BTC Fear & Greed Index Falls on Genesis News and a NASDAQ Index Slide

Key Insights:

  • On Wednesday, bitcoin (BTC) fell by 1.37%. Marking the eighth loss from eleven sessions, BTC ended the day at $16,654.
  • News of Genesis Trading freezing redemptions and the NASDAQ Composite Index sent BTC and the broader crypto market into the red.
  • The Bitcoin Fear & Greed Index fell from 23/100 to 20/100 as contagion fear resurfaced.

On Wednesday, bitcoin (BTC) fell by 1.37%. Partially reversing a 1.56% gain from Tuesday, BTC ended the day at $16,654. Notably, ended the day at sub-$17,000 for the sixth time since 2020.

A mixed start to the day saw BTC rise to an early high of $17,002. However, coming up short of the First Major Resistance Level (R1) at $17,164, BTC fell to a mid-afternoon low of $16,347. BTC fell through the First Major Support Level (S1) at $16,575 before wrapping up the day at $16,654.

US economic indicators failed to provide support, despite a 1.3% jump in retail sales. News of Genesis suspending redemptions hit the wires ahead of the retail sales numbers, sending the BTC deeper into the red.

Adding to the market angst were updates from Target Corp (TGT) and Micron Tech (MU), which left the US equity markets in negative territory. NASDAQ-listed Micron Tech (MU) announced plans to reduce memory chip supplies and make more cuts to its capital spending plans.

Later today, US jobless claims and Philly Fed Manufacturing numbers could influence. However, further signs of contagion would overshadow positive stats and a NASDAQ Index recovery of Wednesday’s losses. This morning, the NASDAQ mini was up 39.5 points.

NASDAQ correlation.
NASDAQ – BTCUSD 171122 5 Minute Chart

The Fear & Greed Index Falls Deeper into the Extreme Fear Zone

Today, the Fear & Greed Index fell from 23/100 to 20/100. The news of Genesis Trading freezing redemptions weighed on investor sentiment mid-week. Contagion risk remains a significant risk to the crypto market near term, leaving investors sensitive to news of freezes.

However, the Index avoided sub-20 despite the Genesis news, suggesting investor resilience. The Binance recovery fund and interest in backing the fund likely limited the damage.

Attending a conference in Abu Dhabi, Binance CEO CZ reportedly said,

“There are players that have strong financials and we should band together; we’ve got significant interest so far.”

CZ did not provide names of institutions or exchanges or details of the recovery fund in terms of the mechanism, such as current size and qualification criteria.

However, CZ did say that more details about the fund will be available over the next two weeks.

The Index would need to avoid sub-20/100 to support a return to 40 and a move into the neutral zone. However, a fall to sub-20/100 would see BTC face the risk of sub-$10,000.

Fear & Greed Index avoids sub-20
Fear & Greed 171122

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.10% to $16,671. A range-bound start to the day saw BTC fall to an early low of $16,650 before rising to a high of $16,700.

BTC finds early support.
BTCUSD 171122 Daily Chart

Technical Indicators

BTC needs to avoid the $16,668 pivot to target the First Major Resistance Level (R1) at $16,988 and the Wednesday high of $17,002. A return to $17,000 would signal a bullish session. However, the direction will hinge on FTX updates, contagion news, and US stats.

In the case of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,323 and resistance at $17,500.

The Third Major Resistance Level (R3) sits at $17,978.

A fall through the pivot would bring the First Major Support Level (S1) at $16,333 into play. Barring another extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,013 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $15,358.

BTC resistance levels in play above the pivot.
BTCUSD 171122 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $17,301. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($16,988) would give the bulls a run at the 50-day EMA ($17,301) and R2 ($17,323). However, failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,333) in view.

BTC EMAs bearish
BTCUSD 171122 4 Hourly Chart

Crypto Market Daily Highlights – MATIC and XRP Fall on Genesis News

Key Insights:

  • It was a bearish Wednesday session for the crypto top ten, with polygon (MATIC) leading the way.
  • News of Genesis Trading freezing redemptions reignited contagion fear, with a bearish NASDAQ Index session adding to the negative mood.
  • The crypto market cap fell by $12.5 billion to end the day at $790.3 billion.

It was a bearish Wednesday session for the crypto top ten. Polygon (MATIC) led the way down. BTC fell for the eighth session in eleven. Notably, BTC ended the day at sub-$17,000 for the sixth time since 2020.

News of Genesis Trading suspending redemptions and new loan originations reignited contagion fear. Genesis follows BlockFi and Liquid, who froze withdrawals due to the collapse of FTX.

However, the market reaction to the news was relatively muted when considering the increased risk of more platforms to follow. On Wednesday, Binance CEO CZ looked to calm market jitters by providing an update on the recovery fund. The Binance CEO said,

“There are players that have strong financials and we should band together; we’ve got significant interest so far.”

However, details remained scarce, with the Binance CEO holding back details of interested parties.

Looking beyond the crypto market, the NASDAQ Composite Index fell by 1.54%, adding further pressure on the crypto market. US retail sales figures failed to provide support, despite an unexpected 1.3% jump in spending.

Micron Tech (MU) weighed on the NASDAQ on chip supply and capital spending updates. Target Corp (TGT) added to the bearish sentiment, forecasting weak sales for the holiday quarter.

NASDAQ correlation.
Total Market Cap – NASDAQ – 171122 5 Minute Chart

Crypto Market Slides on Genesis News and NASDAQ Pullback

It was a bearish Wednesday session. The crypto market rose to an early high of $813.2 billion before sliding to a low of $775.1 billion.

Contagion fear resurfaced to reverse gains from the previous two sessions.

While recovering from sub-$780 billion, the market cap fell by $12.5 billion to end the day at $790.3 billion. The Wednesday slide left the market cap down $179 billion in November.

Crypto market falls back to sub-$800 billion.
Total Market Cap 171122 Daily Chart

The Crypto Market Movers and Shakers from the Top Ten and Beyond

It was a bearish Wednesday session for the crypto top ten.

MATIC led the way down, sliding by 4.20%, with ETH (-2.92%) and XRP (-3.35%) struggling.

ADA (-1.48%), BNB (-1.81%), BTC (-1.37%), and DOGE (-1.72%) also saw red.

From the CoinMarketCap top 100, it was a mixed session.

Trust wallet token (TWT) led the way, rallying by 11.90%. Aptos (APT) and chiliz (CHZ) were also among the front runners, rising by 3.69% and 6.06%, respectively.

However, maker (MKR) led the way down, falling by 6.46%, with kava (KAVA) and cronos (CRO) seeing losses of 4.51% and 4.34%, respectively.

24-Hour Liquidations Hold Steady Despite Bearish Session

Over 24 hours, total liquidations held at below-usual levels despite contagion fear resurfacing. At the time of writing, 24-hour liquidations stood at $62.13 million versus $69.38 million on Wednesday morning.

Liquidated traders over the last 24 hours also held steady. At the time of writing, liquidated traders stood at 28,735 versus 27,924 on Wednesday morning. Liquidations were down over 12 hours while up over four hours and one hour.

Crypto liquidations hold steady.
Total Crypto Liquidations 171122

According to Coinglass, 12-hour liquidations fell from $41.79 million to $38.35 million. However, four-hour liquidations rose from $2.78 million to $5.59 million, with one-hour liquidations up from $0.444 million to $3.02 million.

The chart below shows market conditions throughout the session.

Crypto market finds late support.
Total Market Cap 171122 Hourly Chart

5 Things to Know in Crypto Today – Genesis and the NASDAQ Index Weigh

Key Insights:

  • Genesis announced the suspension of redemptions and new loans.
  • Binance CEO CZ talks of significant interest in the recovery fund.
  • US retail sales beat expectations, while Target (TGT) delivers a grim holiday season forecast.

Genesis Announces Suspension of Crypto Lending and Redemptions

The collapse of FTX took another bite out of the crypto market today. This afternoon, Genesis Trading announced the temporary suspension of redemptions and new loan originations in the lending business.

Genesis blamed the collapse of FTX for the unprecedented market turmoil, leading to irregular withdrawal requests that exceeded the platform’s available liquidity.

Despite the cushion of the Binance recovery fund, investors responded adversely to the news that preceded US retail sales figures for October.

Following the news of BlockFi and FTX-Linked Liquid freezing withdrawals, the latest announcement raises the possibility of more platforms suspending withdrawals.

After enjoying a two-day winning streak, the crypto market was down $17.1 billion to $785.7 billion in response to the news and market reaction to the latest US retail sales figures.

Crypto market slides on Genesis news and NASDAQ fall.
Crypto Market Cap 171122 Daily Chart

US Retail Sales Overshadowed by Target Q4 Sales Forecast

US Retail Sales jumped by 1.3% in October after stalling in September. Economists forecast a 1.0% increase.

However, Target Corp (TGT) weighed on investor sentiment, forecasting slowing demand over the holiday quarter. The unexpected forecast followed a Q3 earnings miss, leaving TGT down 13.06% for the session.

Adding to the bearish mood was news of Micron Tech (MU) reducing memory chip supplies and plans to make more cuts to its capital spending plans. The NASDAQ Composite Index ended the day with a 1.54% loss, which added to the crypto market’s bearish mood.

NASDAQ correlation.
Crypto Market NASDAQ 171122 5 Minute Chart

Binance CEO CZ Tells of Significant Interest in the Recovery Fund

On Wednesday, Binance CEO CZ updated the markets on the recently launched Recovery Fund. Attending a conference in Abu Dhabi, CZ reportedly said,

“There are players that have strong financials and we should band together; we’ve got significant interest so far.”

