HFMarkets (hfm.com): Market Analysis And News

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1

Date: 6th January 2025.

The NASDAQ Rebounds As Investors Get Ready For Earnings Season!

The NASDAQ jumped more than 1.65% on Friday after 5 days of consecutive declines. The decline was primarily due to investors opting to take advantage of the discounted price ahead of this week’s earnings season. Earnings season is due to start this Friday with the banking sector. However, is there still downside risk to the NASDAQ’s bullish trend?

NASDAQ - Bullish Signals With The Risk of Corrections!

Due to the NASDAQ’s considerable rise on Friday, the index is obtaining bullish signals from technical indicators and price action, although other factors continue to signal risk of a potential further downslide. With inflation on the rise again and economic data beating expectations, the hawkishness of the Federal Reserve is likely to remain.

On Thursday and Friday, the US Final Manufacturing PMI, ISM PMI and ISM Manufacturing Prices all rose above expectations. The ISM Manufacturing PMI rose from 48.4 to 49.3 and the Manufacturing Prices Index from 50.3 to 52.5. Friday’s strong economic data did trigger a 40-minute decline, but the bullish trend continued thereafter. Nonetheless, the positive economic data adds to the Federal Reserve’s current bullish tone. A hawkish Fed in the long-term can dim upward price movement or even trigger a larger correction.

In addition to this, President-elect Trump will take office on January 20th and most political experts predict his administration will pursue tariffs on imports. Previously, this triggered a lower sentiment towards the stock market and a strong US Dollar. The US Dollar over the past 2 months has appreciated by almost 5.00%, but stocks have yet to experience a significant, lasting decline. A strong factor for the performance in January and February will be earnings season.

Traders will be monitoring whether institutions increase their exposure to the NASDAQ as earnings season approaches. However, the market’s decision will also depend on the upcoming employment data. The US is set to release its JOLTS Job Vacancies tomorrow, ADP Employment Change on Wednesday, NFP Employment Change and Unemployment Rate on Friday. Analysts expect the US Unemployment Rate to remain at 4.2%. If the employment data reads higher than expectations, investors may adopt a more hawkish stance on monetary policy. As a result, the positive data could have a negative short-term effect on the NASDAQ.

European stocks trade higher as the European Market opens, while Asian stocks decline. However, both the VIX Index and US bond Yields trade higher. If the VIX and Bond Yields continue to rise, traders may become cautious of further speculating the impulse wave in the short term.

NASDAQ - Earnings Season

As mentioned above, earnings season will start on NFP Friday (Friday 10th), but none of the NASDAQ components will be included. Nonetheless, the quarterly earnings reports on Friday will provide either a stronger or weaker sentiment towards the US stock market and therefore will have a ripple effect on the technology sector.

The first NASDAQ companies which analysts will be following are Netflix and Tesla. Analysts expect revenue for Netflix to increase above $10 billion, but for their earnings per share to fall from $5.40 to $4.22. However, for Tesla, analysts expect both revenue and earnings per share to increase, despite the company failing to meet its delivery targets. Over the past 12 months, Tesla has risen by 70% and Netflix by 82%.

NASDAQ - Technical Analysis

The price of the NASDAQ is trading above the 75-bar EMA and attempting to cross above the 100-bar SMA. On the 2-hour chart, the index is also trading in the buy zone of most oscillators. The NASDAQ also starts this week with a bullish price gap measuring 0.23%. Currently, the price movement indicates investors are increasing exposure as we approach the start of earnings season. However, this will also depend on the employment data throughout the week.

Key Takeaways:

*Price movement indicates investors are increasing their exposure to the NASDAQ as earnings season approaches.
*Key risks remain if employment data beat expectations, which could likely trigger a prolonged hawkish stance from the Federal Reserve.
*The performance of the stock market will also depend on the potential for upcoming trade wars. Donald Trump is set to take office on January 20th.
*The price of the NASDAQ is trading above the 75-bar EMA and attempting to cross above the 100-bar SMA. Today’s trading starts with a bullish price gap.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

2

Date: 7th January 2025.

European Stocks Dip, Yen Hits Lows, Bitcoin Surges Over $102K Amid Market Shifts.

