Daily Market Outlook, January 26, 2023

Daily Market Outlook, January 26, 2023 Asian Markets Back Online & In Buoyant Spirits With Hong Kong Scaling 7 Month HighsAsian markets are trading with a mixed tone, the standout exception is the Hong Kong market which has opened with a strong risk on posture, as the Hang Seng printed fresh seven month highs. The handover from Wall Street was mixed, however all the major indices staged significant intraday reversals from lows to close broadly unchanged on the session, overnight Tesla earnings provided support for bulls as earnings and revenues topped estimates, although margins contracted, Tesla shares were seen up 5.5% in post market trade. With no econ data of note for European trading, investor focus shifts to the US session, where US Q4 GDP is set to be released this afternoon. Markets expect the print to confirm a second successive quarter of growth reversing declines witnessed in the first half of 2022, softness seen in some December inputs suggests that growth may be lower than previously expected, however, growth is expected to confirm a 2.2-2.6% annualised uptick quarter over quarter. The Fed is deemed to still view this as a hotter than wanted levels of activity, the policy response to this level of growth will likely see the FOMC maintain a cautious tone at the Feb 1 meeting, with markets fully pricing a 0.25bps move, any upside surprise to the data would like see markets rapidly repricing a 50bps move, the data comes during the Fed black out period so markets wont get any response from Fed officials. Other US data of note comes in the form of weekly jobless claims, expected show a small uptick, signalling slight softness in the employment outlook, another round of housing data is expected to confirm continued pressure in the sector with new homes sales believed to cool further in December dropping from 640k to 617kMarkets-wise, European bourses have opened on the front foot, buoyed by Tesla earnings and the upbeat outlook provided by Tesla CEO Musk, robust earnings out of STMicroelectronics were well received,  helping cement the constructive opening to European trade with the FTSE & Eurostoxx in the green. US equity futures are also in positive territory as the Dollar remains pressured below the 102 level, supporting EUR and GBP. Crude continues to cling to the $80 handle with Gold closing on the 1950 target.Overnight News of NoteBitcoin Tops $23.7K In Wednesday Comeback - CoinDeskAsian Shares Scale Fresh 7-Month High As Hong Kong Trade ResumesChina Stocks Rally In Hong Kong As Holiday Spending RecoversBoJ Policymakers Divided On Wage, Inflation Outlook, Jan Opinions ShowsFear of BOJ Turning Hawkish Spurs 94% Jump In Shorter Bond SalesUS Economic Growth Set To Have Slowed In Fourth Quarter Of 2022Housing Demand Climbs As US Market Starts To Show Signs Of LifeUS And Germany To Send Main Battle Tanks To UkraineBoC’s Macklem Says He Is 'Not Even Thinking' Of Cutting RatesUK Business Confidence Drops To Lowest Since Financial CrisisDollar Near Eight-Month Low Ahead Of Central Bank MeetingsOil Edges Higher On Outlook For Chinese Demand And Weaker DollarChevron To Buy Back $75 Billion In Stock After Record ProfitsTesla Seeks To Boost Output Quickly As Profit Beats EstimatesIBM To Cut About 3,900 Workers, Still Hiring In ‘Higher Growth’ AreasDOT Probes Southwest Airlines Scheduling After Holiday-Travel MeltdownChina Stocks Rally In Hong Kong As Holiday Spending Recovers(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Options Expiration For the New York Cut 10am EST(BOLD expiries with a value of a Billion+ more magnetic if price is within the daily trading range)USDJPY 130.00USDCHF .9795Technical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 3985Primary support is 3885Primary objective is 4065Below 3840 opens 380020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Intraday Bullish Above Bearish below 1.0835Primary support  is 1.0750Primary objective is 1.10Below 1.0730 opens 1.061020 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2340Primary support  is 1.2180Primary objective 1.2460Below 1.2150  opens 1.210020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Intraday Bullish above Bearish Below 131.50Primary resistance is 132.30Primary objective is 125.00Above 133.00 opens 135.0020 Day VWAP bearish, 5 Day VWAP bullishAUDUSD Bias: Intraday Bullish Above Bearish below .7060Primary support is .6950Primary objective is .7250Below .6930 opens .687020 Day VWAP bullish, 5 Day bullish VWAPBTCUSD Intraday Bias: Bullish Above Bearish below 22500Primary support 20300Primary objective is 25000Below 20200 opens 1940020 Day VWAP bullish, 5 Day VWAP bullish

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Fan heater vs oil heater – which is cheaper?

Sales of portable heaters have soared, as households look to cut their energy costs. But which is better: a fan heater or an oil heater? We put them to the test to see which one comes out cheaper.

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The State Pension triple lock is doomed to fail

The State Pension triple lock guarantees an increase in the state pension every year, but this assumes government income grows every year as well, which it doesn't. That will lead to problems.

