CURRENCIES:

Guidance on US Dollar from US Jobs Report: The upcoming U.S. jobs report will significantly influence the U.S. dollar’s direction, with implications for EUR/USD, USD/JPY, and GBP/USD trading setups.

Sensitivity to Nonfarm Payrolls Data: Financial markets and the U.S. dollar are poised to react to February’s nonfarm payrolls, potentially impacting the Federal Reserve’s easing cycle timing.

Technical Analysis for Major Currency Pairs: The article provides a technical perspective on EUR/USD, USD/JPY, and GBP/USD.

Anticipation of February’s Job Growth: The U.S. Bureau of Labor Statistics is set to release job figures, with expectations of adding 200,000 jobs, following January’s 353,000 job increase. The unemployment rate is projected to remain at 3.7%.

Potential for Surprises: Given recent trends of employment data surpassing estimates, there’s a heightened chance of an unexpected increase in job numbers.

Impact of Hiring Activity on Monetary Policy: A significant outperformance in hiring could delay anticipated central bank easing, adjusting interest rate expectations towards a more hawkish outlook.

Possible Market Reactions: Strong job growth may boost U.S. Treasury yields and help the U.S. dollar recover recent losses. Conversely, a disappointing NFP report could reinforce expectations for imminent Fed rate cuts, potentially lowering bond yields and pressuring the U.S. dollar.

STOCK MARKET:

Market Summary

February Jobs Report Preview: The upcoming release on Friday morning is anticipated to reveal a slowdown in hiring, maintaining the unemployment rate steady.

Expectations: Analysts predict the report will show 200,000 new nonfarm payroll jobs in February, with the unemployment rate unchanged at 3.7%, mirroring January’s figures.

January’s Performance: The U.S. economy saw a significant addition of 353,000 jobs, the highest in a year, while the unemployment rate stayed at 3.7%.

Key Metrics: Wall Street’s focus will be on several figures, including nonfarm payrolls, unemployment rate, average hourly earnings, and average weekly hours worked, comparing them to previous months’ data.

Labor Market Analysis: The report aims to determine if January’s job gains were an anomaly or indicative of the labor market’s strength. Wage growth, in particular, will be scrutinized for inflationary pressures.

Economic Forecasts: Oxford Economics expects a solid but cooler job growth in February and a reversal in the spike of earnings growth from January.

Federal Reserve’s Outlook: Fed Chair Jerome Powell described the labor market as “relatively tight” but noted improving supply and demand balance. The first Fed rate cut is speculated to be in June, with three to four cuts expected throughout the year.

Wage Growth Insights: Recent data presents a mixed view on wage growth, with job changers seeing increased wage gains in February, indicating persistent labor market activity.

Job Market Dynamics: The latest JOLTS report showed a decline in job openings and quits rate, suggesting moderation in wage growth which is crucial for the Fed’s inflation targets.

Market Anticipation: Investors are keenly awaiting the report, with expectations set for the timing and number of Fed rate cuts based on the job market’s performance.

Start your CFD Shares Trading journey with VT Markets now!

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

CURRENCIES:

Euro’s Future Dependent on ECB’s Direction: The outlook for the Euro hinges on the European Central Bank’s (ECB) upcoming guidance, with focus on EUR/USD, EUR/GBP, and EUR/JPY trading strategies.

ECB Meeting Anticipation: The ECB’s meeting on Thursday is expected to maintain interest rates, marking the fourth consecutive time without change. Investors are advised to pay close attention to President Lagarde’s press conference for insights into future monetary policy.

Expected Stance from Lagarde: President Lagarde is anticipated to maintain a neutral position, avoiding any hints that might set unrealistic market expectations.

Growth and Inflation Concerns: Recent disappointing growth data and stalled disinflation progress suggest a cautious approach, despite January’s CPI in the Eurozone exceeding forecasts, indicating persistent inflation, especially in the service sector due to rapid wage growth.

ECB’s Strategy: The ECB is likely to emphasize a data-dependent approach, steering clear of committing to a fixed policy path to manage market expectations.

