Wake Up Wall Street (SPY) (QQQ): NASDAQ enters corrective phase as stocks remain on edge
Here is what you need to know on Thursday, January 20:
Equity markets were attempting some form of dead cat bounce this morning as Europe opened in the green, but even that weak attempt has been swept aside by bears now. It has been a while since bears were allowed out, so it would be mean to beat them back just yet. They are certainly in charge of the NASDAQ as it enters a corrective phase now, defined by a drop of 10% from the high.
The S&P 500, meanwhile, has dipped below its 100-day moving average and has the 200-day in sight at 4,425 now, only 100 points away. We do expect some respite today with yields falling back, and the German 10-year is back in negative territory. Earnings from Netflix after the close will usher in the tech sector earnings next week, and these may offer more comfort than the recent mixed bank earnings.
However, things are heating up geopolitically with President Biden, who said he expects Russia to invade Ukraine. Certainly, Russian troops massing on the Ukraine border is indicative of that. An invasion is likely to be met with strong sanctions by the US and EU, but these will not deter Russia. The US has little taste for action after the Afghanistan exit, so Russia may seize the opportunity to lay down a marker. All this will not sit well with equity investors who we feel have not yet given this scenario the proper probability. It could see the dollar gain, particularly versus the euro.
The dollar currently is a touch lower versus the euro at 1.1355 after German yields surge yesterday. Oil is lower at $85.40, Bitcoin is at $42,400. Gold is slightly higher at $1,842.
European markets are mixed: Eurostoxx +0.6%, FTSE -0.1% and Dax +0.2%.
US futures are higher: S&P +0.5%, Dow +0.4% and NASDAQ +0.9%.
Wall Street (APY) (QQQ) Stock News
President Biden says Russia is likely to invade Ukraine.
UK interest rate hike is a near certainty in two weeks.
China reduces mortgage benchmark rates.
Netflix (NFLX) reports earnings after the close.
American Airlines (AAL) beats on EPS and revenue.
United Airlines (UAL) also beats on top and bottom lines.
Ford (F) drops 2% on Jefferies downgrade.
Signet Jewelers (SIG) says holiday sales up 30%, shares up 6% premarket.
Kinder Morgan (KMI) beats estimates on EPS and revenue.
Unilever (UL) says it will not raise its £50 billion offer for GSK healthcare business.
Alibaba (BABA) up 6% premarket as Mizuho says it should recover after China cuts interest rates.
Regions Financial (RF) down 5% on earnings miss.
Luckin Coffee (LKNCY): FT says it may be relisted on NASDAQ.
Upgrades and Downgrades
Source: Benzinga Pro
Economic releases
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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.