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What are the UK’s most expensive postcodes to buy a house in?

Data from estate agent comparison site GetAgent reveals the UK’s priciest and cheapest postcodes to buy a property in

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Ignore the doomsayers - things are looking bright for the bulls

Everywhere you look there seems to be bad news, but if past trends are anything to go by, 2023 could be a bumper year for equity returns says Dominic Frisby

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Market Spotlight: Tesla Earnings in Focus Today

Tesla Up NextAs US earnings season rolls on, focus today lands on Elon Musk and Tesla. On the back of Musk’s eventual takeover of Twitter, and all the controversy surrounding it, traders are keen to see how Musk’s primary business performed over the period. On the numbers front, Wall Street is looking for an EPS of $1.12 on revenues of $24.66 billion. This would mark a firm increase on the prior quarter and the eighth consecutive quarter of earnings growth for Tesla.Musk in Court Musk is currently on trial facing charges of fraud over a tweet put out in 2018 where Musk claimed he had enough funding to take Tesla private. Shares in Tesla surged on the back of the communication form Musk only to reverse sharply weeks later when Musk said ‘the deal’ was no longer going ahead. This is the latest controversy for Musk who was recently forced to make good on his takeover bid for Twitter to avoid further legal action.Improving 2023 Outlook Still, ahead of the group’s Q4 earnings today, analyst expectations for Tesla are firmly bullish. The negative factors which have weighed on the company over the last six months have been thoroughly reflected in price and now with the US interest rate outlook shifting materially and China reopening, the outlook for 2023 has improved considerably which makes Tesla a good candidate for a buy and hold through the year. Tesla has slashed vehicle prices recently on two key models which should help feed into better demand this year while the company will also benefit from reductions in prices of key commodities used in its manufacturing process.Technical ViewsTeslaThe decline in Tesla from summer 2022 highs has been framed by a clearly mapped bear channel. However, after stalling into a test of support at 108.24, Tesla shares have since turned higher and are now attempting to break out above the bear channel. The key level to watch will be the 170.22 region, a break of which will turn the near-term outlook firmly bullish with 207.71 the next target for bulls.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-tesla-earnings-in-focus-today"
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Aussie Soars As CPI Hits 33-year Highs

Q4 Inflation Spikes HigherThe Australian Dollar is seeing a flood of demand today on the back of the latest CPI figures, released overnight. Aussie inflation was seen spiking back up to 1.9%, quarter-on-quarter, up from 1.8% prior and above the 1.6% the market was looking for. The year-on-year figure was seen rising back up to 8.4%, a more than 1% jump from the prior 7.3% reading. The Q4 inflation reading marked its highest level since January 1980, driven by increases in transport costs, food prices and new dwelling construction costs.RBA ConcernsIn all, these inflation readings paint a worrying picture for the RBA. On the monthly figure, after flattening out for two months, prices have started to lift again. While there are certain factors recently which might have contributed to a temporary spike in inflation (bad weather, supply issues), the quarterly reading is worrying and suggests that the RBA still has further to go with its tightening program. The bank was among the first to pivot on rates last year and there is some concern now that the bank might have slowed the pace of tightening too early and will now need to play catch up to bring inflation down again.Holiday Costs See Big JumpLooking at the breakdown of the data there are some interesting points indeed. Holiday prices, which spike 11% on the prior month in December 2021 were seen spiking 27% in December 2022. Recreation costs were also seen jumping more than 10% on the prior month. These marked the two biggest cost increases. Given that December is a key holiday time in Australia, there is some credence to viewing these increases as transitory cost jumps which will likely flatten out now.AUD Well Bid Following DataHowever, the market reaction is key here. Aussie government bond yields have spiked on the back of the release. AUD too has been higher across the board, reflecting traders’ expectations that the RBA will either push ahead with a larger hike at the February meeting or signal that its tightening program will need to run longer than forecast. In both cases, AUD looks likely to remain well supported moving forward as the market re-prices the Aussie rate-path for the year ahead.Technical ViewsAUDUSDThe recent retest of the .6857 level has seen the Aussie turning higher again with price now having broken through initial 2023 highs to test the .7130 level. With momentum studies firmly bullish here and with the retail market heavily short, AUDUSD has room to move up to .7287 next.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/aussie-soars-as-cpi-hits-33-year-highs"
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Weak UK PMI data points to further Pound weakness

