Daily Market Recap - January 18, 2024: Navigating Volatility and Key Trends

DAILY MARKET newsletter January18, 2024

Here are today's directional views from the global research desks of Trading Central! These are starting points for your research to identify opportunities that make sense for you.

MARKET WRAP

STOCKS, BONDS, COMMODITIES

On Wednesday, U.S. stocks remained under pressure as Treasury yields rebounded further. The Dow Jones Industrial Average fell 94 points (-0.25%) to 37,266, the S&P 500 dropped 26 points (-0.56%) to 4,739, and the Nasdaq 100 was down 94 points (-0.56%) to 16,736.

The U.S. 10-year Treasury yield rose 4 basis points to 4.106%.

U.S. data showed that retail sales grew 0.6% on month in December (vs +0.3% expected), and industrial production increased 0.1% (vs -0.1% expected).

Real estate (-1.93%), automobiles & components (-1.91%), and utilities (-1.52%) stock sectors led the market lower.

Microsoft (MSFT) dipped 0.20%, Apple (AAPL) declined 0.52%, and Nvidia (NVDA) was down 0.58%.

Tesla (TSLA) fell 1.98%. The electric-vehicle maker lowered prices of its products in Germany after doing so in China.

Spirit Airlines (SAVE) plunged a further 22.47% after tumbling 47% Tuesday when a U.S. judge blocked JetBlue Airways from acquiring the company.

Prologis (PLD) dropped 2.39%. The industrial real estate investment trust's fourth-quarter revenue missed expectations.

Charles Schwab (SCHW) declined 1.34%, and US Bancorp (USB) was down 1.35%, as both financial firms posted lower-than-expected quarterly results.

European stocks stayed in the red, with the DAX 40 losing 0.84%, the CAC 40 down 1.07%, and the FTSE 100 down 1.48%.

In Asia, Japan's Nikkei 225 Index hit a 34-year intraday high of 36,239, while Hong Kong's Hang Seng Index tumbled 3.71% to 15,276, the lowest close since October 2022.

U.S. WTI crude-oil futures gained $0.42 (+0.58%) to $72.82 a barrel.

Gold price slid $21 (-1.07%) to $2,005 an ounce, below both its 20-day and 50-day moving averages.

MARKET WRAP: FOREX

The U.S. dollar held firm against other major currencies. The dollar index was little changed at 103.38.

EUR/USD added 6 pips to 1.0880.

USD/JPY climbed 98 pips to 148.16, the highest level since early December. This morning, Japan's data showed that machinery orders fell 4.9% on month in November (vs -0.5% expected).

GBP/USD gained 42 pips to 1.2678. U.K. inflation rate rebounded to 4.0% on year in December (vs a fall to 3.8% expected).

The Royal Institute of Chartered Surveyors (RICS) house price balance improved to -30% in December (vs -41% expected).

AUD/USD fell 32 pips to 0.6551. This morning, Australia's data showed that the number of employment unexpectedly dropped 65,100 in December (vs +20,000 expected) with the jobless rate staying at 3.9% (as expected).

USD/CHF climbed 29 pips to 0.8644, and USD/CAD added 18 pips to 1.3510.

Bitcoin traded lower to $42,680.

FOREX ANALYSIS AND STRATEGIES

GBP/USD Intraday: bullish bias above 1.2655.

• Pivot: 1.2655

• Our preference: Long positions above 1.2655 with targets at 1.2715 & 1.2735 in extension.

• Alternative scenario: Below 1.2655 look for further downside with 1.2635 & 1.2615 as targets.

• Comment: Technically the RSI is above its neutrality area at 50.

USD/JPY Intraday: bullish bias above 147.60.

• Pivot: 147.60

• Our preference: Long positions above 147.60 with targets at 148.50 & 148.80 in extension.

• Alternative scenario: Below 147.60 look for further downside with 147.30 & 147.05 as targets.

• Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

EUR/USD Intraday: rebound.

• Pivot: 1.0865

• Our preference: Long positions above 1.0865 with targets at 1.0915 & 1.0935 in extension.

• Alternative scenario: Below 1.0865 look for further downside with 1.0845 & 1.0825 as targets.

• Comment: The RSI calls for a rebound.

These views are provided by Trading Central for informational purposes only.