U.S. Dollar Steadies Ahead of Fed Officials Comments
The U.S. dollar steadied on Monday in Asia as traders await remarks by a number of Federal Reserve officials this week.
Having signalled further rate rises as recently as December, the U.S. central bank announced it is putting plans for further rate hikes on hold and pledged to be “patient” on further moves in its January meeting, citing muted inflation and rising risks to global economic growth.
Market watchers will be tuned in to remarks by Cleveland Fed President Loretta Mester on Monday and St Louis Fed President James Bullard on Friday. Fed Chairman Jerome Powell is due to speak on Wednesday, but it is unclear if his remarks will address monetary policy.
The U.S. dollar index that tracks the greenback against a basket of other currencies was up 0.1% at 95.407 by 10:45 PM ET (03:45 GMT).
Stronger-than-expected U.S. jobs data were cited as providing support to the greenback today.
The report showed the U.S. economy created 304,000 new jobs, the highest in 11 months, beating forecasts for 165,000 jobs.
The GBP/USD pair was little changed at 1.3077. The Bank of England is expected to keep interest rates on hold at its upcoming meeting on Thursday, amid growing uncertainty over the prospect of Britain exiting the European Union on March 29 with no deal in place.
Elsewhere, the AUD/USD pair was down 0.2% at 0.7232. The Reserve Bank of Australia is scheduled to hold a policy meeting this week.
The USD/JPY pair edged up 0.1% at 109.61.
China’s financial markets are closed this week for the Lunar New Year holiday.
EUR/USD May Hold Steady as Investors Weigh Italy, Brexit Outcome
- Effects of recession in Italy still to be seen
- Investors holding steady on Brexit outcome
The Euro – and broadly speaking European assets – have been under pressure from Brexit and forecasts of sluggish growth against the backdrop of continental ideological re-alignment. Italy recently slipped into a technical recession and Brexit has been in a stalemate since the House of Commons voted on amendments to the Prime Minister’s new plan.
EUR/USD has lost almost 10 percent of its value since April, illustrating the profound effect trade wars and regional political unrest have on the currency. Since January 10, the pair was closing below a resistance that was broken on January 25. The pair rose 0.92 percent and has since continued to trade higher until it reached 1.1478.
Underlying momentum and optimism for the Euro’s potential upward trajectory failed to gain traction, and EUR/USD closed lower at 1.1456.
In the short-term, the Euro may trade between 1.1505-1.1478 as investors scan the geopolitical landscape and endeavor to forecast the risks associated with Italy’s recession and the outcome of Brexit. Hope – but not sturdy confidence – of upward movement is illustrated with the wicks on the candles on January 30 and 31 that reached as high as 1.1514.
Until more is known, and the potential risks are more understood, the Euro may trade cautiously between 1.1505-1.1478. However, fundamental forecasts – and comments from the ECB – indicate that risks in the European economy are mounting on the downside as time progresses.
Stock Market News
Sony’s stock swoons amid worries its portfolio ‘is in trouble’
- Japanese tech giant Sony’s portfolio “is in trouble,” said Ray Wang, principal analyst and founder at Silicon Valley-based Constellation Research
- Wang’s comments came on the back of Sony cutting its revenue outlook for the fiscal year. The company’s stock responded to that news with a significant decline on Monday
- Investors are closely watching the firm’s gaming business. That division is the largest contributor to the company’s operating income at more than 30 percent
Investors are running for cover after Sony delivered its latest results and guidance: Shares in the Japanese tech giant tumbled 8 percent in Monday trade.
Underlying that one-day move is a concern that the company’s portfolio “is in trouble,” according to one analyst.
The company is in “highly competitive areas with declining unit sales and margin,” Ray Wang, principal analyst and founder at Silicon Valley-based Constellation Research, told CNBC over email.
“They have a bad hand and need to change … their portfolio,” Wang said.
Wang’s comments came on the back of Sony cutting its sales and operating revenue forecast for the fiscal year. In particular, investors are closely watching the firm’s gaming business. That division is the largest contributor to the company’s operating income, comprising more than 30 percent in the first three quarters of Sony’s fiscal year.
The company sold 8.1 million units of its flagship PlayStation 4 (PS4) gaming console in the third quarter, according to its earnings release. That was lower than the same quarter of the previous fiscal year, but “in-line with (the company’s) expectations for this sixth year of the platform,” Sony Chief Financial Officer Hiroki Totoki said at a Friday earnings briefing.
Slowing sales of PS4 hardware and a negative impact from foreign exchange rates outweighed an increase in game software sales to drag down the segment’s operating income as compared to the previous year, according to Totoki.
Alphabet, Disney, GM, Twitter and More Major Earnings Coming This Week
Earnings season continues and more major companies are gearing up to report and affect the direction of the broad markets. Last week 12 Dow Jones industrial average components and other major companies reported and markets seemingly took a turn for the better. There are still more big companies reporting this week and after the best January in more than 30 years, it remains to be seen if markets can keep pushing higher.
24/7 Wall St. has reviewed some of the key companies reporting this coming week. We have included the consensus earnings estimates from Thomson Reuters and the stock price and trading history, as well as some additional color on each.
Be advised that the earnings and revenue estimates may change ahead of the formal reports, and some companies change earnings dates as well.