CZ did not provide names of institutions or exchanges or details of the recovery fund. Details such as the size of the fund and the qualification criteria remain vague.

However, CZ did say that more details about the fund will be available over the next two weeks.

Amidst the current market turmoil, the FIFA 2022 World Cup show must go on.

Today, Binance also announced the November 18 first-ever Christiano Ronaldo NFT drop on Binance.

FTX Fallout Hits Celebrity Endorsers

This week, Plaintiff Edwin Garrison filed a class action lawsuit against former FTX CEO Sam Bankman-Fried and a group of individuals accused of endorsing FTX. The class-action suit lists Tom Brady, Gisele Bundchen, Stephen Curry, Shaquille O’Neal, Naomi Osaka, and Kevin O’Leary as co-defendants.

In October, Kim Kardashian settled with the SEC on charges of touting a crypto asset security by paying $1.26 million in penalties.

Senate Banking Committee Targets Former FTX CEO

According to news reports, the Senate Banking Committee is following in the footsteps of the House Financial Service Committee with plans to hold a hearing on FTX, which will involve Alameda and Bankman-Fried.

According to Reuters, the Financial Services Committee Chair Maxine Waters said,

“The fallout of FTX has posed tremendous harm to over one million users, many of whole were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it disappear within a matter of seconds.”

 

5 Things to Know in Crypto Today – XRP Joins the Market Recovery

Key Insights:

  • XRP and the broader crypto market are in recovery after the Fed Chair Powell-fueled sell-off on Wednesday.
  • Arweave (AR), Litecoin (LTC), and polygon (MATIC) lead a bullish morning session.
  • Crypto Winter news continues to hit the wires, however.

XRP Joins the Broader Crypto Market in Recovery Mode

On Wednesday, Fed Chair Powell wiped $41 billion off the crypto market cap in a few hours. Powell poured cold water on investor hopes of a December Fed pivot. The Fed Chair warned the markets of high inflation and the need to continue with aggressive policy moves to bring inflation to target.

Riskier assets found buyer support this morning. The crypto market is on track to reverse a $20.8 billion loss from the Wednesday session.

However, market volatility will likely pick up later today. US economic indicators could support Powell’s more hawkish stance. We expect the ISM Non-Manufacturing PMI and its sub-components to draw the most investor interest.

A pickup in hiring and prices could test today’s bullish sentiment.

While arweave (AR), litecoin (LTC), and polygon (MATIC) lead the way, XRP is also on the move. Hopes of a favorable outcome to the SEC v Ripple case continue to limit the downside.

This morning, the crypto market was up $15.2 billion to $966.8 billion, with XRP up 1.26% to $0.4559.

Crypto market in recovery.
Total Market Cap 031122 Daily Chart

Polygon (MATIC) Responds to News of Instagram NFTs

On Wednesday, Meta (META) updated a May 2022 announcement, stating,

“Creators will soon be able to make their own digital collectibles on Instagram and sell them to fans, both on and off Instagram.”

The announcement went on to say,

“They’ll have an end-to-end toolkit – from creation (starting on the Polygon blockchain) and showcasing, to selling.”

Investors responded favorably to the news, with MATIC up 10.64% to $0.9659 this morning.

MATIC on the move.
MATICUSD 031122 Daily Chart

JPMorgan Executes DeFi Trade on Public Blockchain in Singapore

On November 2, the Monetary Authority of Singapore announced the completion of its first live trades under Project Guardian, which ‘explores potential decentralized finance (DeFi) applications in wholesale funding markets.’

According to the announcement,

“DBS Bank, JP Morgan (JPM), and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising of tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (Yen), and Singapore Dollar (SGD).”

Robinhood (HOOD) Sees Revenue Fall 12% in Q3 2022

On Tuesday, Robinhood (HOOD) released its Q3 2022 results. According to the press release, cryptocurrency transaction-based revenues fell 12%, while revenues increased for options (10%) and equities (7%).

While transaction-based revenues fell, Robinhood enhanced user experiences in the quarter. Notably, the report stated,

“Robinhood rolled out the beta version of Robinhood Wallet, our self-custody, web3 wallet to the first ten thousand customers on the waitlist. The approachable, standalone app gives customers total control of their crypto, allowing them to trade and swap with no network fees.”

In the quarter, Robinhood also expanded its coin listings to include USD Coin (USDC), cardano (ADA), uniswap (UNI), stellar lumen (XLM), and avalanche (AVAX).

Dapper Labs Announces 22% Reduction Citing Macroeconomic Factors

This morning, Founder and CEO of Dapper Labs Roham Gharegozlou announced a 22% cut in the Dabber Labs workforce. In the announcement, the Dapper Labs CEO said,

“These reductions are the last thing we want to do, but they are necessary for the long-term health of our business and communities. We know web3 and crypto is the future across a multitude of industries – with 1000x potential from here in terms of mainstream adoption and impact— but today’s macroeconomic environment means we aren’t in full control of the timing.”

The announcement coincided with news of NBA Top Shot having its worst month since 2020. According to CryptoSlam, sales totaled $2.68 million in October 2022, down from $4.68 million in September. October sales were the lowest since $0.87 million in December 2020. Sales peaked in February 2021 at $224.07 million.

 

SHIB Eyes $0.00001010 to Target $0.00001050, with DOGE on the Move

Key Insights:

  • It was a mixed Friday session, with dogecoin (DOGE) bucking the broader market trend with a modest 0.13% loss.
  • News of Netflix and Amazon.com accepting SHIB delivered a bullish session.
  • The technical indicators remain bearish, with Fed fear lingering despite Friday’s chatter.

On Friday, dogecoin (DOGE) slipped by 0.13%. Partially reversing a 1.25% gain from Thursday, DOGE ended the day at $0.05934.

A bearish morning saw DOGE fall from an early high of $0.05951 to a mid-day low of $0.05714. DOGE fell through the First Major Support Level (S1) at $0.0583 and the Second Major Support Level (S2) at $0.0572. However, steering clear of sub-$0.0570, DOGE revisited $0.05950 before easing back.

Shiba inu coin (SHIB) rose by 1.21% on Friday. Following a 0.51% gain on Thursday, SHIB ended the day at $0.00001003.

A choppy start to the day saw SHIB fall through the First Major Support Level (S1) at $0.00000976 to a mid-day low of $0.00000960. Finding support at the Second Major Support Level (S2) at $0.00000960, SHIB rallied to a late high of $0.00001007 before easing back. Despite the bullish afternoon, SHIB came up short of the First Major Resistance Level (R1) at $0.00001010.

Market angst from US economic indicators on Thursday continued to weigh on the crypto market going into the Friday session. However, sentiment shifted throughout the afternoon. Less hawkish FOMC member chatter and US Treasury Secretary Janet Yellen provided riskier assets with much-needed support.

SHIB received an added boost on news of SHIB holders being able to use SHIB to make payments on Netflix (NFLX) and Amazon.com (AMZN).

On Friday, French Connection Finance (FCF) announced that Visa (V) card holders can make payments on Amazon and Netflix with SHIB, among other coins.

Dogecoin (DOGE) Price Action

At the time of writing, DOGE was up 0.19% to $0.05945. A mixed start to the day saw DOGE fall to an early low of $0.05929 before rising to a high of $0.05994.

DOGE finds early support.
DOGEUSD 221022 Daily Chart

Technical Indicators

DOGE needs to avoid the $0.0587 pivot to target the First Major Resistance Level (R1) at $0.0602. Twitter (TWTR) news updates and a pickup in investor appetite would support a return to $0.0600.

In the case of an extended crypto market rally, DOGE should test the Second Major Resistance Level (R2) at $0.0610 and resistance at $0.0615. The Third Major Resistance Level (R3) sits at $0.0634.

A fall through the pivot would bring the First Major Support Level (S1) at $0.0578 into play. However, barring another extended crypto sell-off, DOGE should steer clear of sub-$0.0570 and the Second Major Support Level (S2) at $0.0563. Third Major Support Level (S3) at $0.0539

DOGE resistance levels in play above the pivot.
DOGEUSD 221022 Hourly Chart

The EMAs sent a bearish signal, with DOGE sitting below the 50-day EMA, currently at $0.05949. The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The price signals were bearish.

A move through the 50-day EMA ($0.05949) would give the bulls a run at the 100-day EMA ($0.05998) and R1 ($0.0602). However, failure to move through the 50-day EMA ($0.05949) would leave DOGE under pressure.

EMAs bearish.
DOGEUSD 221022 4 Hourly Chart

Shiba Inu Coin (SHIB) Price Action

At the time of writing, SHIB was down 0.80% to $0.00000995. A mixed start to the day saw SHIB rise to an early high of $0.00001008 before falling to a low of $0.00000994.

SHIB under pressure.
SHIBUSD 221022 Daily Chart

Technical Indicators

SHIB needs to avoid the $0.00000990 pivot to target the First Major Resistance Level (R1) at $0.00001020. However, SHIB would need broader market support to break out from the morning high of $0.00001008.

A broad-based crypto rally would see SHIB test the Second Major Resistance Level (R2) at $0.00001037 and resistance at $0.00001050. The Third Major Resistance Level (R3) sits at $0.00001084.

A fall through the pivot would bring the First Major Support Level (S1) at $0.00000973 into play. Barring an extended sell-off, SHIB should avoid sub-$0.00000950 and the Second Major Support Level (S2) at $0.000000943.

The Third Major Support Level (S3) sits at $0.00000896.

SHIB resistance levels in play above the pivot.
SHIBUSD 221022 Hourly Chart

The EMAs send a bearish signal, with SHIB sitting below the 50-day EMA, currently at $0.00001017. This morning, the 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The signals were bearish.

