Thread: Forex News from InstaForex

Wall Street on the Edge: When Banking Ratings Shake the Foundation

Significant changes occurred with 10 medium-sized banking institutions, whose ratings went down by one notch. In addition, six of the largest banks, including Bank of New York Mellon, US Bancorp, State Street, and Truist Financial, were under close scrutiny by Moody's for further review.

While the banking sector felt the pressure, the pharmaceutical industry lit up with good news. Thanks to successes in developing an obesity drug, Novo's shares went up. Eli Lilly also brings its share of optimism to the market, reaching record highs due to impressive profit reports.

However, not everything was smooth sailing. UPS faced challenges, cutting its annual revenue forecast due to falling demand. Overall, the indices showed the following picture: Dow decreased by 0.45%, S&P went down by 0.42%, and Nasdaq lost 0.79%. This day reminded investors that even Wall Street's sturdy foundation can be subject to external influences. All that remains is to hope that the current turbulence will soon subside.

Following the shock wave of bankruptcy of three creditors at the beginning of the year, which significantly shook the US financial world and even impacted giants like Silicon Valley Bank, the market's trust in banks showed signs of recovery. However, recent events suggest that this trust is far from being stable. The numbers confirm this: the S&P 500 Banks index (.SPXBK) has fallen by 2.5% since the beginning of the year, while the main S&P 500 index has risen by an impressive 17.2%. The recent ratings downgrade underscores how fragile investor confidence remains in financial stocks. Specifically, on Tuesday, the banking index went down by 1.1%, and the KBW regional banks index (.KRX) lost 1.4%.

Many major banks felt the pressure. Shares of giants such as Goldman Sachs and Bank of America each dropped about 1.9%, Bank of New York Mellon lost 1.3%, and Truist shares went down by 0.6%. Jason Pride of Glenmede notes that Moody's actions aren't just a formality. It's a clear expression of the agency's concern about the current state of the banking system and its potential impact on the overall economic situation. As a result of this news, the CBOE market volatility index (.VIX), which serves as Wall Street's "fear barometer," showed an increase, at one point reaching its two-month peak. All of this reminds us that trust is a fragile thing, especially when it comes to finances.

On Monday, Wall Street indices suffered a decline, with Dow Jones losing 158.64 points (0.45%), dropping to 35,314.49, the S&P 500 went down 19.06 points (0.42%) to 4,499.38, and Nasdaq lost 110.07 points (0.79%), reaching 13,884.32. Out of the 11 key sectors of the S&P 500, eight suffered. Although financial stocks, as expected, took the hardest hit, materials and consumer goods sectors also felt significant pressure. However, not everything was bleak. The energy sector, initially depressed by poor trade data from China, ultimately went up by 0.5%, thanks to rising oil prices amid more optimistic economic forecasts from the US.

In the pharmaceutical world, it was a good day: shares of Novo Nordisk, a Danish manufacturer, surged 14.9% after announcing that their drug Wegovy might aid in combating heart diseases. Among other winners of the day was Dish Network, whose shares rose by 9.6% following the announcement of merger plans with EchoStar, whose shares also went up by 1%. But, as always on Wall Street, where there are winners, there are losers. United Parcel Service shares dropped 0.9% after the company downgraded its forecasts. By the end of the day, US trading volume reached 10.94 billion shares, aligning with the average over the last 20 trading days. It's also interesting to note that the S&P 500 recorded 13 new 52-week highs and 17 new lows, while Nasdaq registered 46 new highs and a whopping 195 new lows. In the commodity market on Monday, gold futures for December delivery faced pressure, declining by 0.54% or $10.60, hitting the mark of $1.00 per troy ounce. Such a sharp drop may raise questions since gold rarely costs so little, and this data likely requires verification or correction.

