Forex Market Analysis: Dollar and Tesla 25 Jan 2024

Forex Markets Analysis: 25 Jan 2024

CURRENCIES:

  • U.S. Dollar faced a decline despite positive economic data on Wednesday
  • Potential for a reversal in the dollar’s fortunes in the upcoming days
  • Market attention shifts to the fourth-quarter U.S. GDP report

U.S. Dollar Technical Outlook:

  • Analysis focuses on three major FX pairs: EUR/USD, USD/JPY, and GBP/USD
  • Despite better-than-expected PMI results, the dollar retreated
  • Possibility of a turnaround if key economic data continues to surprise positively

Fourth-Quarter U.S. GDP Report:

  • Scheduled for release on Thursday
  • Forecasted economic activity expansion of 2% at an annualized rate
  • GDP considered backward-looking but provides insights into economic health

Key Points to Monitor:

  • Close attention to household expenditures, a significant growth engine
  • Consumer spending remains robust, contributing to a positive GDP outlook
  • A strong GDP report could impact expectations of a Fed rate cut in March

Implications for the U.S. Dollar:

  • Positive GDP scenario may reduce odds of a Fed rate cut
  • Traders could adjust dovish expectations for the FOMC’s policy path
  • Potential for a more favorable backdrop for the U.S. dollar

STOCK MARKET:

Tesla Q4 Earnings Overview:

  • Stock drops due to earnings miss and a cautious full-year production outlook
  • CEO Elon Musk confirms the launch of the company’s next-gen vehicle in H2 2025

Financial Performance in Q4:

  • Top-line revenue of $25.17 billion, slightly below the estimated $25.87 billion
  • Revenue increased by approximately 3% compared to the previous year
  • Adjusted EPS at $0.71, missing the estimated $0.73
  • Adjusted net income of $2.486 billion, falling short of the $2.61 billion expected by the Street

Full-Year Production Outlook:

  • Tesla anticipates a notably lower vehicle volume growth rate compared to 2023
  • Launch of the next-gen vehicle at Gigafactory Texas cited as a reason for the production slowdown
  • Unlikely to meet Street estimates of 2.19 million vehicle production for 2024, signaling a 21% increase from 2023

Next-Gen Vehicle and Production Plans:

  • Progress on the next-gen platform highlighted in the earnings release
  • Musk emphasizes the revolutionary manufacturing system for the low-cost vehicle
  • Production of the next-gen vehicle scheduled for the second half of 2025

Factors Contributing to Profitability Drop:

  • Downward pressure on margins due to cost-cutting efforts initiated in late 2022
  • Q4 gross margin at 17.6%, below the estimated 18.1% and a decline from the previous year
  • Various challenges, including Hertz shedding EVs, price cuts in China, production halt in Berlin, and Musk’s stock demand, impacting profitability

Delivery and Production Statistics:

  • Q4 deliveries surpass Street estimates with 484,507 deliveries
  • All-time record quarter for Tesla, beating the previous record of 466,000 units in Q2 of the last year
  • Yearly vehicle deliveries grow by 38% to 1.81 million, production increases by 35% to 1.85 million

Cybertruck and Musk’s Concerns:

  • Cybertruck deliveries not specified, but demand described as “off the hook”
  • Musk addresses concerns about securing greater control for AI ambitions, citing potential loss of influence in the future
  • Expresses worries about being voted out by shareholder advisory firms like ISS and Glass Lewis

Elon Musk’s Recent Activities:

  • Speaks at a symposium about antisemitism in Krakow, Poland, on January 22, 2024
  • Highlights his desire to be an effective steward of powerful technology, expressing concerns about potential loss of control due to shareholder decisions.

Notification of Server Upgrade – January 25, 2023

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 :
27th of January 2024 (Saturday) 01:30-03:30 (GMT+2)

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

1. Client portal and VT Markets App will be unavailable. In addition, all their functions will be limited.

2. The price quote and trading management on MT4 and MT5 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.

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

Dividend Adjustment Notice – January 25, 2024

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.

Dividend Adjustment Notice – January 25, 2024

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.

Forex Market Analysis: Precious Metal Trends 25 Jan 2024

Forex Daily Analysis: 25 Jan 2024

CURRENCIES:

Overview: Gold and Silver Struggle

  • Heavyweight US data releases anticipated later this week.
  • Latest Fed rate expectations indicate six quarter-point cuts this year.
  • Gold and Silver prices experience challenges, but the sell-off is contained.

US Rate Expectations: A Shift in Outlook

  • New assessment suggests six quarter-point cuts, with the first expected in May.
  • Contrast to the previous week, where seven cuts were forecasted, starting in March.
  • The UST 2-year daily yield rises from 4.14% to 4.40%, signaling a moderation in rate cut expectations.

Upcoming US Economic Data Releases

  • Three key releases scheduled for the week: US Q4 GDP on Thursday, Durable Goods report, and Core PCE report on Friday.
  • These releases closely monitored by the Fed in anticipation of next week’s FOMC meeting.

Gold Price Action and Trading Range

  • Gold currently trades within a $2,000/oz. – $2,040/oz. range.
  • Series of higher lows provide support, while price action around the 20- and 50-day moving averages remains uncertain.
  • Potential break lower could target prior support at $1,987/oz.

Retail Trader Sentiment for Gold

  • Retail trader data indicates 59.13% are net-long.
  • Changes show a 7.39% decrease in net long positions compared to yesterday.
  • Weekly changes indicate a 4% reduction in net long positions.