A move through the 50-day EMA ($0.00001017) and R1 ($0.00001020) would give the bulls a run at R2 ($0.00001037). However, failure to move through the 50-day EMA ($0.00001017) would leave S1 ($0.00000973) in view.

EMAs bearish.
SHIBUSD 221022 4 Hourly Chart

DOGE Faces the Risk of Sub-$0.058, with SHIB Giving Up Early Gains

Key Insights:

  • It was a bullish Thursday session, with dogecoin (DOGE) and shiba inu coin (SHIB) bucking the broader crypto market trend.
  • Tesla’s (TSLA) earnings call delivered price support despite a 6.65% falling share price in response to the quarterly earnings miss.
  • The technical indicators remain bearish, with Fed Fear continuing to suggest further near-term losses.

On Thursday, dogecoin (DOGE) rose by 1.25%. Partially reversing a 1.81% fall from Wednesday, DOGE ended the day at $0.05942.

A bearish start to the day saw DOGE fall to an early low of $0.05822. Steering clear of the First Major Support Level (S1) at $0.0577, DOGE rallied to a late high of $0.06037. DOGE broke through the First Major Resistance Level (R1) at $0.0602 before a return to sub-$0.0600.

Shiba inu coin (SHIB) rose by 0.51% on Thursday. Partially reversing a 3.05% slide from Wednesday, SHIB ended the day at $0.00000991. Notably, SHIB ended the day at sub-$0.000010 for the second time since July 12.

Tracking the broader market, SHIB fell to an early low of $0.00000979. Steering clear of the First Major Support Level (S1) at $0.00000947, SHIB rose to an early afternoon high of $0.00001013. However, coming up short of the First Major Resistance Level (R1) at $0.00001021, SHIB fell back to sub-$0.000010.

Meme coins were at the mercy of the Tesla (TSLA) earnings results this week. While Tesla missed estimates, the numbers still upbeat, delivering DOGE and SHIB price support.

YoY, revenue increased by 56% to $21.45 billion versus analyst estimates of $21.96 billion. However, Tesla beat the earnings estimate of $1.01 with an EPS of $1.05. Elon Musk delivered an optimistic outlook, which may have failed to support the share price but limited the damage in a challenging macroeconomic environment.

On Thursday, Tesla fell by 6.65% to end the day at $207.28.

Following the earnings result, the market focus will return to the Twitter (TWTR) acquisition. Progress toward a buyout should provide DOGE and SHIB price support. During the Tesla earnings call, Musk reportedly said,

“Although, obviously, myself and other investors are obviously overpaying for Twitter right now, the long-term potential for Twitter, in my view, is an order of magnitude greater than its current value.”

Dogecoin (DOGE) Price Action

At the time of writing, DOGE was down 0.80% to $0.05895. A mixed start to the day saw DOGE rise to an early high of $0.05951 before falling to a low of $0.05871.

DOGE under early pressure.
DOGEUSD 211022 Daily Chart

Technical Indicators

DOGE needs to move through the $0.0593 pivot to target the First Major Resistance Level (R1) at $0.0605. Progress toward the acquisition of Twitter and a shift in investor sentiment would support a breakout session.

In the case of an extended crypto market rally, DOGE should test the Second Major Resistance Level (R2) at $0.0615 and resistance at $0.0620. The Third Major Resistance Level (R3) sits at $0.0636.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.0583 in play. However, barring an extended crypto sell-off, DOGE should steer clear of sub-$0.0575 and the Second Major Support Level (S2) at $0.0572. Third Major Support Level (S3) at $0.0550.

DOGE support levels in play below the pivot.
DOGEUSD 211022 Hourly Chart

The EMAs sent a bearish signal, with DOGE sitting below the 50-day EMA, currently at $0.05961. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The price signals were bearish.

A move through the 50-day EMA ($0.05961) would give the bulls a run at the 100-day EMA ($0.06009) and R1 ($0.0605). However, failure to move through the 50-day EMA ($0.05961) would leave DOGE under pressure.

EMAs bearish.
DOGEUSD 211022 4 Hourly Chart

Shiba Inu Coin (SHIB) Price Action

At the time of writing, SHIB was up 0.40% to $0.00000995. A choppy start to the day saw SHIB slide to an early low of $0.00000976 before rising to a high of $0.00001004.

The First Major Support Level (S1) at $0.00000976 delivered early support.

SHIB finds early support.
SHIBUSD 211022 Daily Chart

Technical Indicators

SHIB needs to avoid the $0.00000994 pivot to target the First Major Resistance Level (R1) at $0.00001010 and the Thursday high of $0.00001013. However, SHIB would need broader market support to break out from the morning high of $0.00001004.

A broad-based crypto rally would see SHIB test the Second Major Resistance Level (R2) at $0.00001028 and resistance at $0.00001030. The Third Major Resistance Level (R3) sits at $0.00001062.

A fall through the pivot would bring the First Major Support Level (S1) at $0.00000976 back into play. Barring an extended sell-off, SHIB should avoid sub-$0.00000970 and the Second Major Support Level (S2) at $0.000000960.

The Third Major Support Level (S3) sits at $0.00000926.

SHIB resistance levels in play above the pivot.
SHIBUSD 211022 Hourly Chart

The EMAs send a bearish signal, with SHIB sitting below the 50-day EMA, currently at $0.00001022. This morning, the 50-day EMA fell back from the 100-day EMA, with the 100-day EMA sliding back from the 200-day EMA. The signals were bearish.

A move through R1 ($0.00001010) and the 50-day EMA ($0.00001022) would support a run at $0.00001028. However, failure to move through the 50-day EMA ($0.00001022) would leave S1 ($0.00000976) in view.

EMAs bearish.
SHIBUSD 211022 4 Hourly Chart

BTC Fear & Greed Index Targets the Fear Zone Despite a Bearish BTC

Key Insights:

  • On Tuesday, bitcoin (BTC) ended a mini two-day winning streak, falling by 1.13% to $19,334.
  • Better-than-expected US economic indicators left BTC in the red, while upbeat corporate earnings supported another bullish session for the NASDAQ 100.
  • The Bitcoin Fear & Greed Index rose from 22/100 to 23/100, reflecting investor resilience.

On Tuesday, bitcoin (BTC) fell by 1.13%. Partially reversing a 1.49% gain from Monday, BTC ended the day at $19,334. Notably, BTC fell short of $20,000 for the eleventh consecutive session while avoiding a return to sub-$19,000 for a Third session.

A bullish start to the day saw BTC rise to a mid-morning high of $19,709. Coming up short of the First Major Resistance Level (R1) at $19,770, BTC slid to a late low of $19,100. BTC fell through the First Major Support Level (S1) at $19,252 before a partial recovery to end the day at $19,334.

US economic indicators weighed on BTC and the broader crypto market. Industrial production increased by 0.4% in September, reversing a 0.1% decline from August. Economists forecast a 0.1% rise. After an initial increase upon release of the numbers, the market reaction was evident in the chart below.

Chart Description automatically generated

US corporate earnings failed to support a rebound, despite better-than-forecast results from Goldman Sachs (GS), Johnson & Johnson (JNJ), and Lockheed Martin (LMT).

While failing to provide crypto market support, upbeat earnings and positive US stats delivered another bullish session for the NASDAQ 100. On Tuesday, the NASDAQ rose by 0.90%.

Today, US economic indicators should have a muted impact on Fed monetary policy and the crypto market. Housing sector numbers should leave the Fed in focus. This morning, the NASDAQ Mini was up 152 points.

NASDAQ correlation.
NASDAQ – BTCUSD 191022 5 Minute Chart

The Fear & Greed Index Inches Higher Again Despite BTC Loss

Today, the Fear & Greed Index rose from 22/100 to 23/100. The increase was modest, with BTC falling short of $20,000 for an eleventh consecutive session. Notably, the Index increased while BTC ended the day in the red.

Neither the Index nor BTC have managed to break free of recent ranges, with Fed fear continuing to deliver economic uncertainty.

For the bulls, the Index will need to continue avoiding sub-20/100 to support a shift in sentiment. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Fear & Greed Index lacks direction.
Fear & Greed 191022

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.16% to $19,303. A mixed start to the day saw BTC rise to an early high of $19,361 before falling to a low of $19,293.

BTC under early pressure.
BTCUSD 191022 Daily Chart

Technical Indicators

BTC needs to move through the $19,381 pivot to target the First Major Resistance Level (R1) at $19,662 and the Tuesday high of $19,709. A BTC move through the Tuesday high of $19,709 would signal a bullish session. However, FOMC member chatter needs to be crypto-friendly to support a breakout.

In the case of an extended rally, the Second Major Resistance Level (R2) at $19,990 and $20,000 would likely come into play. The Third Major Resistance Level (R3) sits at $20,599.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,053 in play. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,772 should limit the downside.

The Third Major Support Level (S3) sits at $18,163.

BTC support levels in play below the pivot.
BTCUSD 191022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,346.

The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA to deliver bearish signals.

BTC needs to move through the 50-day EMA and the 100-day EMA ($19,399) to target the 200-day EMA ($19,618) and R1 ($19,662). However, failure to move through the 50-day EMA ($19,346) would leave the S1 ($19,053) in view.

EMAs bearish.
BTCUSD 191022 4 Hourly Chart

ETH Targets $1,400, with BTC Eying $20,000 as Focus Returns to Earnings

Key Insights:

  • After a bullish Monday session, bitcoin (BTC) and Ethereum (ETH) found further price support this morning.
  • A further pickup in market risk appetite delivered support, while Fed fear continued to prevent a breakout.
  • However, the technical indicators remain bearish, with central bank monetary policy and economic uncertainty testing buyer appetite outside the current ranges.

