Weekly News 2022/04/11-2022/04/15

This week the Dow Jones fell 0.78%, the S&P 500 fell 2.13%, and the Nasdaq fell 2.63%. 

With hopes of a swift resolution to the Russia-Ukraine conflict dwindling, and with most central banks raising rates more aggressively or poised to do so than previously thought, we don't see a clear, effective catalyst behind the stock market rally. The path of least resistance for U.S stocks remains to the downside. 

Investors continued to focus on U.S stock earnings reports. Citi, Goldman Sachs, Morgan Stanley, Wells Fargo, and several financial companies have successively released their first-quarter results. 

Data showed U.S retail sales picked up in March, with a surge in gasoline spending overshadowing mixed performances in other categories. Inflation is at a multi-decade high, eroding the disposable income of Americans. Overall retail sales rose 0.5% in March after an upwardly revised 0.8% gain in February, Commerce Department data showed on Thursday. 

CPI and PPI inflation data released earlier this week prompted some economists and investors to discuss whether inflation has peaked. 

Federal Reserve Governor Christopher Waller said on Wednesday that U.S. inflation may have peaked, but the Fed needs to continue aggressively raising interest rates and tightening monetary policy to control inflation. Waller said he continued to support a 50-basis-point rate hike in May, “as well as larger rate hikes in June and July.” 

Tesla CEO Elon Musk intends to buy the social media platform Twitter (NYSE: TWTR) for $54.20 per share in cash, in a deal that will reach $43 billion, according to documents released. Twitter confirmed it had received the offer and said its board would review the offer. Twitter Inc. is considering a so-called “poison pill” to prevent Musk from significantly increasing his stake in the company, The Wall Street Journal reported, citing sources. “Poison pill defense” is a legal mechanism, which is a defense measure for target companies to resist hostile takeovers. 

Goldman Sachs (NYSE: GS) reported first-quarter 2022 results. Q1 revenue was US$12.93 billion, down 27% year-on-year, but better than market expectations of US$11.83 billion. Q1 profit fell 42% from a year earlier to $3.94 billion, or $10.76 a share, beating market expectations of $8.89 due to a sharp decline in its investment banking business. 

Morgan Stanley (NYSE: MS) announced its first-quarter 2022 earnings. According to the data, Morgan Stanley‘s revenue in the first quarter was $14.8 billion, the company’s highest quarterly revenue in history, higher than market expectations of $14.2 billion, but less than $15.7 billion in the first quarter of last year. Net profit was 3.667 billion US dollars, although higher than market expectations but less than the same period last year, 4.12 billion US dollars. 

Bitcoin (BTC) faltered this week, showing uncertainty among market participants. The world's largest cryptocurrency is under pressure as an increase in bond yields puts pressure on the world's largest cryptocurrency. 

Most technical indicators are neutral, although short-term buyers are likely to remain active between the $35,000 to $37,000 support area, similar to what happened earlier this year. 

According to the MACD (Moving Average Convergence Divergence) indicator, the momentum signal is positive on the weekly chart and negative on the monthly chart. This suggests that price range volatility is likely to continue for some time, although the average price volatility is 20%. 

On the weekly chart, the 100-week moving average is currently at $35,388, an important gauge of trend support. Buyers will need to hold Bitcoin above that level to sustain the recovery. Nonetheless, the 40-week moving average at $46,800 remains a strong resistance. 

The upside target at $50,966 was around March 28, but the price pulled back, as it was last September. For now, a bullish countertrend signal needs to be confirmed on a weekly close above $40,000. 

Gold rose for a second week in a row, setting a one-month high. Although investors are preparing for the accelerated tightening of monetary policy by the Federal Reserve, which will lead to the strengthening of the dollar. The European Central Bank's unexpectedly dovish stance is also positive for the dollar, but the annual rate of US inflation has broken eight, hitting a new high in more than four decades. Russia and Ukraine are difficult to s stop the war in the short term, resulting in safe-haven demand and further intensified upward pressure on inflation have kept gold prices within an upward channel. 

The gold market was closed on Friday (April 15) to coincide with Good Friday, a day earlier this week. Spot gold closed up 1.29% this week at $1,972.47 an ounce, hitting a new high of $1,981.49 an ounce on March 14. 

“Russia appears to be gearing up for a major offensive in eastern Ukraine. This has triggered a lot of demand for gold as a safe-haven asset.” Commerzbank analyst Daniel Briesemann said in a note. 

International oil prices closed up again after a lapse of two weeks. The conflict between Russia and Ukraine will not end soon. The European Union may gradually ban oil imports from Russia. The Organization of the Petroleum Exporting Countries cannot fill the gap in Russia's supply reduction. Investors are paying attention to the release of US reserves and production increase in the market outlook. 

The oil market was closed on Friday (April 15) to coincide with Good Friday, a day earlier this week. WTI crude oil futures closed up 8.83% to $106.54 per barrel, while ICE Brent crude oil closed up 9.04% to $111.66 per barrel. The two hit a new high of $107.64/barrel on March 31 and a new high of $112.39/barrel on March 28, respectively. 

EU decides to phase out Russia's oil embargo. The New York Times reported that the European Union is taking steps to gradually implement an embargo on Russian oil to give Germany and other countries time to find alternative suppliers.  

The U.S. and U.K. have imposed an embargo on Russian oil following Russias invasion of Ukraine, but the European Union has been slow to agree on this because some member states, represented by Germany, rely heavily on Russian energy and lack infrastructure to store alternative sources. 

An analyst Phil Flynn said Oil trading will continue to “remain tense” as the war between Russia and Ukraine continues and countries consider embargoing Russian oil. 

On Friday, the U.S dollar index rose in a volatile week, U.S inflation continued to rise, Fed executives made hawkish remarks, and the market's expectations for the Fed to raise interest rates by 50 basis points in May increased, which supported the dollar's volatile higher. 

On the other hand, the euro fell against the US dollar in shocks, and the dovish tone of the European Central Bank put pressure on the euro. The pound rose slightly against the US dollar, and the Bank of England rate hike expectations supported the pound. The US dollar rose against the Canadian dollar in shocks, and the hawkish tone of the Bank of Canada limited the gains in the United States and Canada. 

Next week, the market will usher in a series of important economic data, Federal Reserve Chairman Powell and European Central Bank Christine Lagarde will appear on stage. Next, let's take a detailed look at the trend of several major currency pairs this week. 

Analyst Hubert Lam said that emerging markets experienced capital outflows in the first quarter of this year, mainly due to factors such as rising U.S. bond interest rates, the strengthening of the U.S. dollar and international risk events. 

OnePro Special Analyst

Buy or sell or copy trade crypto CFDs atwww.oneproglobal.com

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