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Wake Up Wall Street (SPY) (QQQ): Market dead as everyone waits on Fed

Ivan Brian FXStreet

Here is what you need to know on Wednesday, February 1:

All you need to know is the Federal Reserve. Nothing else matters really. Yes, we have ADP numbers shortly, but those will be totally overshadowed by the Fed decision. Not so much the decision, but the statement and presser. 25 basis points seems nailed on, but Powell has been hawkish all the time and the risk markets may not like that. It is a busy week though with NFP on Friday, so that may see the big money wait and look for confirmation. A hawkish Fed needs a strong NFP, and a dovish Fed needs a weak NFP. Anything else and we are set for more confusion and range trading.

Ahead of the Fed the US Dollar Index is lower at 101.86, oil is up to $79.57 but still much lower for the week. Gold trades at $1,928 for no change.

See forex today

European markets are mixed: Eurostoxx and FTSE completely flat, CAC -0.37%. DAX +0.3%.

US futures lower: NASDAQ flat, S&P 500 -0.2% and Dow -0.3%.

Wall Street top news

Eurozone CPI lower than expected, but German data delayed.

Meta Platforms (META) provides earnings after the close.

Advanced Micro Devices (AMD): revenue ahead of forecasts.

Amgen (AMGN): EPS in line, revenue ahead.

Electronic Arts (EA): down 9% on lowered forecasts.

GSK: beats on top and bottom lines.

Match Group (MTCH): Stock drops 8% on low forecasts as earnings miss estimates.

Mondelez International (MDLZ): beats on top and bottom lines.

Snap (SNAP): beats on EPS, but revenue misses. Stock down sharply on weak outlook.

Intel (NTC): cuts wages.

Upgrades and downgrades

Upgrades

Wednesday, February 01, 2023

COMPANY	TICKER	BROKERAGE FIRM	RATINGS CHANGE	PRICE TARGET
Primis Financial	FRST	Piper Sandler	Neutral>>Overweight	$13>>$14
NeoGenomics	NEO	Needham	Hold>>Buy	$15
Magna	MGA	BMO Capital Markets	Market Perform>>Outperform	$65>>$74
Hubbell	HUBB	JP Morgan	Underweight>>Neutral	$200>>$205
First Interstate Bancsystem	FIBK	Stephens	Equal-Weight>>Overweight	$44>>$43

Downgrades

Wednesday, February 01, 2023

COMPANY	TICKER	BROKERAGE FIRM	RATINGS CHANGE	PRICE TARGET
American Electric	AEP	Wells Fargo	Overweight>>Equal Weight	$108>>$99
Edison	EIX	Wells Fargo	Overweight>>Equal Weight	$76>>$73
Equitrans Midstream	ETRN	Goldman	Buy>>Sell	$9.5>>$6
Funko	FNKO	Goldman	Neutral>>Sell	$22>>$8.5
Hasbro	HAS	Goldman	Buy>>Neutral	$64
Veradigm	MDRX	Piper Sandler	Overweight>>Neutral	$17>>$18.5
Taysha Gene Therapies	TSHA	Jefferies	Buy>>Hold	$14>>$1.5
WSFS Financial	WSFS	Piper Sandler	Overweight>>Neutral	$53>>$52

Source: WSJ.com

Economic releases

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Week ahead: Rate hike bets face a crucial data week

Despite the solid drop from the mid-September high, oil prices remained in the driver’s seat for another week, setting the tone in financial markets. Six months have passed since the late-February start of the US-Iran conflict, and there is still no breakthrough in the stalled talks, despite pressure from regional leaders and the rest of the world.

CFTC Report: Defensive currency positioning takes hold

The week in one sentence: Sterling and Euro shorts deepened in the week to September 22, while Yen longs were cut sharply. Oil positioning improved despite a steep price decline, and Gold exposure remained crowded. The main signal was a more defensive currency positioning backdrop.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.