Will earnings support stocks?

Frank Walbaum

Important news this week

Wed, 05th Aug 00:45 CET NZ Unemployment Rate.
Fri, 07th Aug 14:30 CET US NFP Report.
Fri, 07th Aug 14:30 CET CA Unemployment Rate.

Risk-on momentum builds as equities eye fresh highs

Risk appetite continues to improve, with US equities extending their recovery. The S&P 500 is approaching a major resistance zone around 7,650 points, and a successful breakout could trigger another leg higher. The Nasdaq is also moving higher, supported by resilient investor sentiment, although this week's corporate earnings will be key in determining whether the rally has enough momentum to continue. Strong results from major technology companies could provide the catalyst for fresh record highs.

The US Dollar remains broadly weak but is attempting to stabilize after recent losses. While downside momentum has slowed, there are few signs of a sustained recovery yet. In FX markets, the Japanese Yen is beginning to lose some of its recent strength, which could allow USDJPY to rebound if US yields stabilize. The Australian Dollar remains firm, reflecting the constructive tone in global markets.

Market talk

Cryptocurrency markets remain relatively quiet despite the positive equity backdrop. Bitcoin is trading sideways, while most major altcoins are also lacking momentum. One notable exception is Cardano (ADA), which continues to outperform and attract renewed buying interest. The key themes this week remain corporate earnings, US economic data, and whether the S&P 500 can confirm a breakout above resistance. If earnings continue to surprise to the upside, the current risk-on rally may have further room to run despite lingering uncertainty around the US Dollar.

Tendencies in the markets

Equities positive, USD stronger, crypto sideways, oil weak, Silver sideways, Gold sideways.'

Author

Frank Walbaum

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.