Sunday, 19 January 2020

Week to Jan 17th

Earnings open positively, All-time highs again, Phase 1 China deal signed

Monday January 13
Another all-time high for SPX and NDX, with tech shares leading as the January effect continues unabated, warmed by the easing of US/Iran tensions. USD was up in line, with only EUR outperforming which led to DAX being the only index in the red. The haven trio of Gold, bonds and JPY were of course down, and Oil, which benefits from Middle East tension dropped sharply by over $2.

Tuesday January 14
First off the block in earnings is JPM, who along with C beat earnings and revenue estimates, leading to a divergence with DJIA up but SPX and NDX flattish, taking a breather from the rally. A Turnaround Tuesday for the haven trio, now up, and Oil which recovered from the sharp drop. Otherwise only GBP was up in an overall flat day for the dollar as well.

Wednesday January 15
The mood cooled today with GS missing EPS substantially (4.69 vs 5.52) and BAC and Dow component UNH missing on revenue. SPX and NDX ended flat on the day. Nevertheless, JPY was flat in an otherwise weak day for the dollar, possibly selling the news, as the China Phase One deal was signed on schedule. Gold and Bonds were still up, and Oil was flat after a brief spike down.

Thursday January 16
The largest company to report today was MS, another beat, and along with the Retail Sales beat at 1330, US markets resumed their climb. There was a sharp spike up and down on DAX after the ECB minutes. The only red index was FTSE as a result of GBP strength, the only currency (other than NZD) up today. Gold, JPY and Bonds were down, and Oil was up, all in line with the equity moves.

Friday January 17
The euphoria continued into Friday, with all markets rising, and DAX breaking its closing Jan 18 high, and coming with 40 points of a new high. Oil rose as expected. Bonds were down in line, although notably Gold and JPY (meaning NKY didn’t join the party) were up. The latter was particularly notable as DXY hit a new 2020 high, and was up against all other currencies. There were no significant earnings today.

In this risk-on rally week, the top performing index was unsurprisingly NDX, with a second week of outperformance by FANGs. Meantime USDJPY was the best performer for a second week. Crypto rallied, in particular ETH, up nearly 18%.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold)

  • Four major rate decisions
  • Davos conference
  • Key NDX/tech earnings
  • PMI day on Friday

Monday January 20
US Markets are closed today for Martin Luther King day. Everywhere else is open as normal. Dow component AXP reports before the bell.

01:30 CNY PBoC Interest Rate Decision (p4.15%)
07:00 EUR Germany PPI

Tuesday January 21
Earnings season continues but the key releases NFLX and IBM come after the bell. The World Economic Forum in Davos, Switzerland starts today and runs for the whole week. President Trump will be there, along with TreasSec Mnuchin. Today is the end of the self-imposed deadline for a solution to the France/US spat on digital taxes.

03:00 JPY BoJ Rate Decision/Statement (e -0.1% hold)
06:00 JPY BoJ Presser
09:30 GBP Unemp/AHE (UnEmp e3.9% p3.8%)
10:00 EUR Germany ZEW Economic Sentiment (e4.3 p10.7)
14:30 NZD NZ GDT Milk Index

Wednesday January 22
Dow component JNJ report before the bell today, but the key focus is Canada, with the inflation release and rate decision 90 minutes later. There is also a rate decision in Malaysia.

13:30 USD Chicago Fed National Activity Index
13:30 CAD Canada CPI (YoY e 1.9% p1.9%)
14:00 USD Housing Price Index (MoM) (Nov)
15:00 USD Existing Home Sales (MoM) (Dec)
15:00 CAD BoC Rate Decision/Statement (e1.75% hold)
16:15 CAD BoC Presser
23:50 JPY Japan Imports/Exports/TB

Thursday January 23
Although the ECB is the most important news today, the most volatility will probably come after the bell when MSFT (10.78% of NDX) reports along with INTC, SBUX, TXN, WDC and ISRG. Together with MSFT this is 17% of NDX, the largest concentration in any one day of earnings season. Dow component TRV reports before the bell. There are also rate decisions in Norway and Indonesia. Markets are closed in Romania.

00:30 AUD Australia NFP/UnEmp (NFP e14k p39.9k)
12:45 EUR ECB Rate Decision/Statement (e0% hold)
13:30 EUR ECB Presser
13:30 USD US Jobless Claims
21:45 NZD NZ CPI (e2.2% p1.5%)
22:00 AUD Aus Commonwealth Bank Manuf PMI
23:30 JPY Japan National CPI
23:50 JPY BoJ MPC Minutes

Friday January 24
There are no significant earnings today, and so focus will be on PMIs, and possibly any Davos wrap-ups.. ECB Villeroy is the only CB speaker. Markets are closed in China today for the Chinese New Year and will not reopen until the following Friday. There is a rate decision in Nigeria.

08:30 EUR Germany Markit PMIs (Manuf e43.3 p43.7)
09:00 EUR Eurozone Markit PMIs (Composite e51 p50.9)
09:30 GBP UK Markit PMIs (Services e49.4 p50) 
13:30 CAD Canada Retail Sales (MoM e0.1% p-1.2%)
14:45 USD US Markit PMIs

This report is published every week as an email by - you can sign up to receive it here. This blog is supported solely by advertising, so if any of the ads interest you, please click on them. If you want notification when the blog is updated, please follow me on TwitterFacebookStocktwitsTradingView or Linkedin (all open in separate windows). Details of how I compile the report are here.

No comments:

Post a comment

Please leave a comment. They are moderated and spam (links to your site) will not be published.