Macro Update: US Tech Earnings ($AMZN $TWTR) & Intraday outlook

Very good morning. It is Friday 30th of April and it's the last trading day of the week and the month. And just before I begin to talk you through what's been going on in terms of the overnight and what to expect for the day ahead, don't forget we've got the latest Market Watch podcast from us, myself and head of trading Piers Curran. It's going to go out in a few hours' time, a bit later today. Actually, we're going to talk a little bit more about kind of psychology around trading, going to kind of interview Piers to a certain extent about kind of his times in his career when he's stumbled upon a real challenging time or a big loss that he can recall that was kind of tough to mentally handle and how he went about addressing that. And also on the upside as well, you know, the kind of euphoric nature of a payoff when you've had a really unexpectedly large trade and how do you manage that process. So it's going to be a really useful one, I think, in terms of practical tips on the mindset side. So do check that out. If you go on to any of the major podcast platforms like Apple Podcasts or Spotify, just search for Market Watch, follow, and then you'll get an alert every time a new episode goes out every Friday. All right. Well, look, let's get straight into it and talk about what's been going on. And we actually closed positive on Wall Street, gains ranging from around 0.5% to 0.7%. Across the major 3 indices. A really seesaw day yesterday for those who are in markets would obviously be aware. It's almost like a perfect V-shape here in the S&P 500 after we saw some quite aggressive selling pressure coming out of the gate, only to be counteracted then shortly after the exit of European traders to come all the way back up. And then we've just drifted back down again during the Asia-Pacific session. My take here is still one, uh, generally from a technical perspective, I think of a degree of consolidation at this point. If you look on the daily chart, I think yesterday was quite key just generally for the week. We were kind of knocking on the door of this previous high that had been restricting price action throughout the entire week, which was the prior week's high at around 4183.5 in the S&P. We closed firmly above that yesterday and we pulled back a little bit here today, so I'd still on the higher time frames look at 4183.5 as a key area for the weekly close. Can we close above that, which will perhaps see consolidation again between that kind of 80 to 4200 level while we just kind of see how things play out going forward into, into next week. Otherwise, other charts just while we're on it to have a look at, oil has had a Really great week. We're a little bit negative so far as the session is concerned right now. We've drifted south during the Asia-Pac session, but just putting my, my indicator on here, if we look at where we were from the low, we obviously respected technically this, this low at around 60, 66 in front month futures, which was the low going back to last Thursday. We've had 3 tests on that level. So that's a really strong point on the low of this recent trend. But going from the low to high, we have risen the best part of 8%. In fact, we've gone from 60.66 up to highs of around 65.47. So a little bit just coming off the top here, I think, is absolutely no cause for concern or alarm at this point. It doesn't really surprise me. We have broken through that, that kind of trend line that was in play through course of this rise that we've had really throughout the week. And just zooming in on the price action a little closer here, um, in terms of the setup for today. So that area there we've already respected has been good level of support, which I'd marked up, which was the high that we had back on the, the 20th in the prior week. And we had the failed push through that back midweek on Wednesday. Then it's acted as a bit of a fairly rough but a zone of support around 6438, which is just holding price on that downward move seen in the Asia-Pac session. On the upside, if we continue to push up, you've got the pivot seen at 6669 as well, was some of the Asia-Pac respect briefly on the support and resistance side of things. So I'd be looking at that on the upside if we continue to recover. Any further pullback in price would be looking down at these levels at 64 handle, 96. Uh, just below you've got this area of support that came into play during the early hours of this time yesterday. And then beyond that of the S1, then you go further down to 63, um, 63. So generally oil going to finish higher for the week, um, irrespective if we have any pullbacks. Certainly I don't think we're going to get anywhere near down the lower zone of this today. Certainly not from a scheduled fundamental point of view. There's nothing to really prompt that move at this point in time, barring anything unexpected, of course. Otherwise, elsewhere, T-notes— I've just marked this up with a trend line following the downward move that we've had throughout the week. We've had a little bit of volatility, of course. That— this was the brief pop in prices that we had on the back of Jerome Powell. But this is exactly really what I was talking about in the briefing yesterday. I don't think Powell, what he did this Wednesday was anything new at all. He just reiterated really what the