since the central bank announced monetary tightening in response to rising inflation, and according to a survey, this could mean these individuals may end up spending less in a number of ways, including eating out less/delivery less, canceling/postponing travel plans, spending less on groceries, and more. This could also indirectly affect Uber.
Technical Analysis:
#UBER (UBER.s) shares are trading within a descending channel with highs and lows of $64.04 (Feb 2021) and $19.89 (June 2022). As of last week’s close, #UBER’s share price was still below analysts’ lowest estimate ($32). The top line of the descending channel and $30.31 (FR 23.6%) are the nearest resistance levels. If the bullish breakout succeeds, the asset could continue to rise to $33.50 and then $36.76 (FR 38.2%). Instead, the nearest support is at$24.50. A close below that level could encourage more selling pressure down to $19.89 and the March 2020 low of $13.70.
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.
USDIndex – advanced a bit this morning but held below 111.00ahead of the Fed this week. Treasuries were hammered after still hot inflation numbers and tight labor market conditions spooked bond holders and sparked heavy profit taking at week’s end. This morning, China’s factory activity unexpectedly fell in October, JPY Retail Sales beat but Consumer confidence and Housing starts missed significantly. German retail sales rose 0.9% m/m in September.
EUR – hoovering around parity 1.0000.
JPY – further pressure at 147.90 after BOJ decision to keep ultra-low interest rates on Friday and dissapointing retail sales this morning;
GBP – reverts from 1.1600 (75 bp increases from BoE on Thursday?)
Stocks -Steadied after closed largerly in green last week. Guidance from mega tech, including Amazon, Microsoft, and Meta, earnings have generally beaten, albeit a very low bar. Chevron & Exxon beat expectations. Better revenue and profit news from Apple (up 7.6% Friday, its biggest daily jump since July 2020) helped boost investor sentiment today, while hopes the FOMC will back off aggressive rate hikes after the well expected 75 bps on Wednesday supported too.
US30 had its 4th consecutive week higher and all markets closed +2.5%. 263 companied of S&P500 have reported, 73% have beat expectations. Today though US futures are in red.
USOil – at $86.80, struggling to held above the 20- & 50-DMA.
Gold – set for a new drift? Currently back to $1642 area
BTC –back to $20.4k now.
Reuters – Russia’s backtrack from a UN-brokered deal to export Black Sea grains is likely to hit shipments to import-dependent countries, deepening a global food crisis and sparking gains in prices. Hundreds of thousands of tonnes of wheat booked for delivery to Africa and the Middle East are at risk following Russia’s withdrawal, while Ukrainian corn exports to Europe will get knocked lower.
Today– The new month and NFP will add to the mix this week. Today European prelim. GDP for Q3 and tomorrow morning RBA Rate decision and Statement. EARNINGS – Aflac,Stryker, Williams Companiesetc.
Biggest FX Mover @ (06:30 GMT) NZDJPY (+0.98%) Extended above 86 area as antipodean are on track for an October ahead of RBA tomorrow. 1-hour MAs & RSI & Stochastics flattened but MACD histogram & signal line kept well above 0. H1 ATR 0.179, Daily ATR 1.299.
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.
Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 200k October nonfarm payroll increase is anticipated, after gains of 263k in September, 315k in August, and 537k in July. Payroll growth should slow into year-end as mortgage rates rise and recession fears mount. The October climb in initial and continuing claims suggests some downside payroll risk for the month. The jobless rate should hold steady at the 3.5% cycle-low. Hours-worked are assumed to be flat after the 0.2% September rise, while the workweek holds at 34.5 for a fifth month. Average hourly earnings are assumed to rise 0.3%, the same as in September and August, while the y/y wage gain should dip to 4.7% from 5.0%. The ensuing strength in wage gains has allowed continued robust y/y increases into 2022, though the return of low-paid workers to the workforce is likely restraining wage increases.
Labour Market Data (CAD, GMT 12:30) – Canada’s employment change is anticipated to grow by 20k in October from -21.1k last month.
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.
