Weekly research notes covering the full spectrum of asset classes

Market Commentary—17/10/18

October 17, 2018 / Georgios Bitsonis


Stock Market: Today we have the earning release from DELTA, eBay. It is worth mentioning the earnings announcement for Netflix, which was better than expected. The incident triggered the recovery of Nasdaq. In terms of earnings, we expect to see the Alphabet on the 25thof October,  Facebook and Apple on the 30thof October and Tesla on the 31stof October. These results will give us a sign of the American economy and will tell us whether the S&P 500 will remain higher than the 200-days-moving-average at the 2,766.54 level.

Additionally, the fact that we didn’t see a safe haven flow massively increase concurrently with the correction of the S&P 500 in the previous days is reassuring, and it is very probable that we will see a full recovery of the index at a level of 3,000  in the coming days.

A very interesting article by CNBC with the title: Trump says Fed is his “biggest threat” because it is raising rates too fast. The article indicates the conflict between the American president and the chairman of the FED accusing him that he raises rates too quickly. Trump believes that the American economy has begun to slow down and thus brings into question the hikes of interest rates. Through this statement, he his trying to protect the equity market.

Commodities: The WTI jumps above $72 after a surprise crude draw—After three weeks of crude builds, the API reported on the 16th of October a draw in the latest week. Against expectations of a 2.5 mm barrel build, API reported Crude stocks drew down in the latest week by 2.13 mm barrels, sparking a kneejerk gain in WTI crude back above $72.

Brexit: Today and tomorrow, the 18thof October, will be very intense in terms of Brexit news, as there will be an EU council meeting with potentially interesting movements in the British Pound exchange rate. So, we might see a further decline of the British pound against dollar. Technically speaking, the British Pound against the dollar remains constantly below the 200-days-moving average-indicating that we have a bear market.