Fed have been telling us as a marketplace. It's just that market participants were kind of misaligned and not buying into the Fed rhetoric. And that was a function of market pricing rather than a fundamental change in the Fed strategy. And so that move faded throughout yesterday. Thursday session, which I think was absolutely to be expected. We then had a bit of a pullback, obviously, as the, the equity market was pulling off a little bit at that point. And then we've kind of held it at the moment. So technically speaking, any further push-up, I'd just be keeping an eye on this upper side of the trendline at 31, which was around the high we've just tested around this morning. We're just hugging the pivot for the time being. So generally speaking though, yields a touch higher as far as the week is concerned, but only moderately so, irrespective of course of the good numbers that we've had. You know, whether you're looking at consumer confidence, whether you're looking at GDP, whether you're looking at jobless claims, all of these numbers indicative of that general more constructive narrative going forward for growth in the US economy. in the currency markets, the dollar index, as far as it's trading right now, is up fractionally, just short of 0.1%. Just keeping an eye on the major pairs. As far as cable is concerned here, just getting a little squeezed in recent price action over the last 24 hours. So worth keeping an eye on the downside here. You've got the high that we printed on Monday, which then defines then a relative key level for, for price of where we're trading at the moment. The low yesterday and we're just around that level, uh, at the moment. Could break out some of this recent, uh, consolidation phase, uh, for, for cable. Any downside move, you've got that kind of double top going back to 39.26, the S1 residing just below there, and perhaps the breakdown over there if we were to see emergence of some dollar strength with these technical levels breaching. Because EURUSD likewise, um, not quite as clean but a fairly similar setup You know, if you're looking at these, these highs that we were printing back on Monday, uh, and then this kind of near-term, uh, support area that we have had over the course of the last 2, 2 or 3 days. And so if that does trade heavy, obviously we'd be targeting down at around 21, uh, 130 here in the euro. And if that all comes into play technically on the breach with cable as well uh, and some just prevailing dollar strength, then you could see some, some nice downward directional moves there short term. Again, nothing to take more medium-term positions, just from an intraday perspective. All right, well, let's just get into some, um, some headlines. So as you can see though, you know, despite the recovery that we had late in the US session in that kind of V-shaped move in US equities, particularly for the S&P, not quite so for the NASDAQ, Generally, futures have drifted south during the Asia-Pac session. Asian equities were lower overnight, albeit fairly modest. Chinese regulators have imposed wide-ranging restrictions on financial divisions of 13 companies, including some of the, the big guns like Tencent, also ByteDance, in a broadening effort to rein in the nation's tech giants. As a reminder, obviously it's a bank holiday in the UK on Monday, So I'll probably look to get out a look ahead for the week on Sunday and I'll publish that. But also for the Asia-Pac region, it's an extended weekend in Japan for Golden Week, in China for Labor Day, who will, will remain closed through to Wednesday. Just so you're aware, in that region overnight we did have the Chinese manufacturing PMI for April. What did that look like? Well, Here's a chart so you can see. Um, so you've got the white line manufacturing PMI, uh, the purple is non-manufacturing PMI. So manufacturing for April came in at 51.1, just slightly below expectations of 51.7. Uh, non-manufacturing 54.9 versus expected 56.1. The Caixin manufacturing was a slight beat though, 51.9 against 50.8 expected. All in all, no real read across though into the— for the European open, the this morning. We did add aftermarket earnings last night, um, despite conversation me and Piers had, some of the speculation at the beginning of the week, no stock split coming by way of Amazon, but their shares trading up about 2.4% in aftermarket trade last night. So by the numbers, their revenues $108.5 billion, you heard me right, um, versus expected $104.56. So a beat and obviously a phenomenally large number Earnings per share $15.79 against $9.69 expected. Online, online store net sales were stronger. Quarterly income was up, and they see Q2 net sales in a range of $110 to $116 billion. The previous estimate was for around $108.35 billion, so a positive forward guidance as well, upgrading what they see for Q2 net sales. So their shares were up Higher, more than 3% at some point, but up around 2.4% at the close of aftermarket. Twitter though, the opposite, down 11.5% for Twitter. They had been bid into the release. A lot of the expectation was that the advertising revenue kind of bump that we saw in some of the other related advertisers like Alphabet, Google And Facebook, Facebook really had a good session yesterday. Twitter didn't, didn't quite stack up with the numbers. They did have a surge in digital spending, but actually one of the things