-
- Walmart stocks soar 5.88% after their earnings report confirms higher earnings and revenue. As a result, the stock has risen more than 18.50% in 2024 and continues to support the SNP500 and DJIA.
- US Inflation declines to 3.4% and Core Inflation to 3.6%. However, Producer inflation continues to indicate sticky inflation for 2024!
- In the first quarter of 2024 the EU’s GDP rose from –0.1% to 0.3%, beating forecasts. The increase brings the region’s economic growth to the rate to 0.4% from 0.1%.
- The US Weekly Unemployment Claims continues to remain above 2024’s average readings.
EURUSD – The US Dollar Attempts A Correction.
The EURUSD currently trades 0.19% lower witnessing resistance after reaching close to a 2-month high. The US Dollar Index currently trades 0.19% higher while the Euro Index is 0.17% lower. The EURUSD had risen for 3 consecutive days as European economic growth improved and the US Dollar fell due to inflation.
Nonetheless, the scenario in terms of the Federal Reserve’s monetary policy is little changed. Currently, the CME FedWatch Tool predicts a 51% possibility of a cut in September, very similar to April’s expectations, but the US Bond Yields have fallen indicating a lower rate hike. What has changed for US inflation?
The US CPI decreased from 0.4% to 0.3% instead of the expected retention at the same level, and the yearly figure from 3.5% to 3.4%, while the core indicator adjusted from 3.8% to 3.6%, respectively. The cost of real estate and energy increased the most in the reporting month. In general, inflationary pressure in the American economy has weakened somewhat, but the pace of consumer prices is still far from the Federal Reserve’s target of 2%.
In addition to this, market participants also continue to overlook the significantly higher producer inflation levels from Tuesday. This data implies inflation is likely to remain sticky and will be difficult to bring below 3.00%. However, based on the market’s pricing and orders, institutions are happy to keep purchasing stocks and keep the Dollar in the same range as long as rate hikes are not possible.
USA30 – Walmart Beat Earnings Expectations!
The Dow Jones currently trades higher than the day’s open price but has come under pressure as we approach the US opening. The index has risen more than 4.00% in the month of May which has proven to be one of its best performing months of late. The key drivers have been the positive earnings data and slight reduction in inflation as well as weaker employment data.
On larger timeframes, the USA30 is primarily receiving indications of bullish price movement but is the only index to not reach a new all-time high. The price is trading above most Moving Averages and the Neutral level on Oscillators. This indicates bullish price movement, however, the price is at the moment trading below the VWAP and is forming a descending triangle pattern on the 5-minutes. Also, investors are slightly cautious that the DAX, Euro Stoxx 50 and the CAC 40 are trading lower today. Therefore, buy signals are likely to materialize after the index again rises above the $39,962 resistance level.
Nonetheless, positive earnings continue to support the index to a certain extent. This morning, Walmart stocks soared 5.88% after their earnings report confirmed higher earnings and revenue. Walmart Stocks currently hold a weight of 0.99% within the Dow Jones.
Michalis Efthymiou
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
