July 2, 2022
  • July 2, 2022

Dovish Fed, US GDP surges, profits from blockbuster tech

By on May 2, 2021 0

Global stocks held near record highs on Monday, as investors envisioned a week dominated by major economic data and quarterly earnings from tech giants.

We covered various technical perspectives throughout the week, with gold catching our attention on Monday. Despite the choppy price action seen during the second half of April, gold is on course to conclude the month above 3.4%. Given the conflicting forces pulling and pulling the precious metal, the next few weeks could be volatile.

We focused on Tesla after its first quarter results beat expectations. We wondered if Tesla shareholders were turning into an insatiable group after shares in the electric vehicle maker fell 3.1% after hours.

European stocks opened higher on Tuesday after US markets hit new records overnight. The general mood in the markets turned mixed as investors took a cautious stance ahead of the Federal Reserve meeting.

We decided to hedge commodity currencies after the Canadian dollar, New Zealand dollar and Australian dollar appreciated against major peers in the G10 group.

Remember how we pointed out how USDCAD was crying down? Well, prices have finally cut 1.2400 support like a knife burning in butter.

As the Fed meeting and President Joe Biden’s spending plans loomed, market sentiment mixed with investor sentiment on defense.

Our action of the week was Facebook, which released its first quarter results after U.S. markets closed on Wednesday. The social giant beat both earnings and earnings in the first quarter with stocks gaining nearly 8% this week. Apple also reported an incredibly good quarter with earnings and revenue crushing expectations. The same story was for Microsoft and Google.

It was all about the Federal Reserve on Wednesday night. As widely expected, the central bank left interest rates unchanged while adopting an accommodating tone.

After being punished by an accommodating Federal Reserve, the dollar healed its wounds on Thursday. In our technical outlook, we highlighted how the dollar index is under pressure on the daily, weekly and monthly charts. However, the dollar came as a surprise on Friday afternoon as it appreciated aggressively across the board.

Technically, a strong daily close above 91.31 could open the doors towards 91.80.

Confidence in the US economy was bolstered by the GDP report which showed growth growing at an annualized rate of 6.4% in the first quarter of 2021.

Risk-on was the name late in the week, with the S&P 500 setting new records on Thursday. Interestingly, US stocks lost ground on Friday, but posted monthly gains on a string of robust earnings. The S&P 500 gained 5.24% in April, its biggest monthly gain since November 2020.

April was defined by improving economic data in developed economies, incomes and worsening cases of Covid-19 across the world. As the new month approaches, the pendulum of risk will inevitably tip as investors juggle these themes.

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