Ipek Ozkardeskaya
Swissquote Bank Ltd
Market sentiment is mixed. There is a certain will to buy a dip in US indices, yet the aggressive hawkish Federal Reserve (Fed) pricing doesn’t allow the appetite to get restored. It results in hectic pricing as the US yields go up.
The sharp rise in US yields is the number one reason pushing the stock indices lower since the start of this year, and the major indices are much more vulnerable to interest rate hikes now than they were before, because the Big Tech has an increased weight in the indices, and they are vulnerable to rate hikes.
Limited risk appetite and mounting tensions between Ukraine and Russia support a rise in gold prices despite the rising US yields.
Ukraine-Russia tensions, combined with OPEC+ struggle to revive output are also giving an extra push to the oil bulls.
Strong earnings are the only hope for the equity bulls in the short-run. The bank earnings have been strong, but not perfect.
Netflix will be the first FAANG stock to reveal its Q4 results. The expectations are soft, while the tech stocks don’t have the luxury of deceiving their investors at an environment of rising Fed expectations, so a softer-than-expected set of results could further hammer the investor appetite.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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