Meanwhile, oil futures showed positive momentum. WTI crude oil futures for September delivery increased by 1.04% or $0.85, reaching a level of $82.79 per barrel. Brent crude oil futures for October delivery also moved up, adding 0.81% or $0.69, settling at $86.03 per barrel. On the currency front, no significant changes were observed. The EUR/USD pair showed a minimal change, decreasing by 0.43% to the 1.10 level. Meanwhile, the USD/JPY quotes exhibited growth, increasing by 0.62% to a mark of 143.38. It's also worth noting that the U.S. dollar index (USD) futures displayed an upward trend, rising by 0.49% and reaching the mark of 102.36. These movements reflect the overall picture of the global markets at the moment, where investors assess various economic and geopolitical factors in determining their investment strategy.

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Global markets await CPI data: stocks are declining, and the dollar is under pressure due to the situation in China

Meanwhile, the dollar faced pressure from news out of China. Reports indicated that China's economy is experiencing deflation, causing some concerns among market participants. The European stock market received some support thanks to tax assurances from Italian banks. At the same time, oil prices rose to their highest level since January due to a supply shortage. Against the backdrop of these news, some major companies showed growth on Wall Street. Dow Inc's shares added 0.96%, closing at 55.54. Honeywell International stocks increased by 0.85%, reaching 189.24, while Caterpillar Inc rose by 0.58%, ending at 284.53. The stock market today was an arena of intense movements, where some corporations shone, while others faced pressure.

On Wall Street, Salesforce Inc experienced a noticeable drop of 2.70%, settling at 205.86. However, not everything looked grim. Intel Corporation, for instance, rose by 2.11% and closed the day at 34.28. Meanwhile, Goldman Sachs Group Inc lost 1.60% of its value.

Among the components of the S&P 500 index, shares of Axon Enterprise Inc stood out, showcasing an impressive rise of 14.06%. They were complemented by stocks of Akamai Technologies Inc and Fleetcor Technologies Inc, which increased by 8.47% and 6.29% respectively. However, major players such as NVIDIA Corporation and Paramount Global Class B dropped by 4.72% and 4.46%.

At the end of trading on NASDAQ Composite, shares of Tango Therapeutics Inc almost doubled their value, with an increase of 103.92%. Renovaro Biosciences Inc and Decibel Therapeutics Inc also showed significant growth, adding 82.35% and 80.29%. On the other side of the spectrum, Palisade Bio Inc shares fell by 62.50%, and both Bruush Oral Care Inc Unit and Yellow Corp lost nearly half of their value.

All in all, today's stock market was eventful, showing how quickly the fortunes of companies can change on the global economic stage.

On the New York Stock Exchange, there was a dominance of declining stocks: 1593 against 1324, which closed in the green. Another 83 stocks retained their positions. The situation on NASDAQ was similar: 2225 stocks decreased in value, 1284 gained, and 112 remained unchanged.

Akamai Technologies Inc (NASDAQ:AKAM) showcased splendid performance, hitting a 52-week high with a rise of 8.47%, and closed the day at 102.99. In contrast, Palisade Bio Inc (NASDAQ:PALI) shares plummeted, losing 62.50% and setting a new all-time low. The volatility index, CBOE Volatility Index, based on S&P 500 options, modestly declined by 0.19%, reaching 15.96. In the commodities market: gold futures slid 0.57%, pricing at $1,000 per troy ounce. At the same time, WTI and Brent crude increased their value, closing at $84.26 and $87.44 per barrel respectively.

On the foreign exchange market, the EUR/USD pair remained almost unchanged, ending the day at 1.10, while USD/JPY gained 0.22%, reaching 143.68. The US dollar index slightly slipped, losing 0.01%, and settled at 102.33. Experts anticipate that the Consumer Price Index (CPI) for July will show a modest annual increase of 3.3%, keeping the core rate at a steady 4.8%. On Tuesday, the financial market underwent a massive selloff, stimulated by Moody's credit agency's decision to downgrade ratings of ten small and medium US banks. This decision intensified investor concerns already troubled by high stock valuations and potential interest rate hikes, especially following the unexpected decision by Fitch agency to downgrade US government debt.