Asia & European Sessions:

*European stocks are set to open lower, with Euro Stoxx 50 futures down 0.5%, reflecting caution ahead of key economic releases, including eurozone inflation and US job openings data.

*US futures also edged lower, contrasting with modest gains in Asian markets driven by strength in chip-related stocks. The surge in semiconductor shares followed Nvidia CEO Jensen Huang’s announcement of new products, reigniting optimism around AI demand.

*Tencent shares plunged by as much as 8%, while battery maker Contemporary Amperex Technology dropped over 6% after being labeled a military-linked entity by the Pentagon.

*Market sentiment remains clouded by geopolitical concerns. Traders are digesting rising trade tensions after Donald Trump refuted reports suggesting he would ease tariffs if he returns to the White House. Washington’s decision to blacklist several Chinese companies, including tech giant Tencent Holdings, has further strained U.S.-China relations, adding pressure on China’s already slowing economy.

*Japanese Finance Minister Katsunobu Kato issued a warning about “excessive moves” in the yen, suggesting potential intervention to stabilize the currency. The Yen slumped to its weakest level since July, underperforming all major currencies, as Japanese retail investor outflows and the Tokyo benchmark fixing drove the decline. Meanwhile, the selling through the Nippon Individual Savings Account (NISA) and trend-following dollar buying could be a key factors behind the Yen’s drop.

*Justin Trudeau has announced he will resign as Canada’s prime minister and as leader of the Liberal Party of Canada.

Financial Markets Performance:

*The US Dollar dip to 107.85 from 109.60 highs, after Trump’s denial.

*The EURUSD rebounded to 1.0413, the GBPUSD rallied to 1.2550.

*The USDJPY fell to 158.42 against the dollar before paring losses to 157.73 by mid-afternoon in Tokyo. The Yen’s performance could be further impacted by US data, particularly Friday’s jobs report. A stronger-than-expected figure may push back expectations for US rate cuts, potentially driving the USDJPY pair to 159.

*Oil prices steadied after dipping for the first time in 6 sessions, with technical indicators suggesting the recent rally may have been overextended.

*Bitcoin surpassed the $102,600 mark, signaling growing confidence in digital assets. A CoinShares report highlighted over $500 million in Bitcoin ETF investments in the year’s first three trading days. MicroStrategy added to the bullish momentum with its ninth consecutive Bitcoin purchase, acquiring another $100 million. The company now holds nearly $45 billion in Bitcoin, and its stock has surged alongside the crypto’s rebound — potentially paving the way for further share issuances to fund additional Bitcoin buys. The macroeconomic backdrop remains a key driver for crypto markets. Rumors of a rollback on Trump-era tariffs have caused the USD to weaken, adding volatility to global markets. Bitcoin’s recent price moves reflect this, with traders watching the dollar index closely for cues.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work.


Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

3

Date: 8th January 2025.

Global Market Update: Inflation Concerns Weigh on Stocks, Bitcoin Drops Below $100K, Gold Holds Steady.

Asia & European Sessions:

*European stocks saw an extended downturn in Asia and the US, driven by mounting inflation worries that triggered a selloff in Treasury markets.
*Fed funds futures took a hit after the stronger than expected JOLTS report, and the ISM services data that showed a pick up in activity, a solid labor market, and an acceleration in prices paid, all supporting a more cautious rate cut stance. Indeed, the implied January contract now shows just -1.7 bps in cuts this month. Earlier bets on a reduction by March have been abandoned, with rate cuts now anticipated in the latter half of the year.
*German manufacturing orders plunged -5.4% m/m in November, after already falling -1.5% m/m in the previous month. The correction was much sharper than anticipated and left the annual rate back in negative territory. There is some life in the manufacturing sector yet, even though the volatile headline numbers and negative survey readings flag ongoing weakness across the sector.
*Asian stocks saw significant losses as the MSCI index of regional equities recorded its largest single-day decline in over two weeks, erasing gains made on Tuesday. China’s primary stock index briefly dipped to its lowest point since September, reflecting investor anxiety over a potential increase in US tariffs.
*Investor sentiment across Asia remains dampened by ongoing economic uncertainty. In China, concerns about a deflationary spiral are growing, even as yield spreads in credit markets reach their lowest levels since the global financial crisis. This has challenged investor appetite amid a wave of debt issuances worldwide.
*The stronger than expected ISM services and JOLTS data weighed on Treasuries as they further eroded Fed rate cut risks, and the subsequent climb in yields and more hawkish Fed outlook hit stocks.
*The major indexes finished measurably weaker on the day with the NASDAQ dropping -1.89%, while the S&P 500 was off -1.11% and the Dow slipped -0.42%.
*Nvidia opened with a better than 2% gain to an intraday record peak of $153 after bullish news from the CES trade show, but the stock reversed in the afternoon and plunged -6% to $140.14 at the close

