Today the Federal Reserve chose not to proceed with an 11th consecutive interest rate hike, opting instead to assess the effects of the previous 10 hikes. However, the Fed announced that it anticipates implementing two additional quarter percentage point increases before the year concludes. While the pause was largely expected, the fact that policy makers see...
US Inflation Trading Opportunities Ahead
The next two days' worth of trading could turn out to be particularly interesting due to the sharp drop in CPI expected on (US time) Tuesday as well as the market being (over?) confident that the Fed is going to pause its rate hiking cycle on Wednesday.
According to the CME Group's FedWatch tool, traders are factoring...
Last night, the Bank of Canada decided to raise its interest rate by 25 basis points, bringing it to 4.75%. This move came after a pause in the tightening campaign during the two previous meetings. As a result, borrowing costs reached a level not seen in 22 years. Because most of the market, approximately 60%, expected interest rates to remain unchanged, the...
The USD/CAD has been consolidating since late last Friday. Key levels include 1.346 and 1.345 for the upper bound and 1.341 and 1.340 for the lower bound. The market appears to be in the middle of the storm that might be unleashed after the Bank of Canada’s (BoC) interest rate decision on Wednesday.
In January, the BoC made history by being the first major...
NFP report: How Will it Shape the Gold Trend?
Gold prices experienced a rise on Tuesday and Thursday (sideways on Wednesday), driven by traders' expectations of another interest rate hike by the US Federal Reserve. But is the medium-term downtrend really over?
One fundamental indicator that can help answer this question is the nonfarm payrolls, due to be...
The US dollar is in the midst of a week filled with pivotal events. Together, these fundamental drivers hold the key to understanding the potential shifts in the US dollar's performance throughout the week:
US President Joe Biden announced that a bipartisan agreement has been reached to raise the US debt ceiling of $31.4 trillion, aiming to avoid a default....
Rakon reported strong results today but the pièce de résistance was its dividend of 1.5c per share (roughly ~1.5% gross). We called for a dividend in our initiation of coverage on the company and we’re buoyed that management listened – we think this is crucial to unlocking shareholder value and valuing the stock at a multiple on par with its international peers....
Oceania shares were a touch higher after reporting a mixed result, with operating earnings holding up due to sales margins, while sales volume is starting to slow. Oceania cut its full-year dividend to 3.2 cents per share, as the next couple years will appear challenging for the business given rising interest rates.
We still view Oceania as a value retirement...
The New Zealand dollar experienced a significant drop of over 2% on Wednesday, reaching its lowest level in more than three months at $0.6039. This decline followed the Reserve Bank of New Zealand's (RBNZ) expected decision to raise cash rates by 25 basis points to 5.5%. However, the central bank also hinted that it might conclude its tightening campaign, which...
Alphabet trades at 20x earnings vs. Microsoft's 29x. Bard is a worthy competitor to ChatGPT and we remind readers that Alphabet continues to be the world's dominant advertising business. Preference is GOOG, MSFT, AMZN in order. Strongly prefer GOOG to MSFT given valuation discount. We see upside for Alphabet at $140 per share and downside at $110. Read more at...
Tomorrow, the latest inflation rate for the UK will be released, which will be significant for traders dealing with GBP/USD due to the perhaps unrealistic forecast for a 2-percentage point drop.
It is expected that the inflation rate for April will have significantly dropped to 8.2%. Are markets overly optimist with this forecast? In March, the consumer price...
Estee Lauder produced another disappointing result for the quarter – organic net sales shrank 8% while net sales (incl. FX) decreased 12%. EPS came in at 0.43c.
China is given as the reason for the company’s subpar results, but delving into the results deeper it looks to be actually Europe, The Middle East and Africa which are showing weakness – net sales fell...
Home Depot reported weaker earnings – revenue fell 4.25% YoY earnings fell 8.8%. It reflects a weaker building + DIY market in the US, which is what we’re seeing across the board – specialist store Restoration Hardware (RH) reported similarly weak sales. HD fell 2.15% in response, which isn’t enough value for us yet. We initiated coverage of HD back in December...
Two big events affecting the USD/CAD pair include the CPI reading from Canada yesterday as well as the ongoing debt ceiling crisis in the US.
In April, the monthly Canadian headline CPI surged by 0.7%, resulting in an annual rate of 4.4% compared to the previous 4.3%. This increase exceeded the consensus estimates by three-tenths of a percent in both instances....
Westpac shares bucked the trend amongst its banking peers rising after revealing its half-year result for the first half of the 2023 financial year. Cash earnings came in at $4,001m which rose +22% from last year benefiting from higher interest rates and making progress to become a simpler, stronger bank with disciplined cost and margin management providing $1...
Apple surprised us with iPhone sales rising to $51.3B vs. estimates of $48.9B. Some of this was likely due to the backlog of customers who were unable to purchase a new phone during the company’s supply crunch in China the previous quarter. We’re most impressed with services growth, which grew +5.5% to $20.1B. An astonishing figure: almost one billion people now...
Headline here is WarnerBrothersDiscovery’s streaming unit swung from a $654M loss to a $50M profit for Q123. Aside from Netflix, none of the streamers are profitable – so profit in WBD’s streaming unit is a “big win” for the company and proof of CEO Zaslav’s drive to reduce debt and increase cashflow. Analysts were forecasting a streaming loss of ~$70M-90M. The...
Disney reported mixed results for the quarter. The good: streaming losses fell to $659M from the previous quarter’s $1.1B, whereas streaming revenues rose +12% to $5.5B. Crucially ARPU (average revenue per user) rose 20%in the US and ~6% internationally — it’s a case of squeezing actual profit out of users rather than scaling the business at all costs — this is...