Alphabet Inc. (NASDAQ: GOOGL) is expected to report its most recent quarterly results Monday afternoon. The consensus analyst estimates call for $10.86 in earnings per share (EPS) and revenue of $38.98 billion. Shares of Alphabet traded at $1,118.62 on Friday’s close. The consensus price target is $1,351.27, and the 52-week trading range is $977.66 to $1,291.44.
Gilead Sciences Inc. (NASDAQ: GILD) also is set to report its fourth-quarter results after the closing bell on Monday. The consensus estimates are $1.71 in EPS and $5.49 billion in revenue. Shares closed trading at $70.05 apiece on Friday. The consensus price target is $84.49, and the stock has a 52-week range of $60.32 to $84.58.
Walt Disney Co. (NYSE: DIS) is scheduled to report its fiscal first-quarter results after trading ends on Tuesday. The consensus estimates call for EPS of $1.55 and $15.18 billion in revenue. Shares were changing hands at $111.30 on Friday’s close. The consensus price target is $124.70, and the 52-week trading range is $97.68 to $120.20.
Electronic Arts Inc. (NASDAQ: EA) is expected to report its fiscal third-quarter results late Tuesday. The consensus estimates are $1.94 in EPS on revenue of $1.75 billion. Shares were last seen changing hands at $91.22. The consensus price target is $116.52, and the 52-week trading range is $73.91 to $151.26.
Snap Inc.’s (NYSE: SNAP) fourth-quarter report is scheduled for Tuesday after the closing bell as well. The consensus forecast calls for a net loss of $0.08 per share on $375.82 million in revenue. Shares ended the week trading at $6.91 apiece. The consensus price target is $7.63, and the 52-week trading range is $4.82 to $21.22.
General Motors Co. (NYSE: GM) is scheduled to report its fourth-quarter results first thing Wednesday morning. The consensus estimates call for EPS of $1.22 and $36.48 billion in revenue. Shares closed at $38.78 on Friday. The consensus price target is $45.45, and the 52-week trading range is $30.56 to $45.00.
Eli Lilly and Co.’s (NYSE: LLY) fourth-quarter report is due Wednesday before the opening bell. The consensus forecast calls for $1.34 in EPS on $6.28 billion in revenue. The stock ended the week at $120.89 a share. The consensus price target is $118.69, and the 52-week trading range is $73.69 to $120.91.
Chipotle Mexican Grill Inc. (NYSE: CMG) will report its fourth-quarter results late on Wednesday. Overall, analysts expect to see $1.34 in EPS, as well as $1.19 billion in revenue. Shares were last seen at $527.20. The consensus price target is $489.16. The stock has a 52-week trading range of $247.52 to $543.90.
GoPro Inc. (NASDAQ: GPRO) is expected to share its fourth-quarter results late Wednesday. The consensus estimates are $0.25 in EPS on revenue of $368.87 million. Shares were changing hands at $5.04 on Friday’s close. The consensus price target is $6.67, and the 52-week trading range is $4.00 to $7.60.
Twitter CEO Jack Dorsey Still Believes Bitcoin Will Be Internet’s Currency
Co-founder and CEO of Twitter Jack Dorsey declared again that he believes Bitcoin (BTC) will be the internet’s native currency. Dorsey made his comments during an interview with American comedian and podcast host Joe Rogan published on Feb. 2.
During the interview, Dorsey stated:
“[Bitcoin] was something that was born on the internet, that was developed on the internet, that was tested on the internet…It is of the internet.”
The Twitter CEO had made a similar claim before, noting in mid-May 2018 that he sees Bitcoin as a choice for the internet’s native currency.
Dorsey is also the founder and CEO of mobile payments company Square, which permits its users to trade in Bitcoin. When asked by Rogan if there are any plans to add other cryptos to the app, Dorsey answered that there are not.
As Cointelegraph reported in December last year, Square has been named Yahoo Finance’s company of the year. One month earlier, Square had revealed it generated $43 million in Bitcoin revenue for Q3 2018.
During the interview, Rogan also asked Dorsey if he sees any pushback in regards to Bitcoin, to which he answered by suggesting to “just look at some of the major banks and their considerations on Bitcoin.”
Dorsey noted that “they all love blockchain, because of the efficiencies it can create for their business and potentially new business lines,” but then suggested that this technology is “certainly threatening to certain services behind banks and financial institutions, it’s threatening to some governments as well…”
Dorsey also forecasted that the internet is transitioning to a system in which any data that is created will be online permanently. According to him, “this is what blockchain helps enable, down the line, and we need to make sure that we’re paying attention to that.” He further described how he sees the future of the internet:
“We’re moving to a world in which anything created exists forever, that there’s no centralized control over who sees what, that these models become completely decentralized and all these barriers that we, that exist today, aren’t as important anymore.”
The video of the interview has around 38 thousand dislikes and 5.7 thousand likes. Suggesting that Rogan deleted negative comments from YouTube, multiple users pasted one comment, suggesting that it is a copy of an originally deleted comment:
“Sargon of Akkad 2k upvoted, DELETED comment “If we have a right to use social media, you have no justification for banning people, Jack.” referring to Jack at 51:21 Copy and paste this.”
The comment on Twitter bans could have been a reference to the highly publicized Twitter ban late last year of Alex Jones, the host of far-right website Infowars.
In the fall of 2018, while speaking at a hearing about Twitter transparency at the U.S. House Committee on Energy and Commerce, Dorsey had publicly noted that blockchain could be used to combat misinformation and scams.
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