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Stocks dip ahead of FOMC and big tech earnings

Fawad Razaqzada Fawad Razaqzada 27/01/2021
Stocks dip ahead of FOMC and big tech earnings Stocks dip ahead of FOMC and big tech earnings
Stocks dip ahead of FOMC and big tech earnings Fawad Razaqzada
But will the weakness once again be bought? I think it will.

European stocks and US index futures have dropped noticeably in the first half of today’s session, along with other risk-sensitive assets, while the US dollar has rebounded. Sentiment has been hurt in part due to concerns about the vaccine delays in Europe, while profit-taking ahead of key technology earnings reports and the conclusion of the Federal Reserve’s policy meeting also weighed on asset prices.

Fed to dismiss QE taper talks

The Federal Reserve will almost certainly leave interest rates and the pace of asset purchases unchanged at the conclusion of the FOMC meeting at 19:00 GMT (14:00 ET). While hopes for a strong recovery have sent US stock indices to record highs, Fed Chair Jerome Powell is likely to remain cautious and dismiss talks of an exit from stimulus.

Apple, Facebook, Tesla, Microsoft… and GameStop

On a micro level, strong quarterly sales from Microsoft sent its shares higher overnight, with the market also busy keeping an eye on GameStop’s wild swings. The latter saw its shares surge another 60% or so in pre-market following news that Melvin Capital and Citron had closed out their short positions, before dipping again.

But surely the focus is going to turn to the bigger players today with Apple, Facebook and Tesla are all due to report earnings after the close.

Earnings and revenue expectations:

 
  • Apple: Wall Street analysts expect Apple to break the $100 billion barrier in quarterly revenues. Specifically, on average they predict a 12% jump in revenue to $103 billion, with an earnings per share of $1.41.
  • Tesla: Analyst expect the electric car maker to post its first-ever quarter of achieving $10 billion in revenue and sixth straight quarterly profit, after a poster year for the company. Its Adjusted earnings per share (EPS) are expected to come in at $1.01 compared with $0.43 from a year-ago period, while revenues are seen climbing to $10.33 billion vs. $7.4 billion last year.
  • Facebook: The social network has been among the major beneficiaries of the pandemic as millions of people worked from home. Analysts estimate an EPS of $3.16 for Q4 2020 vs. $2.56 in Q4 2019, while quarterly revenue is seen rising to $26.3 billion from $21.1 in previous year. The key Monthly Active User metric is expected to climb to 2.7 billion.
Given the prospects of these tech companies beating expectations and the Fed remaining dovish, don’t be surprised if stock markets were to bounce back and the dollar to resume lower later in the session.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

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Mohammed Zidan
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Mohamed Zidan
Chief Market Strategist, Dubai

Mohamed Zidan is a chief market strategist in Dubai and CFA Level III candidate. He reports to London office and has more than eight years of experience focusing on Forex, Commodities, Indices and global economic developments as well as central bank policies and intermarket analysis. worked as FX Analyst, and Strategist in several different organizations and for various departments. He holds a bachelor’s degree from Cairo University in Egypt. Mohamed Zidan is a regular guest on several major TV networks such as; CNBC Arabia, Fran24 Arabic, Alarabiya , Dubai TV, Sama Dubai, Skynews Arabia, Saudi National News, and Egypt National news.

Zidan presents insight to the markets movements, holds open discussions and relays possibilities related to the world’s financial market and economies.

Mohamed Zidan has been invited as a guest speaker for several international seminars. Zidan provides daily and weekly outlook for the markets. His experience ranges from currencies, commodities, stocks and options. he applies a top-down, global macro approach combined with price action to generate trade ideas and anticipate the next move.

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Victor Golovtchenko
Global Macro Analyst, Sofia

Victor Golovtchenko has been analysing and trading foreign exchange markets since 2004, and is actively involved in the online media space since 2014. His tenure as a Senior Editor at a major brokerage industry news outlet was followed with a breakthrough into the financial news space with the brand new TradeStar website.

As an affectionate macro-focused analyst, he has an integrated framework to look at financial markets as a whole, identifying gaps between currencies, stocks, bonds, and other asset classes to get a core complete picture of the macroeconomic environment.

Fawad Razaqzada
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Fawad Razaqzada
Market Analyst, London

Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms. He leverages years of market knowledge to provide retail and professional traders worldwide with succinct fundamental & technical analysis. Fawad also offers trading education to help shorten the learning curves of developing traders.
 
His colleagues consider him an expert at reading price action on the charts. This together with his deep understanding of economics and fundamental analysis, and trading experience, puts him in a great position to forecast short term price movements. Fawad covers a wide range of markets, including FX, commodities, stock indices and cryptocurrencies and his comments are regularly quoted by the leading financial publications such as Reuters and Market Watch. In addition to ThinkMarkets, Fawad also provides analysis and premium trade signals on his own website at TradingCandles.com.
 
 

Carl Capolingua
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Carl Capolingua
Market Analyst, Melbourne

Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions. Specialising in Australian and US stock markets in particular, Carl uses a top-down approach to assess the global macro picture before using both technical and fundamental techniques to select stocks. He regularly appears as an expert commentator on a number of media outlets throughout the Asia-Pacific region.
 
 
 

Mohammed Zidan
Mohamed Zidan
He has more than eight years of experience focusing on Forex, Commodities, Indices and global economic developments as well as central bank policies and intermarket analysis.
Victor Golovtchenko
Victor Golovtchenko
Victor Golovtchenko has been trading on the foreign exchange markets since 2004, and is actively involved in the online media space since 2014. His tenure as a Senior Editor follows his role with TradeStar.
Fawad Razaqzada
Fawad Razaqzada
Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms.
Carl Capolingua
Carl Capolingua
Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions.

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