Silver’s Recovery and Chart Analysis

  • Silver rebounds today after a multi-week sell-off from late December.
  • Brief dip below $22/oz. on Monday, followed by a recovery, currently trading approximately 1.1% higher.
  • The cluster of lows around $20.71 from early October may face renewed pressure.

STOCK MARKET:

S&P 500 Soars to New Highs:

  • The S&P 500 (^GSPC) continues its record-setting rally, surging nearly 0.3% to achieve a new closing high of 4,864.61.
  • Nasdaq Composite (^IXIC) also gains momentum, rising 0.4%, while Dow Jones Industrial Average (^DJI) experiences a slight dip of about 0.2% following its breakthrough above 38,000 on Monday.

Sector Performances:

Winners:

  • Consumer Staples (XLP) and Communications Services (XLC) lead gains in the S&P 500.
  • Staples surge over 1%, with notable quarterly results from Procter & Gamble (PG) and Verizon (VZ).

Earnings Impact on Dow:

  • Dow faces a setback as 3M (MMM) drops over 10% due to a 2024 profit outlook below Wall Street’s expectations.

Earnings-Driven Moves:

Positive Outlook Lifts Airlines:

  • United Airlines (UAL) provides an optimistic 2024 profit forecast, boosting its shares by 5%.
  • Positive momentum extends to other airlines, including Delta (DAL) and American Airlines (AAL).

Tech Focus – Netflix (NFLX):

  • Netflix (NFLX) takes the spotlight with earnings reported after the bell.
  • The company announces a deal with TKO Group’s WWE (TKO), impacting TKO shares positively.

Ongoing Developments:

3M (MMM) Earnings Disappointment:

  • Dow affected by a more than 10% drop in 3M (MMM) shares due to a below-expectation 2024 profit outlook.

United Airlines (UAL) Resilience:

  • Despite warnings about the Boeing 737 Max 9 planes’ grounding impact, United Airlines (UAL) shares rise with an upbeat 2024 profit forecast.

Netflix (NFLX) Partnership:

  • Netflix (NFLX) strikes a deal with TKO Group’s WWE (TKO), leading to a nearly 15% rise in TKO shares.

Outlook and Market Dynamics:

  • Earnings in various sectors contribute significantly to market movements.
  • Ongoing focus on corporate America’s health and economic indicators.
  • Continued attention to tech-driven rallies and sector-specific earnings for market insights.

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Dividend Adjustment Notice – January 24, 2024

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.

Dividend Adjustment Notice – January 24, 2024

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.

Forex Market Analysis: Record Highs in the US and a Prolonged Rout in Chinese Equities 23 Jan 2024

Forex Markets Analysis: 23 Jan 2024

CURRENCIES:

  • The NASDAQ, S&P 500, and Dow Jones have all achieved new record highs, signaling a complete reversal of the recent stock market dip from December to early January.
  • In Japan, the Nikkei 225 has hit a fresh 34-year high, while China’s Hang Seng is experiencing ongoing weakness, attributed to a battle between the Federal Reserve (Fed) and the financial markets.
  • The Fed is attempting to talk down interest rates, but market expectations for rate cuts persist, leading to a positive overall sentiment despite some success in lowering rate cut expectations.
  • A “Fed blackout period” is currently in effect, with no speeches or comments from Fed members expected ahead of the FOMC meeting on January 31st, creating a quieter news period related to the Fed.
  • Turning to the US dollar, it is trading around a 50% retracement level, with the 200-day and 50-day moving averages serving as significant support and resistance levels.
  • The US Core PCE, the Fed’s preferred measure of inflation, is anticipated to be a major event for the dollar during the week, potentially influencing its performance.
  • In the Eurodollar market, trading within small ranges is supported by the 200-day simple moving average, and upcoming factors such as the German and Eurozone PMIs, along with the ECB monetary policy meeting, could play a crucial role in shaping Eurodollar performance in the coming week.

STOCK MARKET:

  • The ongoing equity rout in China has led to an unprecedented $38 trillion gap between the market capitalization of the US stock market and that of Hong Kong and China combined, setting a new record.
  • Michael Liang, Chief Investment Officer at Foundation Asset Management HK Ltd., notes that while China presents value, the lack of catalysts is hindering its performance, while the US market benefits from momentum and a favorable economy.
  • Global investor sentiment toward China is painted negatively as steep losses continue, contrasting with US stocks that have reached record highs, fueled by a technology rally and optimism about potential Federal Reserve interest rate cuts.
  • Since February 2021, Chinese stocks have witnessed a loss of over $6.3 trillion in market value, while US equities have gained $5.3 trillion over the same period.
  • Doubts over Beijing’s long-term economic agenda and strategic competition with the US are contributing to what started as a performance-driven exodus potentially becoming a structural shift.
  • Bloomberg strategists, including Kumar Gautam, suggest that China’s correction might continue, estimating a 51% probability of the MSCI China Index trading below its peak for an average of 35 months.
  • Despite the prolonged rout, some investors see potential for a technical rebound due to attractive valuations. The MSCI China Index is now 60% cheaper than the US equity benchmark based on earnings-based valuations.
  • The MSCI Inc.’s key gauge for Chinese equities trades at about eight times 12-month forward estimated earnings, significantly lower than the S&P 500 Index’s 20 times.
  • Currently, there is little indication of an end to the challenging start of 2024 for Chinese equities, with a gauge of Chinese stocks listed in Hong Kong already losing 13%, making it the worst-performing major global benchmark index in less than a month.
  • Chinese stocks listed in Hong Kong already losing 13%, making it the worst-performing major global benchmark index in less than a month.

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Dividend Adjustment Notice – January 23, 2024

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.

Dividend Adjustment Notice – January 23, 2024

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.

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