Nvidia, a technology company, found itself at the epicenter of the negative dynamics on Wall Street. However, several other giants from the "Magnificent Seven" also played a role in pressuring the market, leading to a decline in major indices. The global MSCI stock index decreased by 0.30%. U.S. stock indices also showed negative dynamics: the Dow Jones index lost 0.54%, the S&P 500 went down by 0.70%, and the Nasdaq Composite dropped by 1.17%. Meanwhile, the European market displayed more optimistic results. The STOXX 600 index increased by 0.43%, partially due to Italy's announcement that the new tax on banking profits would be within 0.1% of a bank's assets, which was lower than many investors had anticipated. Nevertheless, a heated debate continues among global investors regarding the potential taxation of extraordinary banking revenues. Jim Reid, a strategist from Deutsche Bank, expressed the opinion that the question of how to distribute the burden of high rates among various market participants is likely to become political. European banking stocks rose by 1.01%, with the Italian FTSE MIB index showing a growth of 1.31%. The situation in China raises many questions on the global economic stage. The ongoing decline in consumer and producer prices confirms the fears of many experts about a potential slowdown in China's economic growth post-pandemic. Both domestic and foreign demand for Chinese goods is weakening, suggesting that the country might be transitioning into a period of stagnation. The inflation data, as well as weak foreign trade indicators, have led to comparisons with Japan's "lost decades," a period when the country's economy stagnated for many years. The currency market also reacted to the news from China. According to dealers, the alleged interventions of China's state banks to support the national currency led to the strengthening of the yuan. The dollar declined against the yuan and major currencies, which was reflected in the dollar index. There were fluctuations in the US government bond market. The Treasury issued 10-year bonds, and the market closely monitored demand, especially after the recent sharp increase in yields. Instability in this sector reflects investor uncertainty regarding future economic growth and monetary policy. The global oil market continues to show positive dynamics. Reduction in US reserves, as well as decreased supplies from major exporting countries, including Saudi Arabia and Russia, led to price increases. Despite concerns about declining demand from China, the oil market maintains its position. Overall, global financial markets remain influenced by the economic situation in China and the response of key players to these changes.

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Bitcoin: simple trading tips for novice traders on August 11. Overview of yesterday crypto market trades

Tips for trading
BTC Yesterday, Bitcoin did not move according to the plan, failing to give any market entry signals. The US inflation data had no impact on BTC, disappointing traders who were betting on a bullish trend, especially after favorable growth earlier this week, approaching $30,000. Today, Bitcoin's direction is unlikely to see significant changes, mostly maintaining a sideways movement. Nonetheless, it is better to stick to scenario 1.

Buy signal
Scenario 1: Today, you may buy Bitcoin when it reaches the entry point near $29,480 (green line on the chart), aiming for growth toward $29,780 (thicker green line on the chart). It is better to close long positions and open short ones near $29,780. Expecting substantial Bitcoin growth today might be overly optimistic, but a gradual upward movement toward $30,000 may occur. Important! Before buying, make sure that the MACD indicator is above zero.

Scenario 2: Another opportunity to buy Bitcoin today arises if the price tests $29,330 twice. This would limit the downward potential of the trading instrument and trigger an upward market reversal. We can also anticipate a rise towards the opposing levels of $29,480 and $29,780.

Sell signal
Scenario 1: Selling Bitcoin today is possible after $29,330 (red line on the chart) is breached, leading to a rapid decline in the trading instrument. Bears' key target would be $29,037, where you may close short positions and open long ones. Pressure on Bitcoin will intensify if bulls show weak activity near the daily peak range. Important! Prior to selling, make sure that the MACD indicator is below zero.

Scenario 2: Selling Bitcoin today can also be considered if the price tests $29,480 twice. This would limit the upward potential of the trading instrument and result in a downward market reversal. We can expect a decrease toward the opposing levels of $29,330 and $29,037.

What's on the chart:
Thin green line: Entry price for purchasing the trading instrument.

Thick green line: Estimated price at which to set a take profit order or lock in profits manually, as further growth beyond this level is unlikely.

Thin red line: Entry price for selling the trading instrument.

Thick red line: Estimated price at which to set a take profit order or lock in profits manually, as further decline below this level is improbable.

MACD Indicator: When entering the market, consider overbought and oversold zones.