On Monday, bitcoin (BTC) gained 1.49%. Following a 1.03% rise on Sunday, BTC ended the day at $19,554. Notably, BTC fell short of $20,000 for the tenth consecutive session while avoiding a return to sub-$19,000 for a second session.

A bearish start to the day saw BTC fall to an early low of $19,166. Steering clear of the First Major Support Level (S1) at $19,080, BTC rose to an early afternoon high of $19,684.

BTC broke through the First Major Resistance Level (R1) at $19,441 and the Second Major Resistance Level (R2) at $19,615. However, falling short of $20,000, BTC slipped back through R2 to end the day at $19,554.

Ethereum (ETH) rose 1.99% on Monday. Following a 2.43% gain on Sunday, ETH ended the day at $1,332.

A bearish start to the day saw ETH fall to an early morning low of $1,295. Steering clear of the First Major Support Level (S1) at $1,282, ETH rallied to a late high of $1,339. ETH broke through the First Major Resistance Level (R1) at $1,323. However, coming up against the Second Major Resistance Level (R2) at $1,340, ETH eased back to end the day at $1,332.

On Monday, the UK Chancellor announced a reversal of the mini-budget, easing pressure on UK Gilts and delivering support to the Pound and riskier assets. US corporate earnings also provided support. Bank of America (BAC) and Bank of New York Mellon (BK) released positive earnings results.

The upswing in interest rates led to a boost in net interest income. The NASDAQ 100 led the way, rallying by 3.43%, with the Dow and S&P 500 seeing gains of 1.86% and 2.65%, respectively. This morning, the NASDAQ Mini was up 140 points, pointing to another bullish US session.

US economic indicators, FOMC member chatter, and corporate earnings will influence today. Big names delivering earnings results include Goldman Sachs (GS).

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.09% to $19,537.

A mixed morning saw BTC fall to an early low of $19,492 before rising to a high of $19,709.

BTC sees a choppy morning.
BTCUSD 181022 Daily Chart

Technical Indicators

BTC needs to avoid the $19,468 pivot to retarget the First Major Resistance Level (R1) at $19,770. A BTC return to $19,700 would signal a bullish afternoon session. However, following the upbeat earnings results on Monday, more of the same would support another breakout session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $19,986 and $20,000 would likely come into play. The Third Major Resistance Level (R3) sits at $20,504.

A fall through the pivot would bring the First Major Support Level (S1) at $19,252 into play. Barring an extended sell-off, BTC should avoid sub-$19,000 and the Second Major Support Level (S2) at $18,950.

The Third Major Support Level (S3) sits at $18,432.

BTC resistance levels in play above the pivot.
BTCUSD 181022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 100-day EMA, currently at $19,406.

The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA to deliver bullish signals.

BTC needs to move through the 200-day EMA ($19,631) and R1 ($19,770) to target R2 ($19,986) and $20,000. However, a fall through the 100-day EMA ($19,406) would bring the 50-day EMA ($19,352) and S1 ($19,252) into view.

EMAs bullish.
BTCUSD 181022 4 Hourly Chart

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.80% to $1,321. A mixed morning saw ETH rise to an early high of $1,342 before falling to a low of $1,319.

ETH under morning pressure.
ETHUSD 181022 Daily Chart

Technical Indicators

ETH needs to avoid the $1,322 pivot to retarget the First Major Resistance Level (R1) at $1,349. However, investor sentiment would need to remain bullish to support a breakout from the morning high of $1,342.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,366 and $1,400 would likely come into play. The Third Major Resistance Level (R3) sits at $1,410.

A fall through the pivot would bring the First Major Support Level (S1) at $1,305 into view. However, barring another crypto sell-off, ETH should avoid sub-$1,290 and the Second Major Support Level (S2) at $1,278.

The Third Major Support Level (S3) sits at $1,234.

ETH resistance levels in play above the pivot.
ETHUSD 181022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above 100-day EMA, currently at $1,319. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A move through R1 ($1,349) would give the bulls a run at the 200-day EMA ($1,364) and R2 ($1,366). However, a fall through the 100-day EMA ($1,319) would give the bears a run at the 50-day EMA ($1,308) and S1 ($1,305).

EMAs bullish.
ETHUSD 181022 4 Hourly Chart

ETH and BTC and Returns to Sub-$1,250 and $18,500 in the Fed’s Hands

Key Insights:

  • After Monday’s bearish session, bitcoin (BTC) and ethereum (ETH) were back in the red this morning.
  • Fed fear and the likely effects of Fed monetary policy on the global economy continue testing crypto investor sentiment.
  • The technical indicators remain bearish ahead of this week’s US CPI report.

On Monday, bitcoin (BTC) fell by 1.63%. Reversing a 0.13% rise from Sunday, BTC ended the day at $19,128. The bearish session left BTC short of $20,000 for the third session in a row, while BTC also managed to avoid sub-$19,000.

A bullish start to the day saw BTC strike an early high of $19,527. However, falling short of the First Major Resistance Level (R1) at $19,556, BTC slid to a late low of $19,000. BTC fell through the First Major Support Level (S1) at $19,329 and the Second Major Support Level (S2) at $19,214 to end the day at $19,128.

Ethereum (ETH) fell by 2.49%. Reversing a 0.53% gain from Sunday, ETH ended the day at $1,290.

Tracking the broader market, ETH rose to an early high of $1,338. ETH broke through the First Major Resistance Level (R1) at $1,332 before sliding to a final-hour low of $1,288.

The extended sell-off saw ETH fall through the First Major Support Level (S1) at $1,310 and the Second Major Support Level at $1,298 to end the day at $1,290.

External market forces sent the BTC, ETH, and the broader crypto market into negative territory. This morning, the narrative remained the same. Fears of an escalation in the war in Ukraine, Fed monetary policy, inflation, and economic uncertainty weighed on riskier assets.

Overnight, Fed Vice President Brainard and JPMorgan Chase & Co (JPM) CEO Jamie Dimon delivered their views on the economic outlook. Neither painted a rosy picture, with Dimon talking of the likelihood of the US and global recessions in six to nine months.

The negative tones contribute to the bearish Monday session and this morning’s pullback.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.14% to $19,102. A bearish morning saw BTC fall from an early high of $19,127 to a low of $18,957 before recovering.

BTC under pressure.
BTCUSD 111022 Daily Chart

Technical Indicators

BTC needs to move through the $19,218 pivot to target the First Major Resistance Level (R1) at $19,437 and the Monday high of $19,527. A BTC return to $19,500 would signal a bullish session. However, FOMC member chatter will need to be less hawkish to support a breakout session.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $19,745 to target $20,000. The Third Major Resistance Level (R3) sits at $20,272.

Failure to move through the pivot would likely see BTC test the First Major Support Level (S1) at $18,910. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,691 should limit the downside.

The Third Major Support Level (S3) sits at $18,164.

BTC support levels in play below the pivot.
BTCUSD 111022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,506.

On Monday, the 50-day EMA crossed through the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The bearish cross and the 100-day EMA pullback delivered bearish price signals.

Following Monday’s bearish cross, BTC would need to move through R1 ($19,437) and the 50-day EMA ($19,506) to ease selling pressure. However, failure to move through the 50-day EMA ($19,506) would leave sub-$19,000 support levels in play.

EMAs bearish.
BTCUSD 111022 4 Hourly Chart

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.26% to $1,287. A bearish start to the day saw ETH fall from an early high of $1,290 to a low of $1,267 before recovering.

ETH briefly fell through the First Major Support Level (S1) at $1,273.

ETH under early pressure.
ETHUSD 111022 Daily Chart

Technical Indicators

ETH needs to move through the $1,305 pivot to target the First Major Resistance Level (R1) at $1,323 and the Monday high of $1,338. However, investor sentiment would need to improve to support a return to $1,300.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,355 would likely come into play. The Third Major Resistance Level (R3) sits at $1,405.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,273 in play. Barring an extended US session sell-off, ETH should avoid sub-$1,250. The Second Major Support Level (S2) at $1,255 should limit the downside. However, updates from Ukraine and FOMC member chatter could put ETH under more pressure.

The Third Major Support Level (S3) sits at $1,205.

ETH support and resistance levels in play below the pivot.
ETHUSD 111022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below 50-day EMA, currently at $1,323. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,323) and the 50-day EMA ($1,323) would give the bulls a run at the 100-day EMA ($1,342) and R2 ($1,355). However, failure to move through the 50-day EMA ($1,323) would leave the support levels in play.

EMAs bearish.
ETHUSD 111022 4 Hourly Chart

Inflation, the Fed, and the War Spell More Pain for US Equities

The US equity markets are under pressure, with investors unable to shake off the Fed effect. In the third quarter, the NASDAQ fell by 4.11%. Notably, the NASDAQ extended its losing streak to three consecutive quarters, its worst since 2008.

Things have not gotten any better going into the final quarter of the year. After a brief hiatus into positive territory, the NASDAQ 100 is back in the red. Market sensitivity toward US economic indicators and FOMC member chatter is unwavering.

FederalWatch Tool Highlights More Bullish December Bets

Economic data from the first week of October has cemented bets of a 75-basis point Fed rate hike in November.

According to the CME Group’s FedWatch Tool, the probability of a 75-basis point hike is 76.5%. While down from a post-US jobs report of 81.1%, the numbers remain conclusive. However, with the markets accepting a hawkish November move, the focus has shifted to the December policy decision.

This morning, the probability of a 75-basis point December hike stands at 28.1%. The chances of a 75-basis point hike have risen from 0.2% as of October 4 and 0% as of September 30.

