- Goldman Sachs unveils its quarterly earnings report for the first quarter of 2024. Impressively, both earnings and revenue have surpassed market expectations, triggering a notable surge in the company’s stock by 3.80%.
- US Core Sales increase at their fastest pace in 14 months. Retail Sales also beat expectations by a considerable margin.
- The US Dollar Index increases to a new high for 2024 due to interest rates, stronger economic data and its safe haven status.
- The Dow Jones trades 0.92% higher due to positive retail sales and strong earnings data.
USA30 – Goldman Sach’s Earnings & Revenue Soar Above Expectations!
The USA30 trades 0.92% higher on Monday and is attempting to regain value lost from Friday. As mentioned on Friday, as the price becomes more competitive, investors may look to take advantage of the higher entry level. Though, investors may wonder what is triggering the uptick this morning after escalation in the Middle East?
Even though any type of escalation is known to be negative, investors were relieved to see that the expected attack by Iran on Israel was controlled and resulted in no deaths. For this reason, the sentiment this morning is not one of fear but of relief. At the same time, G7 members are pleading with Israel not to retaliate, but to de-escalate.
At first, demand rose due to the quarterly earnings report from Goldman Sachs, the third most influential stock within the index. Impressively, both earnings and revenue have surpassed market expectations, triggering a notable surge in the company’s stock by 3.60%, thus propelling the stock closer to its historical highs. Notably, the Earnings Per Share was more than 30% higher than expectations. Equally as important, revenue was almost $3 billion higher than in the previous quarter.
A positive indication is that of the stocks holding more than a 3.00% weight within the index, only 12% are trading lower in pre-trading hours. The Retail Sales figures also support the Dow Jones as they indicate strong consumer demand, which benefits company earnings. However, stronger economic data will also keep the Federal Reserve from adjusting its interest rates, which is known to pressure stocks immensely. Additionally, investors should also note that the more expensive Dollar and higher yields are also known to trigger a decline. The US 10-Year Bond Yield is trading 0.102% higher during today’s first two sessions (Asian and European).
All the main global indices are so far trading higher indicating a higher risk appetite and strong sentiment towards stocks. Investors question whether earnings can support a new surge in demand for stocks or if investors will quickly cash in profits with each impulse wave. Tomorrow Unitedhealth Group and Johnson&Johnson will release their earnings reports before the US market open.
EURUSD – Sell Signals Remain After US Retail Sales!
The EURUSD is trading higher than the open price but continues to obtain signals in favor of the US Dollar. On the 2-hour chart, the exchange rate trades lower than the 75-bar EMA and below the 50.00 neutral level. Both indicate a downward price movement as do crossovers on smaller timeframes.
The Euro is decreasing in value against most currencies including the Pound, Canadian Dollar and Australian Dollar. Conversely, the US Dollar Index is currently trading modestly above the day’s opening price, with momentum surging subsequent to the latest US sales release. The Core Retail Sales rose 1.1%, more than double Wall Street’s expectations, and the Retail Sales Index rose 0.7%. The release is likely to put the FOMC at ease and refrain them from cutting interest rates.
Dollar traders will be closely monitoring speeches from the FOMC members such as Mr Barkin and President Powell tomorrow evening. Signals of less than 3 cuts in 2024 and no cut in June are likely to continue supporting the Dollar. If the price declines below 1.0640, the exchange is likely to see stronger signals indicating a decline.
Michalis Efthymiou
Market Analyst
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