The report season is driving the market

The report season is driving the market

20 January 2020 from Carlsquare

The report season has started. Last week, 23 companies in the S&P 500 index reported their Q4 results (or correspondingly). Thus, the total number of companies that have reported is now up to 44. It was the banking and finance sector that dominated last week with six major banks and investment banks reporting. Overall, 70 per cent of the companies have topped expectations on the profit side so far, where Banking and Finance is at 63 per cent and Industrial is at a 56 per cent. Notably, two out of three companies in the industrial segment have delivered weaker revenue than expected. Industry, together with technology, is the most cyclical sectors.

 

A summary of last week's reports is shown below:

 

Historically a setback often comes just before or in the beginning of the reporting season, but this has not been the case so far. Also, stocks tend to move upwards as the reporting season has been going on for a couple of weeks. It still remains to be seen how it turns out this time.

In any case, the reporting season in the US has so far had a strong start. In addition, last week the Fed also resumed buying government backed securities in the market, giving the continued a boost to stock valuation:

 

For two days in a row the intraday move has been looking pretty much the same: S&P 500 gapped up, trading continued during the day in a sideways move to finish off the trading day with a push upwards. In other words, it looks like the computers are executing a large client order right now. The trend is still rising and is moving into levels where the air is thin:

Below is the daily graph for S&P 500. As can be seen, the index is trading well above the rising EMA9 as well as MA20 acting as support on the downside.

RSI is at overbought levels. This is not a sell-signal on its own. Thus, the RSI can be overbought for some time to come. The Fed and the report season are likely to drive the market, up or down.

Bull & Bear-Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL APPLE X10 VON1
DE000VF533C5 Apple Inc. 10.00 Long SEK 0.002 -
BULL APPLE X10 VON10
DE000VP2RC04 Apple Inc. 10.00 Long SEK 0.04 -
BULL APPLE X10 VON11
DE000VP3MTV0 Apple Inc. 10.00 Long SEK 0.032 -
BULL APPLE X10 VON12
DE000VP3NQ50 Apple Inc. 10.00 Long SEK 0.016 -
BULL APPLE X10 VON15
DE000VP9V6U9 Apple Inc. 10.00 Long SEK 0.086 0.09
BULL APPLE X10 VON14
DE000VP9VHN0 Apple Inc. 10.00 Long SEK 0.176 0.18
BULL APPLE X10 VON18
DE000VV11SJ7 Apple Inc. 10.00 Long SEK 0.72 0.724
BULL APPLE X10 VON19
DE000VV19AU5 Apple Inc. 10.00 Long SEK 1.90 1.91
BULL APPLE X10 VON20
DE000VV2K3W0 Apple Inc. 10.00 Long SEK 5.36 5.38
BULL APPLE X10 VON21
DE000VV3R221 Apple Inc. 10.00 Long SEK 13.18 13.23
BULL APPLE X10 VON22
DE000VV67GW7 Apple Inc. 10.00 Long SEK 38.46 38.60
BULL APPLE X10 VON23
DE000VV8Z9Y0 Apple Inc. 10.00 Long SEK 89.16 89.47
BULL APPLE X10 VON17
DE000VX8WXW8 Apple Inc. 10.00 Long SEK 0.354 0.358
BULL WTI X10 VON53
DE000VV34D70 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.006 -
BULL WTI X10 VON46
DE000VX5RHK2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON48
DE000VX8XQQ2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON49
DE000VX8ZH15 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON51
DE000VX9K3V1 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.002 -
BULL WTI X10 VON60
DE000VV05NH4 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 2.60 2.63
BULL WTI X10 VON59
DE000VV0YY82 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.78 0.788

The tech heavy Nasdaq 100 is moving straight upwards:

As for S&P 500, the RSI-indicator is at overbought levels. The upwards sloping EMA9 and MA20 function as support on the downside.