Important! Novice cryptocurrency market traders should exercise extreme caution when making market entry decisions. It's best to stay out of the market before major fundamental reports to avoid exposure to sharp course fluctuations. If you choose to trade during news releases, always place stop orders to minimize losses. Without stop orders, you could quickly deplete your deposit, especially if you neglect money management and trade with large volumes.

Remember that successful trading requires a clear trading plan, like the one provided above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

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BTC update for August 14,.2023 - Fake breakout of the support zone

BTC/USD has been trading upside this morning and I found fake breakout of the support level at $29.200, which is sign that sellers could be in the trap.

Due to the strong rejection of the support at $29.200 and potential for the fake breakout of the consolidation, I see potential for the further rally towards upside references.

Upside objectives are set at the price of $29.670 and $30.110

Stochastic oscillator is showing bullish divergence and potential for the further rally...

Intraday support is set at the price of $29.000

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Nvidia Sets the Pace: New Horizons for S&P 500 and Nasdaq

This leap propelled the information technology index up by 1.85%, making it stand out among other sector indices of the S&P 500.

Apart from Nvidia, stocks of other tech giants, such as Alphabet and Amazon.com, also demonstrated steady growth, increasing by 1.4% and 1.6% respectively. Jay Hatfield from Infrastructure Capital Advisors notes: "Tech has rarely surprised us lately, and now it has surpassed all expectations. With Nvidia's upcoming report, the tech market could receive an additional boost."

Next week, Nvidia plans to publish its quarterly results, sparking particular interest among analysts and investors. On Monday, Morgan Stanley highlighted the company's influence on the market, especially considering the current interest in artificial intelligence.

Meanwhile, Tesla's shares dropped by 1.2% due to the company's decision to reduce prices for some models in China. This week promises to be eventful for the market, with expectations of quarterly reports from major retailers such as Walmart and Target, as well as the release of July retail sales data, which may impact the US economic landscape.

The Market in Anticipation: Retail sales for July are expected to influence the US Federal Reserve's interest rate forecasts. According to CME Group Fedwatch's instrument data, analysts are 89% confident in the Fed's rate stability over the next month. However, Goldman Sachs expects the beginning of rate cuts only by the second quarter of 2024.

Meanwhile, on the global stage, there's growing concern about real estate in China, especially after the country's largest developer, Country Garden, decided to delay payments on its bonds.

Against this backdrop, news from the IT sector: PayPal shares confidently rose by 2.8% after the appointment of Alex Kress, former leader of Intuit, as the CEO.

In the entertainment sector, AMC Entertainment shares took a deep dive, losing 36% due to a court decision to review the agreement with shareholders, while shares of Hawaiian Electric Industries dropped 34% on news of the company's possible involvement in forest fires in Maui. The overall trading volume in the US was below average, with declining shares dominating over rising ones on the S&P 500. Meanwhile, BioXcel Therapeutics shares fell sharply, reaching a three-year low. In conclusion, the CBOE Volatility Index, which reflects the dynamics of S&P 500 options, decreased by 0.13%, indicating a relative market calm.

Gold futures for December delivery fell by 0.36% or $7.05, amounting to around $1,000 per troy ounce. As for oil, WTI futures for September delivery dropped by 0.73% or $0.61, settling at $82.58 per barrel. Meanwhile, Brent futures for October lost 0.59% in price, or $0.51, hovering around $86.30 per barrel. In the currency market, the EUR/USD pair showed minimal change, losing 0.36% and standing at 1.09. The USD/JPY pair, on the other hand, grew by 0.36%, reaching around 145.48. The US dollar index, reflecting the dynamics of the American currency against a basket of major currencies, rose by 0.34%, hitting the 103.04 level.

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BTC update for August 16,.2023 - Key support at the $29.000 on the test

BTC/USD has been trading downside this morning and the price is testing the key support cluster at $29.100.

