STOCK PRICES AND NEWS


NIO Stock News: Nio Inc plunges 5% but retains the $19 mark

NIO Stock News: Nio Inc plunges 5% but retains the $19 mark

 NYSE NIO fell for the third straight trading day and hit the lowest in a week at $19.02. The stock price of the Chinese Electric Vehicle (EV) maker eroded 4.96% on Tuesday to settle at $19.17. NIO stock tracked the weakness across the major Wall Street indices, triggered by a sharp sell-off in the tech-intensive Nasdaq Composite Index.

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DEEPER DIVE

Microsoft: Price target at $230 with near-term risks due to strong US dollar

Microsoft: Price target at $230 with near-term risks due to strong US dollar

Welcome back to our deep dive series where we take an in-depth look at some of the most traded and most notable stocks. In this edition, we focus on Microsoft (MSFT). We will as ever go through the two standard valuation models to come up with an average 12-month price target. First, we will outline a discounted cash flow (DCF) valuation and, second, use a comparative or relative valuation model where Microsoft is compared to sector and index peers. 

Facebook parent price target at $200 despite macro headwinds

Facebook parent price target at $200 despite macro headwinds

We continue our deep dive series with a focus on Facebook parent Meta Platforms. We will focus as ever on traditional DCF cash flow analysis as well as a relative valuation model to forecast a 12-month price target.

Hold WMT to play defense vs upcoming US recession

Hold WMT to play defense vs upcoming US recession

Welcome back to our deep dive series where this time we focus on the consumer sector with Walmart (WMT). As per usual we will look at both fundamental and technical valuation methods to arrive at our 12-month price target for the retail giant.


NASDAQ

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S&P 500

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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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Editors' picks

EUR/USD edges higher toward 1.0250 ahead of US inflation

EUR/USD edges higher toward 1.0250 ahead of US inflation

EUR/USD has started to edge higher toward 1.0250 during the European trading hours on Wednesday. Ahead of the highly-anticipated US July inflation report, the dollar is struggling to find demand, helping the pair gain traction. 

EUR/USD News

GBP/USD clings to small gains near 1.2100, eyes on US CPI

GBP/USD clings to small gains near 1.2100, eyes on US CPI

GBP/USD trades modestly higher on the day near 1.2100 as market participants prepare for the US Bureau of Labor Statistics to release the July inflation report. The annual CPI in the US is expected to edge lower to 8.7% from 9.1% in June. 

GBP/USD News

USD/JPY: Establishment above 200-EMA at around 134.50 supports bulls

USD/JPY: Establishment above 200-EMA at around 134.50 supports bulls

The USD/JPY pair has witnessed mild selling pressure after printing an intraday high of 135.24 in the Asian session. The asset is walking northwards briskly to recapture its two-week high at 135.58. However, a slower upside move signals exhaustion and could trigger downside momentum at any time.

USD/JPY News

Gold retreats to the $1,790 area as US yields edge higher

Gold retreats to the $1,790 area as US yields edge higher

Gold lost its bullish momentum and declined to the $1,790 area heading into the American session on Wednesday. Ahead of the US CPI data for July, the benchmark 10-year US T-bond yield stays in positive territory near 2.8%, weighing on XAU/USD.

Gold News

WTI defends bounce off 61.8% Fibonacci retracement around $90.00

WTI defends bounce off 61.8% Fibonacci retracement around $90.00

WTI crude oil prices struggle to extend the latest rebound at around $90.00 during Tuesday’s initial Asian session. The black gold began the week on a positive side while extending Friday’s recovery from the 61.8% Fibonacci retracement level of December 2021 to the March 2022 upside, near $86.90.

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Risk-on/ Risk-off

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