STOCK PRICES AND NEWS


AMC stock should get short-term pop, but long term it is set to drop

AMC stock should get short-term pop, but long term it is set to drop

AMC closed up on Thursday, and Friday could see more gains for the meme stock favorite as investors look to close out positions and end the week positively. Friday is also option expiry time, and liquidity has been terrible. Net options expiry should be on the buy-side this time, and coupled with poor liquidity should help stock markets take a leg higher. 

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NASDAQ

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S&P 500

Latest S&P 500 Analysis


SPECIAL YEARLY FORECAST

S&P 500 Forecast (SPY) (SPX): Four reasons why the S&P 500 can power to 5,500 in 2022

S&P 500: Four reasons why the S&P 500 can power to 5,500 in 2022

Forecasting, like economics, is a dismal science, but occasionally one can reap the rewards of a carefully constructed argument. 2021 follows 2020 as a tumultuous year with some momentous events in the stock market. With less than a month to go, we can safely consign 2021 to one of the strongest years on record for stock market performance, and now we endeavour to forecast for 2022. Will it be another year of strong equity performance? Will inflation batter returns? Will Bitcoin blow up or takeover?



US EQUITY INDICES

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The old economy stocks are said to be represented by the Dow. The Dow tends to be the leading indicator for international investment.

While the Dow reflects the BIG money, S&P 500 reflects the broader view is the preferred gauge of equity markets due to its bread coverage of the market. Historically it has shown a negative correlation to the yen (even on an intraday basis). It is a market value-weighted index made up of the prices of 500 large stocks traded in the US market, covering about 75% of US equities.

Nasdaq Composite is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies. Since both U.S. and non-U.S. companies are listed on the NASDAQ stock market, the index is not exclusively a U.S. Index. The NASDAQ represents the speculative retail money.

Generally speaking, if the U.S. equity markets rise, they cause an increase in investors' risk appetite in which case foreign investment dollars will flock the U.S. equity market pumping the U.S. dollar higher.


EUROPEAN EQUITY INDICES

Germany DAX - Daily

UK FTSE 100 - Daily

The Deutscher Aktien Index, or DAX 30 for short, is the blue-chip market index for the Frankfurt Stock Exchange. It follows the top 30 German stocks on the electronic Xetra system that is used on the exchange. The DAX indices are all calculated using capitalization-weighted index using the total return Laspeyres index for calculations. 

Called the footsie, the Financial Times Stock Exchange 100 is a market capitalization-weighted index representing the top 100 blue-chip companies on the London Stock Exchange. The index is said to map more than 80% of the total capitalization in the United Kingdom. Stocks are free-float weighted to ensure that only the investable opportunity set is included within the index. 

The constituents of the index are revised every 3 months, based on market capitalization. For this reason, the FTSE 100 should not be assessed for any market breadth index, other than for the recent period for which the components have remained unchanged.


JAPANESE EQUITY INDICES

The Nikkei is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the Nihon Keizai Shimbun (Nikkei) newspaper since 1950. It is a price-weighted average (the unit is yen), and the components are reviewed once a year. This market is close correlated with US 10-Year Treasury notes. It's also useful to spot risk appetite and gauge FX flows. 
Usually it's negatively correlated to the Yen. It can be explained as a reasonable decline in the yen usually lifts stocks of export-oriented companies (cheaper Japanese products), which tends to boost the overall stock index. 
But the Nikkei-yen relationship is sometimes reversed (positive correlation): wherein a strong open market in the Nikkei tends to boost the yen (weighs on USD/JPY) as investors’ funds flow into yen-denominated stocks.

Nikkei225 - Daily


Relationships between stocks and currencies

Currencies are probably the most difficult asset class to fit into a consistent or idealized intermarket model. To start with, think that in order to purchase stocks from a particular country, investors must pay in the local currency, increasing the demand for it. The other way round, a strong currency makes bonds and stocks from that particular country look attractive.

In any case, the correlation is not always clear, there are response lags between each of the markets' reactions, Forex and equities, which leaves the investor holding foreign equities exposed to exchange rate fluctuations.

This correlation can also be fragile among international equity markets themselves. There are so-called "global divergences" when the stock market in one country starts performing better than the stock market in another country. Currency driven capital flows from the country with the weaker stock market to the country with the stronger stock market, is often the cause.

US Dollar Index - Daily

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Latest STOCK INDICES Analysis

Editors' picks

EUR/USD retreats toward 1.0550 as dollar rebounds

EUR/USD retreats toward 1.0550 as dollar rebounds

EUR/USD has lost its traction in the American session and retreated to the 1.0550 area. In the absence of high-tier macroeconomic data releases, the dollar is staging a rebound with the US Dollar Index rising above 103.00 and forcing the pair to edge lower.

EUR/USD News

GBP/USD consolidates its weekly gains below 1.2500

GBP/USD consolidates its weekly gains below 1.2500

GBP/USD has extended its sideways grind below 1.2500 into the second half of the day on Friday with the dollar staying resilient against its rivals. Nevertheless, the pair remains on track to snap a four-week losing streak.

GBP/USD News

USD/JPY struggles to gain any meaningful traction despite risk-on, stuck around 128.00

USD/JPY struggles to gain any meaningful traction despite risk-on, stuck around 128.00

USD/JPY attracted buying on Friday and recovered further from the monthly low touched on Thursday. The risk-on impulse undermined the safe-haven JPY and extended support amid modest USD strength. Recession fears held back bulls from placing aggressive bets and kept a lid on any meaningful gains.

USD/JPY News

Gold loses traction, drops below $1,840

Gold loses traction, drops below $1,840

Gold came under modest bearish pressure in the American session on Friday and dropped below $1,840. The benchmark 10-year US Treasury bond yield stays quiet above 2.8%, helping XAU/USD limit its losses ahead of the weekend.

Gold News

WTI stabilises close to $110, set to end the week flat and at the middle of recent ranges

WTI stabilises close to $110, set to end the week flat and at the middle of recent ranges

Oil prices are a little lower on Friday, though remain comfortably within recent ranges and aren’t really trading with much conviction. Front-month WTI futures were last trading near the $110 per barrel mark, down just under $2.0 on the day, though still trading nearly $5.0 higher versus Thursday’s lows around $105.

Oil News

Risk-on/ Risk-off

Bonds

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