Potential breakout of the support cluster at the price of $29.000 can lead downside movement towards lower references at $28.800 and $28.730

Potential rejection of the support cluster $29.000 can lead price upside towards upside reference at $29.640

Short-term condition is balanced

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EUR/USD: dollar reflects resilience of US economy while euro's stability in question



The US dollar is once again in a dominant position, successfully overshadowing the euro. The dollar seems to mirror the strength and confidence of the American economy, which has showcased resilience so many times already. For the euro, the question of stability remains a challenging one. It had to prove its viability several times but not always with success.

The Federal Reserve's actions and the current macroeconomic statistics are crucial for the greenback's future trajectory. This is particularly in reference to the monthly reports released on August 16 by the US Census Bureau. According to recent data, housing starts in July increased by 3.9% month-on-month. Notably, there was an 11.7% decrease in this metric in June. This exceeded market expectations which had anticipated growth of 2.7%. Moreover, the number of building permits also increased in the past month by 0.1% after decreasing by 3.7% in June.

The US dollar did not show a significant reaction to this batch of macroeconomic data. The publication of the Fed minutes had a more pronounced impact on the dollar's movements. On the evening of August 16, prior to the report's publication, the greenback depreciated slightly against the euro. By the next morning, the dollar had appreciated slightly, positioning the EUR/USD pair close to 1.0883 and erasing some of its earlier gains.



The chart indicates that the EUR/USD pair is struggling to break out of the bearish 20-day SMA, which is accelerating its decline. Other technical indicators show a downward movement after failing to cross their median lines. This indicates a continuation of the downward trend, which could intensify if the nearest support level at 1.0870 is broken. However, the situation has currently stabilized, and the pair is holding confidently within its current range.

In the current landscape, the European currency remains susceptible to fluctuations. Notably, after the release of the Eurozone's economic data, the euro appreciated but later its growth stagnated. The combined GDP of the 20 Eurozone countries grew by 0.6% annually and by 0.3% quarterly in the second quarter of 2023. Both metrics were consistent with preliminary assessments. Moreover, in the first month of summer, the Eurozone's industrial production volume decreased by 1.2% year-on-year but rose by 0.5% on a monthly basis. This surpassed analyst expectations, predicting a decline of 4.2% and 0.1% respectively.

Post the Federal Reserve's minutes release, markets have gauged the prospects of the institution's future monetary policy. Earlier, the FOMC members expressed concerns regarding the current inflation levels and did not rule out further monetary policy tightening. However, the regulatory representatives were divided on the potential negative impact a prolonged tightening cycle might have on the US economy. Against this backdrop, the majority of analysts (86.5%) anticipate the Fed's rate to remain at the current range of 5.25%–5.5% in September. By the end of 2023, they foresee a possible increase to 5.5%–5.75%.

This situation has been favorable for the greenback. Following the release of the minutes from the Federal Reserve's July meeting, the US dollar considerably strengthened. USD was buoyed by market expectations of the regulator maintaining interest rates at relatively high levels. It is important to highlight that, during its July session, the institution raised its interest rates by 25 basis points to 5.25%–5.50%, marking the highest level since 2001. The meeting minutes revealed that the FOMC representatives view below-trend economic growth and a cooling US labor market as essential conditions for economic recovery.

According to the minutes, most central bank representatives perceive "significant inflationary growth risks." Against this backdrop, the question of further monetary tightening remains pertinent. FOMC members continue to believe that a slight easing in the labor market and some reduction in US economic growth are needed to restore economic balance.

Many experts fear that the Federal Reserve might increase rates again and sustain them at elevated levels for an extended period. However, such a scenario is beneficial for the US dollar, as it bolsters its strength. According to specialist evaluations, the FOMC minutes hint at further rate hikes, lending support to the American currency.

In the evolving scenario, economists at Scotiabank express concerns about a potential weakening of the dollar during the second half of 2023, as the monetary policy tightening cycle appears to have peaked. So market participants anticipate a gradual reduction in the Federal Reserve's rates. Concurrently, Scotiabank believes that the robust growth of the American economy might decelerate.

"The challenges faced by the US economy take a backseat in light of the persisting inflationary pressures in Europe. This circumstance promotes the maintenance of high rates in the United States and a potential increase in Europe. The current situation leads to prolonged adverse effects on risk assets but could potentially be favorable for the dollar. A narrowing of spreads might pose a downside risk for the greenback, but this is a solvable issue," the bank concludes.

