Risk sentiment steadies as Russia headlines slow, earnings in focus

Risk sentiment steadies as Russia headlines slow, earnings in focus

eBay => The stock trades around at a 10-month low

Barclays (US) => The stock trades at a monthly low 

EUR/USD => The euro holds steady below 1.1350

eBay Q4 earnings preview

eBay is due to report Q4 earnings today. The share price has fallen 32% from its all time high reached in October last year, amid concerns of slowing growth for the e-commerce platform as economies re-open after the pandemic. eBay was a key beneficiary from the pandemic with active buyers surging. However, it is now shedding active buyers, which fell to 154 million in Q3 down from a peak of 166 million. Fewer buyers mean fewer sales, which is important as eBay makes money from a percentage of sales, charged as a fee. However, eBay has raised that percentage to 12.1% in Q3, and interestingly seller numbers have remained constant, will that still be the case in Q4? Expectations are for Q4 EPS of $0.98, up 14% YoY. on revenue of $2.61 billion up 9% YoY.

ebay chart

Where next for eBay share price?

eBay has been trending lower, trading within a falling channel since late October. The price trades below its 50 & 100 smas and the RSI is supportive of further downside whilst it remains out of oversold territory. Sellers will be looking for a move towards 52.50 the lower band of the falling channel, which would then open the door to 51.50 the March ’21 low. Buyers will be looking for a move to 60.00 the upper band of the channel and the February high, above here the bias could change to bullish.

Barclays Q4 earnings preview

Barclays Bank is due to release Q4 and full year results today before the UK open. Expectations are for Q4 pre-tax profits to rise to £1.17 billion compared to £646 million for the same period a year earlier. Full year pre-tax profits are expected to rise to £8.1 billion in 2021, up from £3.1 billion in 2020, thanks to a strong performance from the investment banking division, a rebound in consumer banking and the release of large amounts set aside for bad loans in the pandemic which never materialised. An increase in costs, particularly higher wages and bonuses could be under the spotlight. Share buybacks and dividends will be key for determining how well the earnings are received.

The euro awaits German confidence data

EUR/USD rose on Tuesday after three consecutive days of losses. The pair moved higher as risk sentiment recovered despite news that Russian troops had entered parts of Ukraine. Stronger than forecast German business sentiment data helped the pair push northwards, whilst upbeat US PMIs and rising consumer sentiment failed to lift the US dollar. Today, the pair is holding steady, as attention remains on Russia, Ukraine and the sanctions imposed by the West. German GFK consumer confidence is due be released and could help lift the euro. Eurozone inflation data is also due to be release, and is expected to confirm the pre-liminary 5.1% reading

US Services PMI

Ger. IFO Business Sentiment

Ger. Consumer confidence

Expected: 56.7 (5.5)

Actual: 98.9

Expected: -6.3

Previous: 51.2

Previous: 96

Previous: -6.7

 

Support can be found at 1.1300 (round number) and 1.1280 (February 14 low).

Resistance for the pair can be seen at 1.14 (100 sma) and 1.1490 (February high).

 


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