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ECB hiked rates by another 75 bp – as expected. The bank flags further tightening ahead, but dropped the reference on “next several meetings”. That backs our view that the ECB is set on another hike in December, but will then take stock and the battle between hawks and doves will become more heated, as Lagarde flags the shift to decisions to be taken at a meeting-by-meeting basis. The ECB decided to change the terms of the TLTRO loans after all, with the rate from November 23 to maturity the average key rate. At the same time, the bank offered more opportunities for early repayment of the loans. The renumeration of minimum reserves will be at the deposit rate now. EURUSD is holding just above parity for now, as markets digest the initial announcement and wait for Lagarde’s presser.
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.
USDIndex – Slumped to under 110.00to109.40.US new home sales dropped -10.9% in September, in line with expectations and BOC surprised markets with only a 50bp interest rate hike to 3.75%.Macklem had suggested more concern over risks from higher inflation following the rise in the latest CPI data. However, it will continue to tighten, sees terminal rate at 4.5%, there is still “excess demand,” in the economy and that a technical recession is just as likely as modest growth, cutting 2022 growth forecast to 3.3% from 3.5%, 2023 to 0.9% from 1.8%, and 2% in 2024 from 2.4%.
Stocks sank (NASDAQ+2.25%) underperformed. Poor earnings and guidance from big tech (Google plunged -9%), and then Meta (-5.6%) missed and sank -20% after hours, wiping $67 billion off its market cap. Concerns over Apple and Amazon today.Asian markets rose initially but closed/ are closing mixed. (Nikkei –0.32%, Hang Seng 1.60%),European FUTS also mixed. AUD imports prices 3 x higher than expected, but German GfK Consumer Climate not as bad as expected.
EUR – leaped over parity 1.0000,land topped at1.0093 earlier,now ahead of the ECB at 12:15 GMT.
JPY – Cooled again, under 146.00 to 145.40 lows, ahead of the BOJ rate announcement later tomorrow. Friday’s pre-BOJ intervention peak took the pair to 152.00.
GBP – Sterling rallied again (another 150+ pips) yesterday to test 1.1600 and trades to 1.1645 today. UK’s mid-term Fiscal statement was postponed from Monday to Nov. 17 as Gilts continue to recover with tax rises and spending cuts expected.
Stocks – Wall Street were mixed with big moves for Tech stocks in particular. US500 closed -28.5 (-0.74%) at 3830, FUTS trades at 3850 now.
USOil – rallied from $84.35 lows again yesterday to test $88.40 after inventories showed draw downs, back to $87.60 now. IEA Oil Inventories – big build 2.588M vs 1.029M.
Gold – weaker USD helped a rally to $1675, yesterday before moving back to $1662 now.
BTC – rallied again to test $21.0k, back to $20.7k now and holdingthe important $20k.
Today–ECB Announcement & President Lagarde’s PC, US Quarterly PCE Advance, GDP Advance and Durable Goods.EARNINGS – Amazon, Apple, Intel, Caterpillar, McDonalds, Gilead, AB InBev, Credit Suisse, (in-line), Deutsche Lufthansa, and more.
Biggest FX Mover @ (06:30 GMT) GBPJPY (-0.71%) Tank from over 170.00 yesterday to 168.80 now. MAs aligned lower, MACD histogram & signal line negative & falling, RSI 28.05, OS but still falling, H1 ATR 0.299, Daily ATR 2.762.
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.
The energy industry has made big profits this year, with oil companies ExxonMobil, Chevron and Shell each generating more than $45 billion in revenue in the second quarter. However, the outlook for the future is not so bright, and the energy sector has lowered their earnings expectations due to the deteriorating macroeconomic outlook. According to FactSet, that downward revision of earnings forecasts for companies in the Energy sector has been a substantial contributor to the decline in the overall earnings growth rate for the S&P 500.
However, the Energy sector is still expected to report the highest revenue growth of the eleven sectors, at 116.4%. Year-on-year higher oil prices contributed to an increase in earnings for the sector, as the average oil price in Q3 2022 was at $91.43, or 30% above the Q3 average price last year which was around $70.52.
There have been calls from Biden for US energy companies to leverage their profits into new production, rather than giving more money to shareholders, due to geo-political considerations. In the past, big oil companies have invested in new production during boom times, but those decisions often boomerang when prices drop. Before the war in Eastern Europe broke out, companies were also under pressure to limit spending on fossil fuels and focus on renewable energy.
