Ipek Ozkardeskaya
Swissquote Bank Ltd
Mood among investors is not cheery into the Federal Reserve’s (Fed) latest monetary policy decision due later today. And it’s understandable. The Fed must respond to three straight month jump in inflation and probably take a step back in its plans to cut the interest rates this year.
If the first few months of the year ended in tears for the Fed doves, the AI-related stocks lived up to very high expectations in the Q1. All the Maginficent 7 stocks that reported earnings so far – except from Tesla – surpassed high market expectations. Amazon posted the best beat among them, but the stock price rose less than 2% in the afterhours trading as a weak sales forecast for the current quarter tempered optimism regarding the Q1 results.
Elsewhere, Eurozone grew at the fastest pace in 18 months and exited recession in the Q1. But the EURUSD slipped to 1.0650 on broadly stronger USD, and risks are tilted to the downside at today’s FOMC announcement.
In energy, US crude cleared the 50-DMA and slipped below the $82pb level after the latest AI report posted an almost 5-mio-barrel build in US oil inventories last week and copper futures fell sharply as Fed hawk threaten the reflation trade.
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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