Bull & Bear-Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL APPLE X10 VON1
DE000VF533C5 Apple Inc. 10.00 Long SEK 0.002 -
BULL APPLE X10 VON10
DE000VP2RC04 Apple Inc. 10.00 Long SEK 0.04 -
BULL APPLE X10 VON11
DE000VP3MTV0 Apple Inc. 10.00 Long SEK 0.032 -
BULL APPLE X10 VON12
DE000VP3NQ50 Apple Inc. 10.00 Long SEK 0.016 -
BULL APPLE X10 VON15
DE000VP9V6U9 Apple Inc. 10.00 Long SEK 0.086 0.09
BULL APPLE X10 VON14
DE000VP9VHN0 Apple Inc. 10.00 Long SEK 0.176 0.18
BULL APPLE X10 VON18
DE000VV11SJ7 Apple Inc. 10.00 Long SEK 0.72 0.724
BULL APPLE X10 VON19
DE000VV19AU5 Apple Inc. 10.00 Long SEK 1.90 1.91
BULL APPLE X10 VON20
DE000VV2K3W0 Apple Inc. 10.00 Long SEK 5.36 5.38
BULL APPLE X10 VON21
DE000VV3R221 Apple Inc. 10.00 Long SEK 13.18 13.23
BULL APPLE X10 VON22
DE000VV67GW7 Apple Inc. 10.00 Long SEK 38.46 38.60
BULL APPLE X10 VON23
DE000VV8Z9Y0 Apple Inc. 10.00 Long SEK 89.16 89.47
BULL APPLE X10 VON17
DE000VX8WXW8 Apple Inc. 10.00 Long SEK 0.354 0.358
BULL WTI X10 VON53
DE000VV34D70 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.006 -
BULL WTI X10 VON46
DE000VX5RHK2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON48
DE000VX8XQQ2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON49
DE000VX8ZH15 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON51
DE000VX9K3V1 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.002 -
BULL WTI X10 VON60
DE000VV05NH4 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 2.60 2.63
BULL WTI X10 VON59
DE000VV0YY82 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.78 0.788

However, one should never forget the large economy in the east, China. All macro data indicate that Chinese economy should slow down quite significantly. On Friday, the Chinese GDP figure came in at a growth rate corresponding to 6.1 percent, which also is a considerable slowdown. The slowdown would probably have been even more clear if the Chinese authorities had chosen to show the correct figures. However, the market is aware of that the numbers from China usually are fishy/manipulated to a certain extent.

Below shows the GDP-growth for the Chinese economy. As can be seen, China's GDP growth has been on a sloping curve since 2007. Note, however, that it is one of the world's largest countries and with figures that put almost all other countries on the sideline:

China’s Shanghai Stock Exchange Index (SSEC) has also been lagging other large western stock indices the last few days. Shanghai is a well-studied retail market that is governed by speculative trading, which can provide fast and unmotivated price swings. From time to time funds operated by the government step in and drive the market in a specific direction and it does not always have to be upwards.

The question is whether the recent price hike in SSEC has taken place to create a better trade negotiating position for the country with Donald Trump? And now that Phase 1 of the trade agreement has been signed, the share prices fall again:

This is a development that should be kept under close watch as SSEC has a tendency to guide other stock exchanges with 6-12 months of legislation. Also not how closely connected Shanghai is with Sweden’s OMXS30:

OMXS30 shown in the graph below has been consolidating and thus lagging S&P 500. On Friday the index did however manage to break away. MACD has generated a weak buy signal and EMA9 is once again upwards sloping:

A resistance level is close in sight, but company reports is likely to drive the market. Among the OMXS30-companies, Sandvik and Ericsson will release their reports this week.