Meanwhile, ChevronCorp., which has a market cap of $338,890,689,347, is expected to report earnings on Friday, October 28, 2022 before the market open. The report is for the fiscal quarter ending Sep 2022. Reported second quarter results, which topped consensus on still strong commodity prices and product margins, pushed Chevron’s two segments to a better-than-expected bottom line. Chevron has reported adjusted earnings per share of $5.82, and Revenue of $68.8 billion also reached 23.2% above consensus. The two segments are the upstream division (exploration and production) and the downstream business, namely refining crude oil into fuels such as gasoline and diesel oil.
Chevron is expected to benefit from the realized power of oil and natural gas. As a reflection of this price increase, the Zacks third-quarter average selling price for crude was pegged at $89 per barrel, up significantly from a year earlier, when the company earned $58 in the United States and $68 overseas. Furthermore, the Zacks Consensus Estimate for the third-quarter average selling price for natural gas is pegged at $10.32 per thousand cubic feet compared to $3.25 (US) and $6.28 (international) in the same period in 2021.
The increase in realization from year to year is likely to have supported Chevron’s upstream segment’s revenue and cash flow. In fact, for the quarter to be reported, the Zacks Consensus Forecast for the upstream unit was pegged at a profit of $8 billion, representing a huge jump from the previous year’s quarterly revenue of $5.1 billion.
Chevron is also expected to have reaped the rewards of a better macro-environment in the downstream (or refining) unit. With the post-pandemic demand recovery driving margins higher, the company will see segment revenue soar year over year. Echoing Chevron’s healthy downstream dynamics, the Zacks Consensus Estimate for reported quarterly earnings is projected to be $2.4 billion. The figure represents a remarkable increase from the $1.3 billion profit reported in the last year’s quarter. The price of Chevron is at rank #3 (hold) according to Zacks. It’s safe to say Chevron will benefit from a surge in crude oil and natural gas prices for the reported quarter.
The Zacks Consensus forecast for third-quarter earnings is pegged at $5.10 per share, representing a 72.3% jump on the previous year’s quarterly reported figure of $2.96. For quarterly sales, the consensus value of $59 billion represents a 31.9% increase from the amount reported in the previous year’s quarter.
In addition to Zacks, Jefferies Financial Group analyst L. Byrne anticipates that the oil and gas company will earn $4.94 per share for the third quarter with a “hold” rating on the stock. The consensus estimate for Chevron’s current full-year earnings is $17.84 per share.
Technical Overview
#Chevron continued its 140.46 rebound by breaking through resistance 166.81 on Wednesday last week and trading at around 174.00 on Tuesday, October 25, 2022. During October Chevron has gained over 17% erasing all of its Q3 losses. Technically the Chevron price is still likely to rise to test the top of 182.38 which formed last June, or about 4.5% of the current price. The RSI indicator is approaching the overbought level, while the MACD has not given any indication of weakening momentum.
On the downside, a move below the support at 166.81 would spoil the outlook with support seen at 2 price levels, at 158.93 and 153.97. But overall, the bullish trend still dominates the price movement, as seen from the movement above the 26 MA average, both in the daily and weekly periods. A break above the 182.38 peak would confirm the continuation of the bullish trend for the projected FE 138.2% (187.85) of the drawdown of 132.52–166.81 and 140.46.
https://www.tipranks.com/stocks/cvx/forecast
Citing Tipranks, based on 16 Wall Street analysts who offered 12-month price targets for Chevron in the last 3 months, the average price target is $177.31 with a forecast high of $202.00 and a forecast low of $145.00. The average price target represents a 1.84% change from the last price of $174.10.
Reporting from MarketBeat, several other research analysts have recently also considered Chevron. Truist Financial lowered their price target from $170.00 to $166.00 and assigned a “hold” rating in research notes on Tuesday, July 19. Goldman Sachs Group is rated “neutral” and set a target price of $172.00 in a research report on Thursday, August 4. Wells Fargo & Company raised their target price from $118.00 to $185.00 and gave the company an “overloaded” rating in a research report on Monday, August 1. According to MarketBeat.com, Chevron have a consensus rating of “Medium Buys” and an average target price of $169.25.
Market Analyst – HF Educational Office – Indonesia
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.