December bets on the rise for 75-basis point hike
FEDWatch Tool 111022

Notably, economic data continues painting a rosy economic backdrop that allows the Fed to front load at a more aggressive pace. The Fed and the markets are well aware that once the US unemployment rate inches past 4.0% the rate of deterioration in labor market conditions will likely accelerate, forcing the Fed to take its foot off the gas.

On Monday, Fed Vice Chair Brainard reportedly said that Fed rate hikes were beginning to slow the economy – perhaps more than expected – and that the impact of tighter monetary policy would not be evident for months to come.

Despite Brainard’s impact assessment, the Fed Vice Chair refrained from suggesting the need to take a less aggressive rate path to bring inflation to target.

JPMorgan CEO Jamie Dimon Sounds the Recession Alarm

Fed Vice Chair Brainard’s comments coincided with JPMorgan Chase & Co (JPM) CEO Jamie Dimon, who projected the US and the global economy falling into a recession by mid-2023. Speaking to CNBC,  Dimon said that the US economy is still in good shape while adding,

“But you can’t talk about the economy without talking about stuff in the future – and this is serious stuff.”

Among concerns, Dimon highlighted the effects of inflation, higher-than-expected interest rates, the unknown impact of quantitative tightening, and the war in Ukraine. The JPMorgan CEO also talked of the Fed waiting too long but clearly catching up.

Dimon concluded by saying,

“Far more serious thing is the war. Far more serious than the short-term effects of the economy and things like that.”

JPMorgan Chase will be in the spotlight on Friday when it releases Q3 2022 earnings. Dimon talked of market conditions becoming disorderly in the not-too-distant future. This earnings season could deliver a second blow to a market coming to terms with the Fed’s policy goals.

This morning, the NASDAQ 100 Mini was down 54.5 points, with the Dow Mini and the S&P 500 Mini down by 151 points and 19.75 points, respectively.

Apple Inc. Joins Growing List Responding to Economic Conditions

Overnight, US tech giant and multinational Apple Inc. (AAPL) announced that it would drop plans to increase the production of its new iPhone 14 product suite.

Bloomberg reported that an expected surge in demand failed to materialize, forcing the company to notify suppliers to curtail efforts to increase assembly line output. Apple planned to increase production of the new iPhone 14 product suite by as much as 6 million units in the second half of this year.

Today’s news followed reports of Apple Inc. shifting some iPhone 14 production from China to India. According to Reuters, the shift from China was in response to rising geopolitical tensions and COVID-19 lockdown measures in China that continue to impact output.

The market reaction to the news was bearish. Ahead of the Bloomberg report, the NASDAQ 100 Mini was in positive territory. However, at the time of writing, the NASDAQ 100 Mini was down 142.25 points, with the Dow Jones Mini down 190 points. For the S&P 500, another bearish session would extend the losing streak to seven sessions.

Pre-market, Apple Inc was down 3.70%.

The European markets also responded adversely to the news. Early in the European session, the DAX30 was down 1.60%, with the CAC40 and the EuroStoxx600 down 1.24% and 1.43%, respectively.

Beyond the global equity markets, the crypto market reacted negatively to the news. This morning the crypto market cap was down $17 billion to $878.4 billion. Before the Apple news hit the wires, the crypto market cap had struck an early high of $902.2 billion.

Crypto market reacts to Apple Inc news.
Crypto Market Cap 280922 Daily Chart

Apple Joins Growing List of Multinationals to Sound the Alarm Bells

This morning’s news was one of several as US multinational companies respond to a marked shift in the economic environment. Economic indicators continue to flash red as central banks attempt to tame inflation.

Rising interest rates and persistent inflation amidst a weakening economic outlook have weighed on demand expectations.

In July, Walmart (WMT) spooked the global financial markets with a grim outlook for the quarter and the fullyear. However, shortly after the WMT warning, Apple Inc. and Amazon.com (AMZN) released earnings results and delivered positive outlooks, which were in stark contrast to that of Walmart.

Conditions have deteriorated rapidly since July, with Gap Inc. (GPS) pulling its full-year outlook in August, citing macroeconomic uncertainty as the company searched for a new CEO.

Earlier this month, FedEx (FDX) withdrew its earnings forecasts, citing deteriorating market conditions. FedEx shares tumbled by 21.44% in response to the announcement.

As the list grows longer, market angst will likely build as investors prepare for the earnings season, which kicks off next month.

Cisco Systems Rallies Nearly 5.0% on Strong Earnings in After-hours Trade; Dow Futures Barely Budge

Key Points

  • Cisco’s share price surged in after-market trade on Wednesday following an upbeat earnings update.
  • The company beat top and bottom-line earning expectations in Q4 of the 2021/2022 fiscal year and gave an upbeat outlook.
  • Futures tracking the Dow barely budged in after-market trade.

Cisco Beats Top & Bottom Line Earnings Growth Expectations, Provides Rosey Outlook

Cisco System’s share price jumped in after-market trading hours on Wednesday after the company posted better than expected top and bottom-line earnings results for the fourth quarter of the 2021/2022 fiscal year (FY), and gave an upbeat forecast for earnings growth during the upcoming fiscal year. CSCO shares were last changing hands not far below $49.0, up nearly 5.0% versus Wednesday’s close at $46.66.

Cisco reported adjusted non-GAAP earnings per share (EPS) of $0.83 in Q4 of the latest fiscal year, slightly above analyst forecasts for $0.82 per share on the quarter. Meanwhile, the technology company’s Q4 revenue came in at $13.1 billion, above consensus analyst forecasts for $12.73 billion.

Cisco CEO Chuck Robbins stated that “we had a strong end to our fiscal year thanks to our Q4 performance”. “Our teams executed well in the midst of an incredibly dynamic environment, resulting in the highest full-year non-GAAP earnings per share in the history of the company,” he added.

Cisco said it sees revenue growth at between 4-6% in the coming fiscal year and projected an EPS over that time period of $3.49-$3.56, above the last fiscal year’s EPS of $3.36 a share. Cisco’s revenue outlook is thus more optimistic than analysts, with the consensus bet for earnings growth of 2.2% in the upcoming fiscal year.

Dow Futures Shrug Off Upside in CSCO Shares

Futures tracking the price of the Dow Jones Industrial Average index, of which Cisco makes up about 1.0%, were unmoved in after-market trade near the 34,000 level, having dipped 0.5% on Wednesday as investors digested data showing strong core US retail sales growth in July and slightly dovish-leaning Fed minutes from its July meeting.

CSCO shares, despite their 5.0% after-market rally, continue to trade with losses of around 23% on the year, though are about 18% higher versus earlier annual lows under $41 per share. The company’s share price has been caught up in the midst of a broader US equity market rout, with inflation having this year accelerated and forced major central banks such as the Fed to aggressively raise interest rates.

European Equities: A Week in Review – 03/06/22

The Majors

It was a bearish week for the European majors in the week ending June 3, 2022.

The EuroStoxx600 fell by 0.87%, with the CAC40 and the DAX seeing losses of 0.47% and 0.01%, respectively.

A pickup in inflationary pressure and disappointing private sector PMI figures weighed on the European majors. The pickup in inflationary pressure supported the ECB’s planned shift in monetary policy.

From the US, hawkish FOMC member chatter and nonfarm payrolls added pressure, with the pickup in hiring supporting a more aggressive Fed interest rate path trajectory.

Economic data from China reflected the impact of the prolonged COVID-19 lockdown measures on the economy.

The services and manufacturing sectors continued to contract, albeit at a slower pace. In May, the NBS manufacturing PMI increased from 47.4 to 49.6, with the services PMI up from 41.9 to 47.8.

The all-important Caixin manufacturing PMI rose from 46.0 to 48.1.

The Stats

It was a particularly busy week on the Eurozone economic calendar.

Key stats included private sector PMI and inflation figures for member states and the Eurozone.

A pickup in inflationary pressure, according to prelim figures for May, pressured the majors.

The Eurozone’s annual rate of inflation accelerated from 7.4% to 8.1%.

Private sector PMIs disappointed, however.

In May, the Eurozone’s manufacturing PMI fell from 55.5 to 54.6, with the services PMI down from 57.7 to 56.1. As a result, the composite PMI slipped from 55.8 to 54.9.

On the monetary policy front, bets of a move away from negative rates also tested support.

From the US

In the first half of the week, consumer confidence and manufacturing PMI numbers delivered Dollar support.

The CB Consumer Confidence Index fell from 108.6 to 106.4, while the ISM Manufacturing PMI rose from 55.4 to 56.1. Economists forecast the CB Consumer Confidence Index to fall to 103.9.

On Thursday, ADP nonfarm employment change figures disappointed ahead of the all-important NFP numbers on Friday.

Nonfarm payrolls increased by 390k in May, following a 436k jump in April. Despite the increase, the unemployment rate held steady at 3.6% due to a pickup in the participation rate from 62.2% to 62.3%.

The Market Movers

From the DAX, it was a bullish week for the auto sector. BMW and Volkswagen rose by 2.67% and by 2.92%, respectively. Continental and Daimler saw gains of 1.53% and 2.01%, respectively.

It was a mixed week for the banking sector. Deutsche Bank fell by 1.85%, while Commerzbank rose by 0.99%.

From the CAC, it was also a mixed week for the French banks. Soc Gen gained 0.40%, while Credit Agricole slid by 11.20%. BNP Paribas ended the week down by 1.85%.

The French auto sector had a mixed week. Stellantis NV slipped by 0.03%, while Renault rose by 2.34%.