Bull & Bear-Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL APPLE X10 VON1
DE000VF533C5 Apple Inc. 10.00 Long SEK 0.002 -
BULL APPLE X10 VON10
DE000VP2RC04 Apple Inc. 10.00 Long SEK 0.04 -
BULL APPLE X10 VON11
DE000VP3MTV0 Apple Inc. 10.00 Long SEK 0.032 -
BULL APPLE X10 VON12
DE000VP3NQ50 Apple Inc. 10.00 Long SEK 0.016 -
BULL APPLE X10 VON15
DE000VP9V6U9 Apple Inc. 10.00 Long SEK 0.086 0.09
BULL APPLE X10 VON14
DE000VP9VHN0 Apple Inc. 10.00 Long SEK 0.176 0.18
BULL APPLE X10 VON18
DE000VV11SJ7 Apple Inc. 10.00 Long SEK 0.72 0.724
BULL APPLE X10 VON19
DE000VV19AU5 Apple Inc. 10.00 Long SEK 1.90 1.91
BULL APPLE X10 VON20
DE000VV2K3W0 Apple Inc. 10.00 Long SEK 5.36 5.38
BULL APPLE X10 VON21
DE000VV3R221 Apple Inc. 10.00 Long SEK 13.18 13.23
BULL APPLE X10 VON22
DE000VV67GW7 Apple Inc. 10.00 Long SEK 38.46 38.60
BULL APPLE X10 VON23
DE000VV8Z9Y0 Apple Inc. 10.00 Long SEK 89.16 89.47
BULL APPLE X10 VON17
DE000VX8WXW8 Apple Inc. 10.00 Long SEK 0.354 0.358
BULL WTI X10 VON53
DE000VV34D70 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.006 -
BULL WTI X10 VON46
DE000VX5RHK2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON48
DE000VX8XQQ2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON49
DE000VX8ZH15 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON51
DE000VX9K3V1 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.002 -
BULL WTI X10 VON60
DE000VV05NH4 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 2.60 2.63
BULL WTI X10 VON59
DE000VV0YY82 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.78 0.788

The German DAX index has also lagged S&P 500. Even though the strong ending of the week, the index did not manage to break above its previous high from early January. See graph below:

 

The shorter trend is nevertheless upwards sloping and report season is likely to drive the German market as well.

Bull & Bear-Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL APPLE X10 VON1
DE000VF533C5 Apple Inc. 10.00 Long SEK 0.002 -
BULL APPLE X10 VON10
DE000VP2RC04 Apple Inc. 10.00 Long SEK 0.04 -
BULL APPLE X10 VON11
DE000VP3MTV0 Apple Inc. 10.00 Long SEK 0.032 -
BULL APPLE X10 VON12
DE000VP3NQ50 Apple Inc. 10.00 Long SEK 0.016 -
BULL APPLE X10 VON15
DE000VP9V6U9 Apple Inc. 10.00 Long SEK 0.086 0.09
BULL APPLE X10 VON14
DE000VP9VHN0 Apple Inc. 10.00 Long SEK 0.176 0.18
BULL APPLE X10 VON18
DE000VV11SJ7 Apple Inc. 10.00 Long SEK 0.72 0.724
BULL APPLE X10 VON19
DE000VV19AU5 Apple Inc. 10.00 Long SEK 1.90 1.91
BULL APPLE X10 VON20
DE000VV2K3W0 Apple Inc. 10.00 Long SEK 5.36 5.38
BULL APPLE X10 VON21
DE000VV3R221 Apple Inc. 10.00 Long SEK 13.18 13.23
BULL APPLE X10 VON22
DE000VV67GW7 Apple Inc. 10.00 Long SEK 38.46 38.60
BULL APPLE X10 VON23
DE000VV8Z9Y0 Apple Inc. 10.00 Long SEK 89.16 89.47
BULL APPLE X10 VON17
DE000VX8WXW8 Apple Inc. 10.00 Long SEK 0.354 0.358
BULL WTI X10 VON53
DE000VV34D70 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.006 -
BULL WTI X10 VON46
DE000VX5RHK2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON48
DE000VX8XQQ2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON49
DE000VX8ZH15 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON51
DE000VX9K3V1 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.002 -
BULL WTI X10 VON60
DE000VV05NH4 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 2.60 2.63
BULL WTI X10 VON59
DE000VV0YY82 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.78 0.788

Time for Boliden to test previous top

Swedish Boliden will release its Q4 first on February 13. The share broke above Fib 23.6 on Friday with an attempt to test the SEK 265.5-level but without success:

EMA9 has turned upwards sloping and MACD has generated a buy signal. In case of a break above this level the upside to the SEK 287.5-level is appealing. On the downside, Fib 23.6 at SEK 258 serves as support.