that people were looking at was that they missed user growth expectations. User growth was up, it just wasn't up as aggressive that some were looking for. Also, they see Q2 revenues at $980 million to $1.08 billion. Previous expectations were for $1.05 billion, so a little bit extension on the lower end of that forecast. Um, and the average monetizable daily active users, DAUs, came in at 199 million, which is basically in line with expectations, but that in itself was seen as a disappointment. So they got hit quite hard in aftermarket trade. On the earnings side of things, uh, you've got ExxonMobil, Chevron, that kind of big ones to look out for pre-market. In UK and Europe, you've got AstraZeneca, Barclays coming out the FTSE, BBVA in Europe, BNP Paribas coming out in France, E&I, another firm to look out for as well with the earnings today. Otherwise, one of the other stories just briefly to mention, haven't really talked about COVID and vaccine too much really this week And obviously there's still a really serious situation developing in the likes of India and some other hotspots around the world. But from a global markets point of view, still looking beyond that at the moment, and relative stability seen as far as on that subject for, for major asset classes, US-denominated. But one thing on the vaccine side that I saw yesterday was AstraZeneca executives have struggled to pull together the full data necessary to apply for US approval of its COVID-19 shot, according to people familiar with the matter. That further delays then the efforts to secure the FDA's go-ahead. Uh, the company Astra reportedly told US officials it might need until mid-May to finish its application. Previously, the company has said it only needed up till mid-April. So overall AstraZeneca has really gone through the mill with the actual vaccine in itself and its association with blood clots to its submission and validity of its data. And so I guess they're just playing on the side of prudence here, trying to give the full data set to the FDA. But it just goes some way to show the struggles of which they've encountered on this particular front, which seems to be a little bit more unique to them than perhaps some of the other companies, the other pharmaceutical companies. I don't think this really is a, a big negative. I don't think it's time to get too worried about I just wanted to make you aware of it. As far as the day is concerned, just looking forward, a few things for sure that you need to just clock on your radar from the German data that we've already just had. We just update my, my newsfeed so I can, I can bring you those latest numbers because we just shooting this. We have gone through 7:00 now. And I think my calendar is incorrect here in terms of the German figures, but nonetheless, we do have the Eurozone is the main focus, is the CPI flash year-on-year April figure, and that is expected to come in at 1.6%, which is a higher number, a fairly substantial increase in the previous 1.3%. But as noted by, by analysts, this is largely attributable to the widely flagged year-on-year base effects. If you think about the slump in energy prices last April, it doesn't really come as much a surprise the fact that on the year-on-year basis that number is going to be much higher. And actually, if you look at the year-on-year ex-food and energy, it's a much lower figure and it's expected to be absolutely unchanged at 1%. Um, on the GDP side of things, in actuality we're going to print negative 2% year-on-year expectations, quarter-to-quarter -0.8. Technically speaking, this is going to be consecutive quarters of negative growth, which is classified as a technical recession. However, I don't necessarily think that that's going to particularly spook the market. Neither would an increase in inflation because of those aforementioned reasons. I think with the inflation side, it's to be expected, as discussed. I think on the growth side, although it's not a great state, it's negative compared to the figure that we saw, obviously, that was very high in the US yesterday. The point being is, is that I think everyone is accustomed to the idea that going forward things are only going to improve from here on out, you know, all things being equal, of course. So I think people are aware that the reopening in the likes of Germany, France, Italy, and so on, as the vaccinations continue, will improve and are willing to look beyond this short-term Q1 negativity that we've had with the technical recession that we're about to see. So I wouldn't over-interpret it in a negative way, I guess, is my summary. Later on this afternoon, you've got the core PCE price index coming out of the States. You've also got Chicago PMI as well coming out this afternoon, expected to still be very elevated, albeit slight softening from the prior number. The Michigan number's a final reading, so nothing to get too worried about. And then the earnings we've, we've already covered. So that is it. I'm going to let you get on with your, with your trading day. Don't forget to check out the podcast. If you're watching this delayed on YouTube, don't forget to subscribe to the channel. And as they say, we won't be active so much on Monday for the UK holiday, but I'll try my best to get a briefing out for the week ahead on Sunday at some point. All right, take care guys and have a lovely weekend.