Air France-KLM slid by 4.74%, with Airbus ending the week down 2.84%.

On the VIX Index

In the week ending June 3, the VIX fell for a fourth week in five.

Following a 12.61% loss from the previous week, the VIX fell by 3.62% to end the week at 24.79.

2-days in the red from 4 sessions, which included a 1.91% decline on Wednesday did the damage.

For the week, the S&P500 fell by 1.20%, with the Dow and the NASDAQ seeing losses of 0.94% and 1.20%, respectively.

VIX
VIX 030622 Weekly Chart

The Week Ahead

It is another busy week on the Eurozone economic calendar.

German factory orders and industrial production figures will draw market interest on Tuesday and Wednesday.

The markets will also look for any revisions to Eurozone GDP numbers on Wednesday ahead of the ECB interest rate decision on Thursday.

With the markets expecting the ECB to leave rates unchanged, the focus will be on ECB President Christine Lagarde and the press conference.

From the US, jobless claims and inflation figures for May will draw plenty of interest. Another spike in inflation would test support for riskier assets.

Economic data from China will also influence. Trade and inflation numbers are due out on Thursday and Friday.

European Equities: A Week in Review – 27/05/22

The Majors

It was a bullish week for the European majors in the week ending May 27, 2022.

The EuroStoxx600 rose by 2.98%, with the CAC40 and the DAX seeing gains of 3.67% and 3.44%, respectively.

Economic data and market sentiment towards Fed monetary policy delivered support in the week.

Market angst over the threat of a recession eased, with economic data from the US showing robust consumer spending in April. Adding support was softer inflation figures at the end of the week.

On Wednesday, the FOMC meeting minutes were also market-friendly, with the minutes suggesting the Fed may take its foot off the gas in the coming months.

From the ECB, ECB President Christine Lagarde talked of an end to negative rates but not much more, which was also market positive.

The Stats

It was a busy first half of the week, with German business and private sector PMIs in focus.

The stats were market positive, with German business sentiment and German manufacturing sector activity delivering support.

Germany’s ifo Business Climate Index increased from 91.9 to 93.0 in May. The manufacturing sector PMI rose from 54.6 to 54.7, according to prelim figures.

For France and the Eurozone, however, the private sector numbers were market negative.

The Eurozone manufacturing PMI fell from 55.5 to 54.4, with the composite declining from 55.8 to 54.9.

Mid-week, German GDP and consumer climate figures failed to impress, with consumer sentiment still weak in June. The second estimate GDP numbers were in line with the first estimate, with the German economy expanding by 0.2% in the first quarter.

From the US

In the first half of the week, private sector PMIs and core durable goods orders were the key stats.

The numbers were skewed to the negative, supporting the negative sentiment towards the economy.

In May, the services PMI fell from 55.6 to 53.5, with core durable goods orders rising by just 0.3%. Core durable goods orders had risen by 1.2% in April.

On Thursday, the stats were also Dollar negative, with the US economy contracting by more than expected.

Inflation and personal spending numbers wrapped things up on Friday.

In April, the core PCE price index increased by 4.9% year-on-year, which was softer than a 5.2% rise in March.

Personal spending increased by a further 0.9% in April, following a 1.4% jump in March.

While the stats influenced, the FOMC meeting minutes on Wednesday also drew plenty of interest. The minutes were hawkish, showing members’ willingness to deliver multiple 50 basis point rate hikes. Aligned with previous Fed Chair Powell’s commentary, members were also willing to move beyond neutral to curb inflation.

The minutes did talk of a shift in policy in the coming months, however, which eased investor fears of a move beyond neutral.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Continental ended the week up by 5.55%, with Volkswagen rising by 4.50%. BMW and Daimler saw gains of 4.29% and 4.30%, respectively.

It was a bullish week for the banking sector. Deutsche Bank and Commerzbank rallied by 11.00% and by 11.60%, respectively.

From the CAC, it was a mixed week for the French banks. Soc Gen and Credit Agricole rose by 1.55% and by 8.28%, respectively, while BNP Paribas slipped by 0.30%.

The French auto sector had a bullish week. Stellantis NV rose by 1.89%, with Renault up 4.18%.

Air France-KLM slumped by 58.72% on rights issue, while Airbus ended the week up 4.62%.

On the VIX Index

In the week ending May-27, the VIX fell for a third week in four, with four days in the red from five sending the VIX into the red.

Reversing a 1.94% gain from the previous week, the VIX slid by 12.61% to end the week at 25.72.

4-days in the red from 5 sessions, which included a 6.47% decline on Friday did the damage.

For the week, the NASDAQ rallied by 6.84%, with the Dow and the S&P500 seeing gains of 6.24% and 6.58%, respectively.

VIX 270522 Weekly Chart

The Week Ahead

It is a busy week on the Eurozone economic calendar.

Early in the week, French GDP and German unemployment figures will draw interest along with member state and Eurozone inflation.

Mid-week finalized Eurozone manufacturing figures will also draw interest.

After a quiet Thursday, German trade data and finalized service PMI and composite PMI figures will influence.

From the US, consumer confidence will be in focus ahead of private sector PMIs on Wednesday and Friday.

The key stats of the week, however, will be nonfarm payrolls and the unemployment rate, which could define the Fed’s next move on interest rates and give further clues on the state of the US economy.

European Equities: A Week in Review – 20/05/22

The Majors

It was a bearish week for the European majors in the week ending May 20, 2022.

The CAC40 slid by 1.22%, with the EuroStoxx600 and the DAX seeing losses of 0.55% and 0.33%, respectively.

A bullish end to the week was not enough for the major bourses, with sentiment towards monetary policy and recession fears leaving the majors in the red.

Economic data from China set a bearish tone from the start of the week, as lockdown measures took their toll.

Rising inflationary pressures, the ongoing war in Ukraine, and a shift in sentiment towards Fed and ECB monetary policy did the damage.

The Stats

Early in the week, trade data and GDP numbers delivered mixed results.

In March, the Eurozone’s trade deficit widened from €7.6bn to €16.4bn, with the war in Ukraine continuing to hit crude oil prices.

Second estimate GDP numbers for the Eurozone were market positive, however. In Q1, the economy grew by 0.3%, up from a first estimate of 0.2%. Year on year, the economy expanded by 5.1%, up from a first estimate of 5.0%.

Finalized inflation figures for the Eurozone had a muted impact mid-week, with the annual rate of inflation easing from 7.5% to 7.4%.

At the end of the week, however, German producer prices for industrial goods surged by 33.5% compared with April 2021, the highest increase on record.

From the EU, downward revisions to economic forecasts weighed on the European equity markets.

For 2022, the European Commission forecasts growth of 2.7% and 2.3% for 2023. While the Commission revised both downwards, the 2022 revision was most marked.

In February, the European Commission forecast growth of 4.0% for 2022 and 2.7% for 2023.

From the ECB, the monetary policy meeting minutes provided few surprises, with the talk of summer rate hikes in line with market expectations.

From the US

Early in the week, retail sales and industrial production figures eased fears of an economic meltdown.

In April, retail sales jumped 2.5%, with industrial production rising by 1.1%.

On Thursday, jobless claims and Philly Fed Manufacturing numbers disappointed, however.

Initial jobless claims rose from 197k to 218k, in the week ending May 13, with the Philly Fed Manufacturing Index falling from 17.6 to 2.6 in May.

While the stats were mixed, Fed Chair Powell tested investor sentiment on Tuesday.

After providing the markets with assurances about larger rate hikes in the week prior, the Fed Chair talked of a willingness to move policy beyond neutral to curb inflation. Powell also discussed some possible pain ahead for the labor market while acknowledging that the Fed should have lifted rates sooner.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Volkswagen and Continental rose by 1.03% and by 0.51%, respectively, while Daimler and BMW saw losses of 1.25% and 0.27%, respectively.

It was a bullish week for the banking sector. Deutsche Bank rose by 0.16%. with Commerzbank ending the week up by 12.60%.

From the CAC, it was also a bullish week for the French banks. Soc Gen rallied by 4.97%, with Credit Agricole and BNP Paribas rising by 0.97% and 2.54%, respectively.

The French auto sector had a mixed week. Stellantis NV slid by 4.97%, while Renault rose by 2.42%.

Air France-KLM jumped by 10.52%, with Airbus ending the week up 0.53%.

On the VIX Index

In the week ending May-20, the VIX ended a two-week losing streak to mark a fifth weekly rise in 7-weeks.

Partially reversing a 4.37% decline from the previous week, the VIX rose by 1.94% to end the week at 29.43.

2-days in the green from 5 sessions, which included an 18.62% jump on Wednesday, delivered the upside.

For the week, the NASDAQ slid by 3.82%, with the Dow and the S&P500 seeing losses of 2.90% and 3.05%, respectively.

VIX 200522 Weekly Chart

The Week Ahead

It is a busier week ahead on the Eurozone economic calendar.

On Monday, Germany’s Ifo business climate index will draw interest ahead of private sector PMI numbers on Tuesday.

While the markets may forgive a weaker business climate index, weak manufacturing PMIs will test support for the majors.

On Wednesday, the German economy will be back in focus with GDP and consumer sentiment to wrap up the week.

From the US, prelim private sector PMIs for May kick things off. With the markets fretting over the risk of a recession, expect the services PMI to be the key.

On Wednesday, core durable goods orders will draw interest ahead of GDP and jobless claims figures on Thursday.

At the end of the week, core PCE price index and personal spending figures will also have a material impact on market risk sentiment.

From the Fed, the FOMC meeting minutes should provide few surprises following recent Fed Chair Powell speeches.

Away from the economic calendar, updates from China on lockdown measures and stimulus and the war in Ukraine will also influence.

