S&P Extends Gains & EUR/GBP Eases Back from 2022 Highs
S&P500 => The index moves above 4500
Snap => The stock jumped 58% on Friday
EUR/GBP => The pair eases back from its 2022 high
S&P500 Earnings Season Update
Last week was another volatile week for stock markets, the S&P 500 managed to gain 1.4%. Fed speakers helped calm fears of an overly aggressive Fed. However, this was then offset by an unexpectedly strong US jobs report. 467k jobs were added in January, against the 150k forecast. December’s figure was also upwardly revised to 510k, from 199k. Mixed earnings from tech giants Meta and Amazon added to the big swings. This week US CPI inflation data and more earnings from the likes of Disney, Uber, and Pfizer could create more volatility. So far 56% of the companies in the S&P500 have reported Q4 2021 results. According to FactSet, of these 76% have recorded EPS ahead of forecasts, which is in line with the 5-year average
What’s next for S&P500?
The S&P500 rebounded from its recent lows before running into resistance at 4590 the January 10 low. The price headed lower before finding support of the 200 sma at 4450. It currently trades between these two levels, whilst the RSI is neutral. Buyers will be looking for a move over 4590 in order to rise back into the multi-month rising channel. A move over 4750 could see the buyers gain momentum. Meanwhile, sellers will be looking for a breakout below 4450 to bring 4275 and 4221 the year-to-date low back into play.
Snap, Snaps Back
Shares in Snap surged 58% on Friday after the latest quarterly results stunned Wall Street. Snap reported Q4 earnings and revenue which beat analysts’ estimates and the social media firm also reported its first profitable quarter as a public company. The strong numbers came a day after Facebook parent Meta reported a drop in daily active users, for the first time ever, and disappointing guidance. Snap proved that it is no Facebook. EPS came in at $0.22 against $0.10 expected and revenue was $1.3 billion versus the $1.3 billion forecasts. However, it’s worth keeping in mind that Snap does face the same headwinds as Meta, which warned over a $10 billion hit from the Apple iOS privacy changes.
EUR/GBP Gains on Rate Hike Bets
EUR/GBP is easing lower after gains of 1.77% from last week. The euro jumped higher after a more hawkish than expected ECB, which appeared to be preparing the market for a rate hike in 2022. This was confirmed by the ECB’s Klaas Knot who confirmed that he believed that the ECBN would raise interest rates in the fourth quarter of this year. Expectations of a sooner move by the ECB lifted demand for the Euro even after disappointing retail sales on Friday. Today, the release of Eurozone investor confidence could help support the euro, as confidence is expected to have risen.
| EZ Retail Sales Dec MoM | Expected: -3% (4%) | Previous: 1% |
Support can be found at 0.8370 (February 1 high) and 0.8325 (11 Jan low)
Resistance for the pair can be seen at 0.8460 (100 sma) and 0.85 (round number)
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