Euro Trading Scenarios: The euro could strengthen if the ECB suggests delaying easing measures, indicating a hawkish shift in interest rate expectations. Alternatively, hints at possible early rate cuts could negatively impact the euro.

STOCK MARKET:

Stock Market Recovery Led by Powell’s Remarks

Stocks experienced a rebound as Federal Reserve Chair Jerome Powell maintained his stance on potential interest rate cuts within the year.

Key Index Performances

• Dow Jones Industrial Average (^DJI) increased by 0.20%.
• S&P 500 (^GSPC) rose by 0.51%.
• Nasdaq Composite (^IXIC) surged by 0.58%.

Market Dynamics

U.S. stocks, particularly in the technology sector, recovered from a significant sell-off after Powell’s comments on the likelihood of interest rate cuts later in the year.

Powell’s Congressional Testimony

Powell’s upcoming testimony to Congress is anticipated to further influence stock market movements, following a period of losses exacerbated by concerns over major tech companies like Apple and Tesla.

Interest Rate Cut Outlook

Powell indicated to the House Financial Services Committee that rate cuts are probable in 2024, contingent on the economy’s performance aligning with expectations.

Investor Sentiment

Market participants are keenly awaiting more details from Powell over the next two days, looking for any shifts from the Federal Reserve’s consistent message on interest rate policies.

Notable Stock Movements

New York Community Bank (NYCB) saw a dramatic change in its stock price, initially dropping then closing up over 7% after announcing a new CEO and securing a $1 billion investment led by a group including Steven Mnuchin.

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Dear Client,

As part of our commitment to provide the most reliable service to our clients, there will be server maintenance this weekend.

Maintenance Hours :
10th of March 2024 (Sunday) 07:00 – 14:00 (GMT+2)

Please note that the following aspects might be affected during the maintenance:

1. To accommodate the daylight saving time adjustment, upon the completion of this upgrade maintenance, the system time will transition from the original GMT+2 to GMT+3.

2. The price quote and trading management will be temporarily disabled during the maintenance. You will not be able to open new positions, close open positions, or make any adjustments to the trades.

3. There might be a gap between the original price and the price after maintenance. The gaps between Pending Orders, Stop Loss and Take Profit will be filled at the market price once the maintenance is completed. If you don’t want to hold any open positions during the maintenance, it is suggested to close the position in advance.

4. Please refer to MT4/MT5 for the latest update on the completion and market opening time. Our services will be back online once the maintenance is completed.

Thank you for your patience and understanding about this important initiative.

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Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Market capitalisation, frequently referred to as ‘market cap,’ serves as a vital metric for evaluating a company’s value in the stock market, akin to a comprehensive price tag for the entire entity.

Understanding market capitalisation is pivotal as it offers traders insights into a company’s prominence within the market, thereby influencing their investment choices and risk management approaches.

Unveiling market capitalization 

Market capitalisation stands as a fundamental metric in finance, utilised to evaluate a company’s value by encompassing the total worth of all outstanding shares of its stock. 

Establishing market capitalisation occurs through an initial public offering (IPO), where an investment bank assesses the company’s value using diverse valuation techniques. This evaluation then determines the number of shares to be made available to the public and their respective pricing. 

For example, if a company’s IPO value is set at $150 million, it may opt to issue 15 million shares at $10 each or 30 million shares at $5 each, ultimately resulting in an identical initial market cap of $150 million. 

In simpler terms, market cap offers a glimpse into the prospective cost of purchasing all company’s shares at their prevailing market prices. 

Understanding market capitalisation empowers investors and traders to evaluate a company’s stature and performance within the stock market. 

Calculation methodology for market capitalisation 

The computation of market capitalisation is straightforward, entailing the utilisation of a basic formula: 

Market Cap = Current Stock Price × Total Outstanding Shares 

Market capitalisation materialises through multiplying a company’s prevailing stock price by its aggregate outstanding shares. Here, the stock price signifies the value of an individual share in the company, while the total outstanding shares denote the available shares to the public. 

