Equities report: Equity traders await Fed interest rate decision.

US stock markets are stuck in quicksand, holding steady until the Fed’s interest rate decision later on today, as fears of a banking crisis echo through the markets. In this report we aim to present the recent fundamental and economic news releases that impacted the US stock markets, look ahead at the upcoming events that could affect their performance and conclude with a technical analysis.

US stock market traders keep the ship level

All three major US stock market indices, namely the S&P 500, the Dow Jones 30 and the NASDAQ 100 recorded a slight decline since last week. The release of the preliminary US GDP rate for Q1, was indicative of a slowdown in US economic growth, as the impact of high interest rates are evidently becoming more visible in financial data releases. On the other hand, with the earnings season in full swing, we highlight the positive earnings releases by high profile companies such as Meta (#FB), Boeing (#BA), eBay(#EBAY), Exxon Mobil (#XOM) و Ford (#F) in the past week, which have aided to restoring consumer confidence and boosting traders optimism in the markets, as the economic downturn from high interest rates, has yet to be seen in equities. Despite the persistent inflationary pressures, firms on some occasions, were able to outperform the predictions made by analysts, by posting stronger results in addition to providing optimistic economic forecasts for future business revenue. On the other hand, US regional banks have been pummeled following weaker than expected earnings releases, combined with the crash of First Republic Bank  have further heightened fears of a continued banking crisis which could in theory, spiral into widespread panic in the equities market, as fears of a recession loom. The murky waters surrounding First Republic were known beforehand, yet the surprise release that the bank had experienced $100bn in withdrawals from deposits, stoked fear in equity المتداولون, despite multiple re-assurances by policymakers that the banking system is ‘sound and resilient’. The reality appears to be that the financial stress has yet to subside, even as JPMorgan has once again come to the rescue by acquiring yet another failed bank. The aforementioned events have facilitated an increase in التقلب in the equities markets and as a result have pushed markets lower since last week, as traders await the Fed’s interest rate decision, that is due today. Currently the Fed Funds Futures assign an 86% probability for a 25-basis point hike scenario to materialize, as such traders may be placing, heavier emphasis on the forward guidance released by the Fed, where depending on the nature of the wording used, may provide equity traders with hints as to how the FOMC might proceed in the future. Moreover, Fed Chair Powell’s speech following the decision could further provide insight into the inner workings behind the Fed’s decision and as such should any dovish sentiment be detected, we may see the equity markets gaining and vice versa. Lastly, we note that another market moving event is expected on Friday, namely the US Employment report and based on the recent announcements by firms such as Walmart, Meta, Walt Disney and many others who reduced their employee headcount, and may be shown in the NFP figure.

Apple goes banking

Apple recently kickstarted its high yield savings account in collaboration with Goldman Sachs, offering an eye watering 4.15% annual return compared to market equivalents.  Following the launch, the new program appears to have brought in, approximately $400 million deposits on the first day it was released and nearly $990 million in the first four days. Taking the banking industry by surprise, it would appear that Apple has capitalized on growing consumer discontent with low interest rates offered by traditional banks and jumped on the opportunity to tap into the market. In addition, Apple’s strategic move becomes even more appealing for consumers since the maximum amount that can be deposited is $250k which falls under the protected deposit guarantee policy of the FDIC. Lastly, we note Apple’s earnings report, which is due out on Thursday could provide support for the stock should EPS و Revenue estimates beat expectations it could propel #APPL to reach YTD highs.

التحليل الفني

#AAPL Daily Chart

Support: 164.00 (S1), 159.00 (S2), 152.70 (S3)

Resistance: 169.75 (R1), 174.90 (R2), 179.35 (R3)

Looking at #AAPL Daily chart we observe investors reacting favorably to news that Apple’s pioneering collaboration with Goldman Sachs, has reaped positive results و aided to the stocks ascent near the $170 level. We hold a bullish outlook for Apple as the stock continues to validate our upwards moving trendline and adding support to our case is the RSI indicator which edges closer to the reading of 70. For our bullish outlook to continue, we would like to see a clear break above the 167.75 (R1) resistance line with the next potential target for the bulls being the 174.90 (R2) resistance barrier. For a bearish outlook, we would like to see a clear break below the 164.00 (S1) support level, with the next possible target for the bears being the 159.00 (S2) support base.

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