European Equities: A Week in Review – 13/05/22

The Majors

It was a bullish week for the European majors in the week ending May-13, 2022.

The DAX rallied by 2.59%, with the EuroStoxx600 and the CAC40 seeing gains of 0.83% and 1.67%, respectively. A Friday Fed Chair Powell induced rally pulled the CAC40 and the EuroStoxx600 into positive territory for the week.

A quiet economic calendar left the markets to consider the impact of persistent inflationary pressure, China’s lockdown measures, and the war in Ukraine on the economic outlook.

While US inflationary pressures softened in April, fears of a global recession spiked in the week. Adding to the market angst were concerns about a more aggressive Fed rate path to policy normalization.

The negative sentiment hit the global financial markets, with the European majors unable to avoid the fallout.

With the war in Ukraine showing no signs of ending and China grappling with the latest COVID-19 breakout, conditions could worsen.

Amidst recession fears, Fed Chair Powell delivered much-needed market support on Friday, however. The Fed Chair assured the markets that larger rate hikes remained off the table despite the latest US inflation numbers. For the DAX, it was the first weekly rise in six weeks.

The Stats

ZEW Economic Sentiment figures for Germany and the Eurozone and Eurozone industrial production figures were the key stats.

In May, economic sentiment improved, with Germany’s ZEW Economic Sentiment Index up from -41.0 to -34.3. The Eurozone’s ZEW Economic Sentiment Index climbed from -43.0 to -29.5.

At the end of the week, industrial production disappointed, however.

In March, industrial production fell by 1.8%. Production rose by a modest 0.5% in February.

From the US

Inflation was back in focus, which caused market turbulence mid-week.

In April, the annual rate of inflation softened from 8.5% to 8.3% versus a forecasted 8.1%. The core annual rate of inflation softened from 6.5% to 6.2%. While softer, inflation was stronger than anticipated, supporting the more hawkish sentiment towards Fed monetary policy.

On Thursday, wholesale inflation also drew attention. In the month of April, the core producer price index increased by 0.4% after a 1.2% rise in March.

Initial jobless claims had a muted impact despite a rise from 202k to 203k in the week ending May-06.

On the monetary policy front, Fed Chair Powell calmed the markets on Friday, assuring that larger rate hikes would remain off the table.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental rallied by 8.22%, with Daimler gaining 3.25%. BMW and Volkswagen saw losses of 1.77% and 1.14%, respectively.

It was a bullish week for the banking sector. Deutsche Bank rose by 0.34%. with Commerzbank ending the week up by 5.07%.

From the CAC, it was also a bullish week for the French banks. BNP Paribas rallied by 3.54%, with Credit Agricole and Soc Gen rising by 3.21% and 3.41%, respectively.

The French auto sector had a bullish week. Stellantis NV rallied by 4.88%, with Renault up 1.86%.

Air France-KLM fell by 1.62%, with Airbus ending the week down 1.06%.

On the VIX Index

In the week ending May-13, the VIX fell for a second consecutive week. The VIX had risen for four consecutive weeks ahead of the current downtrend.

Following a 9.61% decline from the previous week, the VIX fell by 4.37% to end the week at 28.87.

4-days in the red from 5 sessions, which included a 9.13% slide on Friday, delivered the downside.

For the week, the NASDAQ slid by 2.80%, with the Dow and the S&P500 seeing losses of 2.14% and 2.41%, respectively.

VIX 130522 Weekly Chart

The Week Ahead

It is a quiet week ahead on the Eurozone economic calendar.

Eurozone trade, GDP, and inflation figures are due out. Expect any revisions from the first estimate GDP and any upward revisions to prelim inflation figures to draw interest.

It is a busy week ahead on the US economic calendar.

On Tuesday, retail sales figures will be key ahead of jobless claims and Philly Fed Manufacturing Index numbers on Thursday.

While stats from the Eurozone and the US will influence, economic data and news updates from China will also need considering.

On Monday, industrial production figures for April set the tone. The markets will be looking out for updates on new lockdown measures.

Away from the economic calendar, updates on the war in Ukraine and crude oil prices will also influence.

Bank Stocks Deliver Early FTSE100 Support While Mining Stocks Struggle

It was a quiet start to the day for the UK market. There were UK stats for the markets to consider going into the UK open.

The lack of stats left the FTSE100 in the hands of market risk appetite and sentiment towards inflation.

Following Monday’s global equity market rout, hopes are for softer US inflation in April. Market angst over supply chain disruption stemming from the war in Ukraine and China’s COVID-19 lockdown measures lingered, however.

Market Impact

At the time of writing, the FTSE100 was up 0.58% to 7,258.39.

Anglo American (-0.46%) and Glencore (-0.93%) struggled early in the session, while Antofagasta (+0.39%) and Rio Tinto (+0.09%) made modest gains.

Bank stocks delivered support. Barclays (+1.28%), HSBC (+1.25%), Lloyds (+2.01%), and Standard Chartered (+2.23%) all made a strong start to the session.

The Pound remained on the back foot this morning despite a bullish start to the day for the European equity markets.

At the time of writing, the Pound was down 0.19% to $1.23072. Early in the session, the Pound rose to a morning high of $1.23757 before falling to a low of $1.23039.

Cable 100522 Hourly Chart

The UK markets will need to look ahead to UK GDP and manufacturing production figures on Thursday for direction. It may all boil down to US inflation figures on Wednesday, however.

European Equities: A Week in Review – 06/05/22

The Majors

It was a bearish week for the European majors in the week ending May-06, 2022.

The DAX fell by 3.00%, with the EuroStoxx600 and the CAC40 seeing losses of 4.55% and 4.21%, respectively.

Disappointing economic data coupled with market angst over inflation and Fed monetary policy left the majors deep in the red.

The global financial markets brushed aside Fed Chair Powell’s attempts to ease concerns of more aggressive policy moves. Lockdown measures in China and the ongoing war in Ukraine continue to disrupt supply chains, pushing oil prices northwards.

The upward trend in crude oil prices and supply chain woes were market negative.

The Stats

The German economy and private sector PMIs were the areas of focus.

It was a mixed set of numbers, with economic data from Germany disappointing.

In March, German retail sales unexpectedly fell by 0.1% versus a forecasted 0.3% increase. Unemployment also fell more slowly, leaving the German unemployment rate at 5.0%.

Trade, factory orders, and industrial production figures also sounded the alarm bells.

Germany’s trade surplus narrowed from €11.1bn to €3.2bn, with factory orders tumbling by 4.7%.

Industrial production was not much better, sliding by 3.9%, to reflect the impact of the war in Ukraine and lockdown measures in China.

Private sector PMIs were also negative, with the Eurozone’s manufacturing PMI falling to a 15-month low of 55.5. Easing lockdown measures provided some relief, with the Eurozone services PMI rising from 55.6 to 57.7 in April.

From the US

Private sector PMIs were the key stats in the week ahead of nonfarm payroll numbers on Friday.

The numbers were mixed, with private sector PMI figures disappointing.

In April, the ISM Manufacturing PMI fell from 57.1 to 55.4, with the Non-Manufacturing PMI down from 58.3 to 57.1.

Labor market numbers were also dollar negative ahead of the NFP numbers. The ADP reported a 247k increase in nonfarm payrolls for April, falling short of forecasts, and a 479k rise in March.

For the week ending April 29, initial jobless claims increased from 181k to 200k.

On Friday, the stats were market neutral. Nonfarm payrolls increased by 428k in April, following a 428k rise in March. As a result, the US unemployment rate held steady at 3.6%.

While the stats were of interest, the Fed monetary policy decision and forward guidance were the key drivers in the week.

On Wednesday, the Fed delivered a 50 basis point rate hike, which was in line with forecasts. Fed Chair Powell also looked to calm the markets by assuring that 75 basis point hikes would not be on the table.

Relief was brief, with jitters over inflation and Fed policy returning in the second half of the week.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Daimler and Continental tumbled by 7.48% and 7.12%, respectively, with Volkswagen falling by 2.00%. BMW bucked the trend with a 0.70% gain.

It was a bearish week for the banking sector. Deutsche Bank and Commerzbank saw losses of 3.23% and 2.55%, respectively.

From the CAC, it was a mixed week for the banks. BNP Paribas rose by 1.77%, while Credit Agricole and Soc Gen ended the week down by 3.95% and 2.59%, respectively.

It was another mixed week for the French auto sector. Stellantis NV rose by 1.25%, while Renault fell by 1.74%.

Air France-KLM slipped by 0.08%, while Airbus ended the week up 1.86%.

On the VIX Index

A run of four consecutive weeks in the green came to an end for the VIX in the week ending May-06.

Partially reversing an 18.40% jump from the previous week, the VIX fell by 9.61% to end the week at 30.19.

4-days in the red from 5 sessions, which included a 13.09% slide on Wednesday, delivered the downside.

For the week, the NASDAQ fell by 1.54%, with the Dow and the S&P500 seeing losses of 0.24% and 0.21%, respectively.

VIX 060522 Weekly Chart

The Week Ahead

It is a busy week ahead on the Eurozone economic calendar.

ZEW Economic Sentiment figures for Germany and the Eurozone are due on Tuesday.

On Friday, Eurozone industrial production numbers will also influence.

Other stats in the week include finalized member state inflation figures for May that should have a muted impact on the majors.

From the US, inflation is back in the spotlight, with consumer and wholesale inflation figures due out on Wednesday and Thursday.

Another spike in inflation would test support for riskier assets following Fed forward guidance last week.

On Thursday, initial jobless claims will also draw interest ahead of consumer sentiment figures on Friday.