Consider a hypothetical scenario involving XYZ Inc., with a current stock price of $50 per share and a total outstanding shares count of 10 million: 

Market Cap = $50 (Current Stock Price) × 10,000,000 (Total Outstanding Shares) 

Market Cap = $500,000,000 

Thus, the market capitalisation of XYZ Inc. stands at $500 million. 

Delving into diluted market capitalisation 

Both in traditional markets and cryptocurrencies, diluted market capitalisation assumes significance in assessing a company or project’s comprehensive value. It accounts for additional shares, such as stock options or tokens earmarked for team members and advisors, which possess the potential to dilute the value of existing shares or tokens. 

For instance, revisiting Company A, with a stock price of $50, 10 million outstanding shares, and potential additional shares from stock options equivalent to 1 million shares: 

Regular Market Cap = $50 (Stock Price) × 10,000,000 (Total Outstanding Shares) = $500,000,000 

Diluted Market Cap = $50 (Stock Price) × (10,000,000 + 1,000,000) (Total Outstanding Shares + Potential Additional Shares) = $550,000,000 

In this instance, Company A’s regular market capitalisation amounts to $500 million, whereas the diluted market capitalisation, factoring in potential additional shares, totals $550 million. 

Understanding both formulations facilitates investors in gauging a company’s value more accurately, thus enabling informed investment decisions grounded on the company’s potential future share structure. 

Categories of market capitalisation and investment approaches 

Grasping market capitalisation necessitates categorising companies based on their magnitude and significance within the stock market. The principal categories encompass: 

Large-cap: Characterised by sizable, well-established companies with a market capitalisation typically surpassing $10 billion. Notable examples encompass Apple, Microsoft, and Amazon. 

Opting for large-cap companies proffers stability and incremental growth over time. Although short-term gains may be moderate, these companies frequently reward investors with consistent upticks in share value and dependable dividend disbursements. 

Mid-cap: Encompassing companies with a market capitalisation ranging between $2 billion and $10 billion. Illustrative instances entail Etsy, Dropbox, and Duolingo. 

Positioned between large and small caps, mid-cap companies represent established entities operating within sectors poised for accelerated growth. Despite presenting heightened risk due to their growth phase, mid-caps offer appealing prospects for investors seeking potential growth and expansion opportunities. 

Small-cap: Encompassing companies with a market capitalisation below $2 billion, exemplified by Udemy, Getty Images, and Upwork. 

Typically, small-cap companies, often younger or niche-focused, offer substantial growth prospects. Nevertheless, they are accompanied by escalated volatility and liquidity concerns, rendering them riskier investments. Nonetheless, their agility and potential for exponential growth render them enticing for investors possessing a higher risk tolerance and a long-term perspective. 

Market capitalisation and market indices 

Market capitalisation forms the cornerstone of how market indices, such as the S&P 500, monitor market performance. Indices employ market cap-weighted methodologies, where larger companies wield greater influence, thereby implying that alterations in large-cap stocks significantly impact index movements. 

Companies such as Apple, Microsoft, and Amazon, boasting substantial market caps, exert a pronounced influence on indices like the S&P 500. Consequently, if their market caps ascend, the index follows suit, reflecting a buoyant market sentiment. 

Factors influencing market capitalisation 

Market capitalisation, or market cap, is subject to an array of factors: 

Company performance: Robust financial performance bolsters market cap, while undervalued shares may allure investors seeking growth prospects. 

Investor sentiment: Positive developments elevate market cap, whereas adverse events can precipitate a downturn. 

Industry trends: Flourishing industries tend to exhibit higher market caps, albeit market sentiment can instigate overvaluation or undervaluation of shares within these sectors. 

Grasping these factors empowers investors to ascertain whether a company’s market cap accurately mirrors its intrinsic value and whether its shares are presently undervalued or overvalued. 

In conclusion, market capitalisation emerges as a pivotal tool for investors and traders in navigating financial markets, furnishing insights into company size, stability, and growth potential, thereby guiding investment decisions and trading strategies. While market cap holds undeniable value, it is imperative to consider additional factors such as company performance and investor sentiment. By comprehending market cap’s significance and associated risks, traders can make well-informed decisions and efficaciously manage their portfolios for sustained success in finance. 

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.