Bull & Bear-Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL APPLE X10 VON1
DE000VF533C5 Apple Inc. 10.00 Long SEK 0.002 -
BULL APPLE X10 VON10
DE000VP2RC04 Apple Inc. 10.00 Long SEK 0.04 -
BULL APPLE X10 VON11
DE000VP3MTV0 Apple Inc. 10.00 Long SEK 0.032 -
BULL APPLE X10 VON12
DE000VP3NQ50 Apple Inc. 10.00 Long SEK 0.016 -
BULL APPLE X10 VON15
DE000VP9V6U9 Apple Inc. 10.00 Long SEK 0.086 0.09
BULL APPLE X10 VON14
DE000VP9VHN0 Apple Inc. 10.00 Long SEK 0.176 0.18
BULL APPLE X10 VON18
DE000VV11SJ7 Apple Inc. 10.00 Long SEK 0.72 0.724
BULL APPLE X10 VON19
DE000VV19AU5 Apple Inc. 10.00 Long SEK 1.90 1.91
BULL APPLE X10 VON20
DE000VV2K3W0 Apple Inc. 10.00 Long SEK 5.36 5.38
BULL APPLE X10 VON21
DE000VV3R221 Apple Inc. 10.00 Long SEK 13.18 13.23
BULL APPLE X10 VON22
DE000VV67GW7 Apple Inc. 10.00 Long SEK 38.46 38.60
BULL APPLE X10 VON23
DE000VV8Z9Y0 Apple Inc. 10.00 Long SEK 89.16 89.47
BULL APPLE X10 VON17
DE000VX8WXW8 Apple Inc. 10.00 Long SEK 0.354 0.358
BULL WTI X10 VON53
DE000VV34D70 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.006 -
BULL WTI X10 VON46
DE000VX5RHK2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON48
DE000VX8XQQ2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON49
DE000VX8ZH15 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON51
DE000VX9K3V1 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.002 -
BULL WTI X10 VON60
DE000VV05NH4 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 2.60 2.63
BULL WTI X10 VON59
DE000VV0YY82 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.78 0.788

Further upside in Swedbank 

The Swedbank share managed to close above Fib 61.8 as well as falling MA200 on Friday. As can be seen in the graph below, some upside still exists in the share:

The resistance level is made more visible in the weekly graph below:

Additional worth noticing from the weekly graph is the positive divergence between the share price and MACD.

Bull & Bear-Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL APPLE X10 VON1
DE000VF533C5 Apple Inc. 10.00 Long SEK 0.002 -
BULL APPLE X10 VON10
DE000VP2RC04 Apple Inc. 10.00 Long SEK 0.04 -
BULL APPLE X10 VON11
DE000VP3MTV0 Apple Inc. 10.00 Long SEK 0.032 -
BULL APPLE X10 VON12
DE000VP3NQ50 Apple Inc. 10.00 Long SEK 0.016 -
BULL APPLE X10 VON15
DE000VP9V6U9 Apple Inc. 10.00 Long SEK 0.086 0.09
BULL APPLE X10 VON14
DE000VP9VHN0 Apple Inc. 10.00 Long SEK 0.176 0.18
BULL APPLE X10 VON18
DE000VV11SJ7 Apple Inc. 10.00 Long SEK 0.72 0.724
BULL APPLE X10 VON19
DE000VV19AU5 Apple Inc. 10.00 Long SEK 1.90 1.91
BULL APPLE X10 VON20
DE000VV2K3W0 Apple Inc. 10.00 Long SEK 5.36 5.38
BULL APPLE X10 VON21
DE000VV3R221 Apple Inc. 10.00 Long SEK 13.18 13.23
BULL APPLE X10 VON22
DE000VV67GW7 Apple Inc. 10.00 Long SEK 38.46 38.60
BULL APPLE X10 VON23
DE000VV8Z9Y0 Apple Inc. 10.00 Long SEK 89.16 89.47
BULL APPLE X10 VON17
DE000VX8WXW8 Apple Inc. 10.00 Long SEK 0.354 0.358
BULL WTI X10 VON53
DE000VV34D70 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.006 -
BULL WTI X10 VON46
DE000VX5RHK2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON48
DE000VX8XQQ2 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON49
DE000VX8ZH15 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.001 -
BULL WTI X10 VON51
DE000VX9K3V1 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.002 -
BULL WTI X10 VON60
DE000VV05NH4 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 2.60 2.63
BULL WTI X10 VON59
DE000VV0YY82 WTI Light Sweet Crude Oil Future Mar 2023 10.00 Long SEK 0.78 0.788

Scary formation in EUR/USD  

A scary bearish head-and-sholder formation can be found in the EUR/USD. A break below the neckline at 1.1 calls for furth downside:

 

Support can be found at the 1.1-level.