Economic data and updates on lockdown measures from China will also provide direction. Key stats include trade data and inflation figures.

While the stats will influence, news updates on the war in Ukraine and central bank chatter will also need monitoring.

European Equities: A Week in Review – 29/04/22

The Majors

It was a bearish week for the European majors in the week ending April-29, 2022.

The CAC40 fell by 0.73%, with the EuroStoxx600 and the DAX seeing losses of 0.64% and 0.31%, respectively.

After a bearish start to the week, corporate earnings supported riskier assets in the week. The upside was modest, however, with market sentiment towards the global economy and Fed monetary policy weighing heavily on risk sentiment.

On Friday, the Financial Times reported China’s politburo “promising to strengthen macro adjustments and achieve full-year economic and social development goals.”

China’s pledge to support the economy also delivered the European majors with support.

While the weekly losses were modest, it was a bearish month, with the DAX sliding by 2.20% and the CAC and EuroStoxx600 falling by 1.90% and 1.20%, respectively.

China’s COVID-19 lockdown measures and the ongoing war in Ukraine raised further concerns over supply chain disruption. Fed Chair Powell’s talk of aggressive policy moves to curb inflation and jitters over the threat of a recession were also market negative in the month.

The Stats

Early in the week, German business and consumer sentiment diverged. While business sentiment improved, consumer sentiment weakened further.

The Ifo Business Climate Index increased from 90.8 to 91.8 in April, while the Gfk German Consumer Climate Index fell from -15.7 to -26.5.

In the second half of the week, the market focus shifted to inflation and economic growth.

The stats were market positive, with German and the Eurozone GDP numbers for the first quarter providing support.

In Q1 2022, the German economy expanded by 4.0% year on year, up from 1.8% in the previous quarter.

The Eurozone’s economy grew by 5.0% year on year, up from 4.6% in the quarter prior.

On the inflation front, inflationary pressures ticked up further, though only moderately. According to prelim figures, the Eurozone’s annual rate of inflation picked up from 7.4% to 7.5%.

From the US

Core durable goods orders and consumer sentiment drew interest on Tuesday. The stats were market positive, with core durable goods orders rising by 1.1% in March.

Consumer sentiment held steady in April, which was also market positive. The CB Consumer Confidence Index slipped from 107.6 to 107.3.

On Thursday, US GDP numbers disappointed, however, with the US economy contracting by 1.4%. In the previous quarter, the economy expanded by 6.9%.

At the end of the week, inflation and personal spending were market positive. Personal spending rose by 1.1% in March, while inflationary pressures softened. In March, the Core PCE Price Index increased by 5.2% year on year, down from 5.3% in February.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Daimler rallied by 3.66%, with Continental gaining 0.64%. Volkswagen slid by 2.43%, however, with BMW ending the week flat.

It was a bearish week for the banking sector. Deutsche Bank tumbled by 12.68%, with Commerzbank sliding by 7.65%.

From the CAC, it was a bearish week for the banks. BNP Paribas and Soc Gen saw losses of 3.90% and 3.66%, respectively, with Credit Agricole falling by 1.05%.

It was another mixed week for the French auto sector. Stellantis NV slipped by 0.37%, while Renault ended the week up 1.59%.

Air France-KLM slid by 4.24%, while Airbus ended the week with a 0.84% gain.

On the VIX Index

It was a fourth consecutive week in the green for the VIX in the week ending April-29.

Following a 24.27% surge from the previous week, the VIX jumped by 18.40% to end the week at 33.40.

2-days in the green from 5 sessions, which included a 24.06% surge on Tuesday and an 11.37% jump on Friday, delivered the upside.

In the week, the NASDAQ slumped by 3.93%, with the Dow and the S&P500 sliding by 2.47% and 3.27%, respectively.

VIX 290422 Weekly Chart

The Week Ahead

It is a busy week ahead on the Eurozone economic calendar.

On Monday, manufacturing PMIs and German retail sales will draw interest ahead of German unemployment figures on Tuesday.

On Wednesday, the market attention will shift to service sector PMIs, German trade data, and Eurozone retail sales.

Over the remainder of the week, the German economy will remain in the spotlight. On Thursday, German factory orders are due out ahead of industrial production figures on Friday.

From the US, it is a big week ahead. On the economic data front, ISM survey PMIs will influence this Monday and Wednesday, with Wednesday’s ISM Non-Manufacturing PMI the main driver.

The US labor market will also be in focus, with the ADP nonfarm employment change figures and official nonfarm numbers due out on Wednesday and Friday.

The main event of the week, however, is the FED’s monetary policy decision. A larger than expected rate hike will spook the markets.

Away from the economic calendar, corporate earnings will continue to provide direction. The majors could be in for a tough time following Amazon.com’s earnings after the European close on Friday.

News updates on the war in Ukraine will also need monitoring throughout the week.

European Equities: A Week in Review – 22/04/22

The Majors

It was a mixed week for the European majors in the week ending April-22, 2022.

The EuroStoxx600 slid by 1.42%, with the CAC40 and the DAX seeing losses of 0.12% and 0.15%, respectively.

Stats from China at the start of the week set the tone, leaving the majors in the red after the Monday holidays.

In Q1, the economy grew by 1.3%, which was softer than 1.5% in Q2. Year-on-year, the economy grew by 4.8%, picking up from 4.0% in the quarter prior.

The downward trend in industrial production continued with production up by 5.0% year-on-year. In February, industrial production increased by 7.5%.

Fed Chair Powell chatter drove Treasury yields northwards to leave the majors searching for support on Friday.

Economic data from the Eurozone was relatively upbeat but not good enough to offset concerns over supply chain disruption.

The ongoing war in Ukraine and China’s introduction of new COVID-19 restrictions added to the market angst.

The Stats

Early in the week, the Eurozone economy was in the spotlight.

The stats were market positive, though not good enough to counter hawkish Fed Chair Powell chatter from later in the week.

In February, industrial production rose by 0.7%, reversing a 0.7% decline from January. Trade data was also positive, with the trade deficit narrowing from €27.3bn to €7.6bn.

Consumer confidence was also on the rise, despite the ongoing war in Ukraine.

At the end of the week, prelim private sector PMIs for April disappointed. Germany’s manufacturing PMI declined from 56.9 to 54.1, leaving the Eurozone Manufacturing PMI down from 56.5 to a 15-month low of 55.3.

Service sector activity accelerated due to easing COVID-19 restrictions, supporting a rise in the composite PMI from 54.9 to 55.8.

From the U.S

It was a quiet start to the week, with the markets needing to wait until Thursday for the key numbers.

It was a mixed set of numbers. Jobless claims fell from 186k to 184k in the week ending April 15. The Philly Fed Manufacturing Index disappointed, however, falling from 27.4 to 17.6.

On Friday, prelim private sector PMIs for April also drew interest.

The Manufacturing PMI increased from 58.8 to 59.7, while the Services PMI declined from 58.0 to 54.7.

The mixed set of numbers came amidst some hawkish Fed Chair Powell chatter.

On Thursday, Fed Chair Powell spoke at the Annual Economic Policy Conference National Association for Business Economics.

There were two key takeaways from the Powell speech. Firstly, the prospect of a fifty-basis point rate hike.

Discussing restoring price stability, Powell said,

“If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or in meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

Secondly, Powell talked of the challenges of bringing down inflation without bringing down the economy.

Concerning growth, Powell said,

“I hasten to add that no one expects that bringing about a soft landing will be straightforward in the current context – very little is straightforward in the current context. My colleagues and I will do our very best to succeed in this challenging task.”

The combination of a more rapid move to policy-neutral and possible beyond and the threat of recession weighed on riskier assets.

The Market Movers

From the DAX, it was a bullish week for the auto sector. BMW and Continental rallied by 2.99% and 3.31%, respectively. Daimler and Volkswagen ended the week with gains of 2.23% and 2.39%, respectively.

It was also a bullish week for the banking sector. Deutsche Bank rose by 0.44%, with Commerzbank rallying by 5.10%.

From the CAC, it was another bullish week for the banks. BNP Paribas rose by 4.48%, with Credit Agricole and Soc Gen seeing gains of 5.11% and 5.21%, respectively.

It was a mixed week for the French auto sector. Stellantis NV slid by 6.54%, while Renault ended the week up 4.41%.

Air France-KLM gained 0.49%, while Airbus ended the week with a 1.38% loss.

On the VIX Index

It was a third consecutive week in the green for the VIX in the week ending April-22.

Following a 7.28% gain from the previous week, the VIX jumped by 24.27% to end the week at 22.70.

2-days in the green from 5 sessions, which included an 11.61% rise on Thursday and a 24.38% surge on Friday delivered the upside.

In the week, the NASDAQ slumped by 3.83%, with the Dow and the S&P500 falling by 1.86% and 2.75%, respectively.

The Week Ahead

It is a quieter week ahead on the Eurozone economic calendar.

At the start of the week, German business sentiment will provide direction. Expect another slide to test support for the majors.

On Wednesday, German consumer sentiment figures will also influence ahead of Q1 GDP numbers on Friday.

GDP numbers from France, Germany, and Spain will be key at the end of the week.

From the U.S, Core durable goods and consumer confidence figures will draw attention on Tuesday. Expect consumer confidence to have a greater influence.

On Thursday, the market focus will shift to Q1 GDP and weekly jobless claims. Barring a spike in jobless claims, the GDP numbers will be key.

At the end of the week, inflation and personal spending will wrap up the week.

From China, expect private sector PMIs to also influence at the end of the week.

Away from the economic calendar, corporate earnings and the war in Ukraine will continue to provide direction.