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Cisco spurs growth: S&P 500 and Dow rise



Key points of the day:
Cisco surged due to strong quarterly results.
CVS shares dropped after Blue Shield of California's decision to change its business relationship.
Pfizer's stocks rose following reports of a new COVID-19 drug development.
Positive statistics: Unemployment claims dropped faster than predicted.
Major index declines: Dow by 0.84%, S&P 500 by 0.77%, Nasdaq by 1.07%.

Wall Street trading ended on Thursday with a decrease in major indices. The decline of healthcare companies' stocks exerted significant pressure on the market, overshadowing the positive performance of tech sector stocks like Cisco and the energy sector. Amid favorable economic data, investors' concerns about the potential persistence of high-interest rates intensified.

One of the day's main events was the 8% decline in CVS Health shares. This occurred after the intention of Blue Shield of California to review its business relations with the company, specifically as a pharmacy benefits manager, became public. It was also reported that the company is considering partnerships with other partners, including Amazon.com.

In addition to CVS, shares of other health insurance companies like UnitedHealth and Cigna also fell, leading to an overall deterioration of the healthcare sector's performance in the S&P 500 index.

At the end of the day, the S&P 500 lost 2.7% over the past three sessions — the biggest three-day drop since March. And the Nasdaq index showed a decline of 3.4% over three days, marking its most significant fall since February of this year.

The Dow Jones Industrial Average fell by 290.91 points, or 0.84%, closing at 34,474.83 points. The rise in oil prices acted as a catalyst for the growth of Exxon Mobil and Chevron stocks, which rose by 1.9% and 1.7% respectively. This was spurred by expectations that the Chinese central bank would actively support its economy and real estate market.

However, the yield of 10-year US Treasury bonds reached its highest level since October, sparking fears that the Federal Reserve may maintain high-interest rates in light of recent positive economic indicators. Jeffrey Buchbinder of LPL Financial expressed the view that the stock market may be volatile in the short term due to this uncertainty.

According to the Department of Labor, unemployment claims decreased, pointing to ongoing tensions in the job market. The minutes from the Federal Reserve's July meeting emphasized battling inflation, amplifying uncertainty regarding future interest rate direction.

Fresh data suggests that the Federal Reserve is likely to maintain current interest rates. However, the probability of such a decision has slightly decreased, now standing at 86.5%, compared to 89% last week, as indicated in the CME Group's Fedwatch tool.

Against this backdrop, Cisco Systems shares increased by 3.3%, thanks to better-than-expected quarterly results and comments from the CEO about the potential of artificial intelligence. Pfizer shares also rose, gaining 2.9%. This was prompted by news that their updated COVID-19 vaccine successfully underwent testing against the new "Eris" variant in mice.

Biotechnology companies' stocks, such as Moderna and Novavax, saw significant growth, possibly linked to an increase in COVID-19 hospitalizations in the US. According to the latest data, the number of virus-related hospitalizations has increased by more than 40% since June.

However, despite positive news from the medical industry, retail traders felt the pressure. For instance, Walmart, the largest retailer, despite surpassing second-quarter sales estimates and raising its annual forecast, still saw a 2.2% drop in stock value.

On the S&P 500 stock market, stocks that decreased in price outnumbered those that grew, with a ratio of 2.7 to 1. The index recorded two new all-time highs and 17 lows, while the Nasdaq showed 25 new highs and 252 lows.

The trading volume in the US was comparable to the average, amounting to 11.2 billion shares, slightly exceeding the average volume of 11.0 billion shares over the last 20 trading days.

While the CBOE volatility index, based on S&P 500 options trading indicators, increased, gold futures declined. Oil prices, including WTI and Brent, showed growth.

On the foreign exchange market, the EUR/USD pair remained virtually unchanged, and the USD/JPY fell. Futures on the dollar index remained stable at 103.32.

Overall, US markets exhibited mixed dynamics, with growth in some sectors and declines in others, reflecting the complex interplay between economic, financial, and geopolitical risks.

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