Incoming data on the EU economy roughly correspond to the thesis put forward by the market that the EU bloc will be able to dodge a recession. The PMI index from S&P Global climbed into the positive zone in January, amounting to 50.2 points against the forecast of 49.8 points. Positive MoM dynamics are being observed for the first time since June last year.A number of factors contributed to the optimism, from a faster slowdown in inflation and improved supply chains to mild weather that helped the EU avoid an energy crisis.Activity indices in the EU's two largest economies, France and Germany, remained at levels below 50 points, but there was a surprising improvement in the service sector in Germany and in the manufacturing sector in France.The ECB has already raised rates by 2.5% and is expected to make another 50bp hike next week. What happens after is unclear: some Governing Council officials suggest it may be appropriate to slow down the pace of tightening, others continue to insist on the need for significant increases. The hawkish ECB case in 2023 finds its justification mainly in a strong labor market: employment continued to rise in December, supporting high wage growth, which usually generates the lion's share of domestic inflation.Unlike the EU, the situation in the UK is less rosy. The S&P Global PMI index for the British economy dived deeper into the recession zone, to 47.8 points in January against 49 points in December. This means that the rate of deterioration in activity has been accelerating this month:The negative momentum prevailed in the services sector, but manufacturers also reported that output declined in January at the fastest pace since the start of the pandemic. The pound fell by 0.6% after the release of the index for January. Market participants are beginning to price in the idea that the BoE will be forced to delay the moment for the tightening cycle. Traders are looking for another 50 bp hike, according to the current valuation in February and by 25 bp in March. Additional pressure on the pound was also exerted by the publication of data on the UK budget deficit. It swelled by £27.4bn from a forecast of £17.3bn, an outcome that calls into question fiscal stimulus hopes, raising the risk of a UK recession in 2023.From a technical point of view, GBPUSD has broken through the lower limit of the short-term range of 1.231 - 1.23, and now the next sellers' target is likely to be 1.2250. In the event that the price encounters weak resistance, there will be no potential bounce to 1.23 (which will already be a resistance zone) and the price will continue to move towards the main support at 1.22, as shown in the chart below:

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7 ways to reduce your inheritance tax bill

The inheritance tax threshold cap has been extended until 2028, which will result in higher tax bills for many - we look at how to keep you inheritance tax bill to a minimum.

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House prices could fall 30%. Should investors be worried about a repeat of 2008?

Some analysts are predicting that house prices could fall as much as 30%, which, when compared to the fact that prices have jumped 28% since April 2019 doesn’t seem too unrealistic. But could this cause another financial crisis?

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Market Spotlight: EZ Service Sector Back in Growth While UK Slumps Further

UK Service Sector in Trouble The latest set of PMI readings for the eurozone and the UK today highlighted some clear divergence with regards to economic performance between the two. In the eurozone, the services sector was seen moving back into positive territory last month, printing 50.7, up from 47.8 in November. This marked a strong increase and was above market forecasts for a 50 reading. However, in the UK, the services sector was seen falling further into contractionary territory at 48 from 49.9 previous, well below the 49.6 the market was looking for.Factory Sector Slightly Better Factory sector readings were similar. While in the UK there was a small improvement, at 46,7 from 45.3 prior the sector was still in negative growth territory last month. In the eurozone, the factory sector remained in negative territory also though at 48.8, up from 47.8 prior, was a little stronger than in the UK.Ongoing IssuesMuch has been made of the UK’s post-Brexit struggle and these latest business survey results show that these difficulties have not yet passed. While the BOE governor recently offered reassurance that the UK economy had turned a corner, there is still plenty of downside risk for the UK as Brexit, difficulties, covid disruption and ongoing industrial action continue to thwart many business sectors at a time when rates and inflation are both still elevated.Technical ViewsEURGBPThe latest test of .8869 saw the pair turning lower again. However, with the correction subsequently finding support at the .8719 level, price is now moving higher once more. For now, while price holds above the bullish trend line the focus is on a continuation higher and a break of the .8869 level opening the way for a move back up through last year’s highs.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-ez-service-sector-back-in-growth-while-uk-slumps-further"
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Market Spotlight: Microsoft Ramping Up Its AI Investment

Microsoft Announces 'Third Phase Investment In Open AI Shares in US tech giant Microsoft are trading around 1% higher ahead of the US open today. The move comes on the back of yesterday’s announcement that the company will strengthen its partnership with ChatGPT maker Open AI via a new multibillion dollar investment deal. While the exact figure is yet to be disclosed, there have been reports of a $10 billion sum.  The Microsoft blogost announcing the next stage of its involvement with Open AI, Microsoft outlined plans for additional supercomputer development as well as greater cloud-computing support for Open AI.Microsoft’s desire to become heavily involved with this latest cutting edge technology represents a big opportunity for investors. With AI now seen as one of the fastest growth areas in tech, Microsoft’s early backing of a Open AI could pay big dividends down the line especially judging by the popularity of ChatGPT which is seeing massive cross-sector application.Earnings Due Today Looking ahead today, Microsoft is due to report Q4 earnings with Wall Street looking for EPS of $2.29 on revenues of $52.99 billion. While there are some warnings that the company might see a smaller profit margin, results in this area should keep the stock well bid especially on the back of this news.Technical ViewsMicrosoftFollowing the latest test of the 218.95 level, the stock has since turned higher again and is now testing the 244.95 region. This is a key pivot for price, marking the midway point of the range between current lows and the 265.55 level. If price can break above here, focus turns to a test of the bearish trend line and the 265.55 level above.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-microsoft-ramping-up-its-ai-investment"
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Daily Market Outlook, January 24, 2023