Financial Markets Performance:

*The US Dollar rallied to 108.65 with next immediate resistance at 108.85
*The EURUSD dipped further to 1.0325, while the GBPUSD is lower to 1.2445.
*The USDJPY is at 158.23 as the Yen remains under pressure.
*Gold is steady at $2650. Haven flows and central bank purchases helped to push gold to record highs in 2024 and central bank buying is helping to keep the price at high levels. China’s central bank resumed gold purchases in November, and data released today, show that purchases continued in December.
*Oil rose for a 2nd consecutive day to $75 after industry reports indicated another drawdown in US inventories.
*Bitcoin fell more than 5%, slipping to $96,200 after the $100,000 milestone. The drop came in response to positive US economic data, which pointed to a resilient economy and reduced the likelihood of further rate cuts by the Fed.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

4

Date: 9th January 2025.

FOMC Minutes Signal Slower Rate Cuts, UK Borrowing Costs Surge, & Global Market Update.

Asia & European Sessions:

*The FOMC minutes showed that the Committee expected to be slowing the pace of rate cuts after its decision to trim rates another -25 bps. Following an unexpected emergency rate cut in September, despite there being no immediate crisis, the Fed has since shifted towards a more measured approach, indicating that a slower pace of rate reductions would be “appropriate” by December. The core strategy remains consistent: to bring inflation down. While inflation-related discussions did touch on concerns over US President-elect Trump’s trade taxes and deportation plans, these issues were not the main focus of the inflation debate.
*The Greenback was firmer overnight on reports Trump would declare a state of emergency to get his tariff plans through. It dipped on the ADP report but bounced on the tight jobless claims data. The index had firmed yesterday after Trump denied reports he would soften his tariff plans, and after the strength in the JOLTS numbers Tuesday. Solid 30-year auction results also supported in the afternoon.
*China’s inflation data for December showed largely stable consumer prices, with food prices stabilizing (a notable factor given food’s significant weight in the consumer basket) and only modest increases in non-food prices, despite efforts to boost domestic consumption. Producer prices, however, continue to struggle with deflation.
*In the UK, the BRC shop price index fell more sharply than anticipated, with a significant drop in non-food item prices, likely influenced by Black Friday discounts. When combined with sales data, this suggests that UK consumers increased their real-term spending in the fourth quarter, driven by lower prices and promotions.
*Gilts remain under pressure in early trade, with the UK 10-year rate up 2.1 bp at 4.81%. UK 10-year borrowing costs surged to their highest point since the global financial crisis, while the Pound plummeted, as a deepening bond sell-off raised concerns over the Labour government’s ability to meet its self-imposed budget targets. So far in 2025, borrowing costs in the UK have increased at a faster pace than in other major economies, driven by investor fears over the government’s large borrowing requirements and the mounting risk of stagflation.
*Eurozone industrial production rose 1.5% m/m in November. Germany’s jobless rate still is very low by European standards, but the overall picture remains pretty gloomy, with political uncertainty and the threat of Trump tariffs not helping.

Financial Markets Performance:

*European stock markets are mixed, with the FTSE100 outperforming and up 0.4%, while the DAX is down -0.2%, after a largely weaker close across Asia. Hang Seng and CSI 300 lost -0.3%, after Chinese inflation numbers.
*The USDIndex is up 0.2% and at 109.17, while Sterling continues to sell off. GBPUSD slumped below 1.2300 on budget angst and as the 10-year Gilt spiked.
*EURUSD slumped to 1.0273 after weak Eurozone data.
*USOIL is slightly down on the day and at USD 73.24 per barrel.
*Gold is unchanged at USD 2662.44 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.