Market Moving Topics - Week 20

Last weeks roundup

Last week the markets moved up and down quite a lot, but ended with only minor changes compared to last friday.

Source: Yahoo Finance

Below is the chart that I will base my daily trading ideas of this week:

Source: TradingView, DJIA 14d, 1h

The resistance zone should provide a nice opportunity for a short with small SL, as well as the trendline on the downside could give me an opportunity to enter a long poisition. A breakthrough, with a following pullback and then continuation will let me change the trade direction.

1) Earnings reports

92% of the S&P companies have reported their earnings so far. According to Factset’s Earnings Insight report, 78% of the companies have reported a positive EPS surprise and 75% a positive revenue surpirse for Q1 2023.  For Q2 50 companies have issued negative and 37 positive guidance so far.

Disney (DIS) closed 8.7% lower on Thursday, after quarterly results, with missing EPS by a penny and Disney+ losing 4 million subscribers in the quarter. However Disney was able to lower its streaming losses to $659 million in Q2 despite the decline in subscribers.

Again I recommend the detailed S&P earnings reports statistics by factset, which can be found here: https://www.factset.com/earningsinsight

The earnings for the upcoming week:

2) Global economy, Inflation, GDP

The focus shifted from Inflation readings to the real economy. The global inflation is falling, although slower than everybody hoped for. Nevertheless unpleasant surprises did not materialize, which let market participants focus on other economic indicators again.

The US economy is more resiliant than expected and the Atlanta FED’s GDP tracker shows 1,1% for Q1 and stands at 2,7% for Q2 GDP. Labour markets remain very strong in the US and most other economies. Nominal wage gains lag behind price increases, but demand continues to stay strong. China’s reopened economy rebounds strongly. Energy and food markets disruptions caused by the war in the Ukraine are receding.

Instability in the banking sector seem to be the biggest threat these days, and the US debt ceiling stalemate seem to be the biggest threats for the markets these days.

All of these topics got covered by talks of the G-7 over the weekend. A short overview can be found here: CNBC Article