Mati Greenspan, Senior Market Analyst at FX broker eToro, has provided his daily commentary on traditional and crypto markets for August 16, 2019. The text below is an excerpt and does not contain the full analysis.
I’m Adam. As Mati mentioned yesterday I will be taking over the ‘daily’ while he is on vacation. I am an analyst based in eToro’s London office and have been working in markets for the past 5 years. Please do share any feedback you have. It is great to see the engagement Mati has with his readers and we’d love to see that continue.
- Bond Markets Suggest Imminent Recession: With the 10-year Treasury yield breaking below the 2 year Treasury rate, likely fueled by the U.S.-China trade war, all signs point towards a recession.
- Nvidia and Walmart Post Strong Q2 Results: The graphics chip maker and retail giant posted Q2 results exceeding expectations.
- Bitcoin Falls Below $10 Following Chinese Dump: Fraudulent Chinese investment scheme dubbed PlusToken is supposedly to blame for the price dip following an almost $3 billion sell-off
Please note: All data, figures & graphs are valid as of August 16th. All trading carries risk. Only risk capital you can afford to lose.
Markets remain concerned about the possibility of a recession. The volatile reaction was triggered by an ‘inverted yield curve’ development in the bond markets, which many investors consider a forecasting tool for recessions. This occurrence is an indication that market participants are concerned about the state of the economy and has preceded every recession in the past.
US equity markets were supported yesterday by the strong reading on retail sales which bolstered confidence in the American consumer. US Treasuries also erased some gains. US retail trade jumped 0.7 percent from the previous month, following a revised 0.3 percent increase in June and easily beating market expectations of 0.3 percent, boosted by purchases of a variety of goods.
The Day Ahead
This afternoon (13.30 BST) the US July housing starts (number of privately owned new houses) and building permits data is due. Then at 15.00 BST we have the preliminary August University of Michigan consumer sentiment survey which is expected to come in at 97.2 from previously published 98.4 figure. Additionally, Baker Hughes’ US oil rig count is due at 18.00 BST and OPEC is scheduled to release its monthly oil market report.
Walmart – the retail giant reported an adjusted quarterly profit of $1.27 per share, 5 cents a share above estimates. Revenue also beat forecasts. U.S. comparable-store sales rose 2.8%, better than the 2.4% consensus estimate of analysts surveyed by Refinitiv. Walmart also raised its full-year sales and earnings forecast.
Nvidia – The graphics chip maker posted Q2 results after the bell, which came in ahead of expectations. Earnings per share came in at $1.24 ahead of estimates of $1.15. Strength in the company’s gaming division buoyed numbers after a difficult year, which had seen revenues fall.
Retail sales data for the UK released by the National Statistics yesterday came in much better than expected at 3.3% year on year (July) against the 2.6% expectations. UK retail sales jumped unexpectedly in July, mainly helped by the growth in online spending. Consumer activity is continuously offering support to the British economy. The GBPUSD currency pair reacted positively to the data, rallying higher towards the psychologically important 1.2100 level. Any additional breakouts to the upside are initially capped by resistances at 1.2180 and 1.2200 levels. Support to the downside is at the multi year low of 1.2000.
Bitcoin dropped back below $10,000 for the first time since July. The broad-based selling has created the worst three days for Bitcoin since Nov 2018, and while immediate catalysts are unclear, a Chinese Ponzi scheme could be to blame according to zerohedge.com.
Bitcoin is retesting the psychologically important 10,000 level. Current price action appears supported by 9,400 and capped by 10,800 levels. Confirmed loss of the initial downside support at 9,400 and an end of day close lower could target additional downside supports at 9,030 followed by 8,745 levels. Alternatively, oversold bounce backs above the 10,800 resistance could change the outlook to bullish targeting additional upside resistances at 11,400 and 11,900.
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.
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Daily Market News: Nvidia and Walmart post strong Q2 results was first posted on August 16, 2019 at 5:15 pm.