Daily Market Outlook, January 24, 2023 Tech Rally on Wall Street Sees Nikkei Back Above 27KThe Nikkei (the only major Asian market open during the lunar holiday week) managed to shake off a third successive monthly decline in manufacturing data to reclaim the pivotal 27k level, as markets were buoyed by another impressive led Tech rally, Tesla gaining nearly 8% on the day, as the Tech heavy Nasdaq100 was up over 2% trading above 11800. European bourses are set to follow suit with futures suggesting a positive open.In the UK data out this morning confirmed a year over year doubling in the public purse borrowing rising to £26.6Bln in December, however, it is thought that the 12 month deficit may still come in below forecasts, January;s data will be a key input to the final outcome as the January figure will contain HMRC tax revenues for the year. Datawise focus is on PMI releases, with both the manufacturing services data expected to remain in contractionary territory, printing below the pivotal 50 level, there is a chance that the services data may offer some modest growth driven by seasonal and world cup spending. The FTSE is currently the only European market currently trading in the red, driven by AstraZeneca and Glencore declines. In the Eurozone PMI data is also expected to see meagre gains on the services side of the ledger vehicle manufacturing is thought to lag remaining sub 50 suggesting contraction in the sector continues, however, regional data just released by France saw a surprise gain in the manufacturing sector, printing 50.6. ECB Chief Lagarde is due to speak again today. With the BoE and FOMC moving into their respective black out periods, given the proximity of their policy announcements) Lagarde is expected to once again reiterate her hawkish stance.The US data slate is also dominated by PMI data due later today, with both readings believed to remain in contractionary territory, key for US investors will be whether next weeks ISM data confirms the PMI prints as the ISM releases tend to be tracked more closely by US investorsMarkets-wise, in the UK BHP have signed a partnership deal with Munduro Capital to assess the feasibility of copper mining in Serbia. The National Grid are offering discounts to customers who agree to use less electricity during peak consumption hours as a means to avoid black out periods during excessive consumption periods. After the close of US trading today tech stalwart Microsoft is set to announce earnings, given the recent rise in MSFT share price and the broader gains in the tech sector, investors will be looking for decent forward guidance to maintain the rally, any meaningful downgrades on outlook would see investors paring risk appetite ahead of Tesla earnings due tomorrow. Overnight News of NoteAsian Shares Climb In The Wake Of Tech-Stock Fuelled GainsBank Of Japan Eases Bond Market Strains With Loans To BanksJapan's Factory Activity Extends Declines For Third Straight MonthAustralian Business Conditions Fall For A Third Straight MonthPresident Biden Set To Hammer GOP National Sales TaxECB Policymakers Spar On Rate Outlook Beyond Feb HikeDollar In Doldrums As Euro Near 9-Month Peak, Yen BouncesOil Steadies As Traders Look To China To Deliver Demand BoostUS Weighs Cancellation Of Next SPR Sale – Energy IntelAsian Shares Climb In The Wake Of Tech-Stock Fuelled GainsDOJ Poised To Sue Google Over Digital Ad Market DominanceEU Lawmakers To Vote On Tighter Crypto, ESG Rules For Banks(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Options Expiration For the New York Cut 10am EST(BOLD expiries with  a value of a Billion+more magnetic if price is within the daily trading range)USDJPY 131.00AUDUSD 0.7000USDCAD 1.3450Technical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 3995Primary support is 3869Primary objective is 4055Below 3840 opens 380020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Intraday Bullish Above Bearish below 1.0835Primary support  is 1.0750Primary objective is 1.10Below 1.0730 opens 1.061020 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2320Primary support  is 1.2250Primary objective 1.2460Below 1.2240  opens 1.218520 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Intraday Bullish above Bearish Below 131.50Primary resistance is 132.30Primary objective is 125.00Above 133.00 opens 135.0020 Day VWAP bearish, 5 Day VWAP bullishAUDUSD Bias: Intraday Bullish Above Bearish below .7060Primary resistance is .7060Primary objective is .6939Above .7060 opens .711020 Day VWAP bullish, 5 Day VWAP bullishBTCUSD Bias: Bullish Above Bearish below 22300Primary support 21600Primary objective is 23700Below 21500 opens 2070020 Day VWAP bullish, 5 Day VWAP bullish

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-january-24-2023"
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When will UK inflation fall back to the BoE’s target?

Inflation has started to slow, but it could remain high for some time as underlying pressures build

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