Market Review 04-10

Market Review 04-10

Facebook has been underperforming the market for a year and a half — here’s the next move

By Rebecca Ungarino

The stock has been badly underperforming the broader market for quite some time, and the bottom isn’t in yet, according to Craig Johnson, chief market technician at Piper Jaffray.
“We’ve broken the up-trend support line that’s been intact since 2013, and from my perspective, it looks like the shares are destined to come back and test that $150 level. From my perspective, this is a stock that’s got more downside to it, and $150 would be your first are of support,” Johnson said Monday on CNBC’s “Trading Nation.”

Johnson said he would not step in to buy Facebook shares because the stock’s performance relative to the S&P 500 reached a fresh “lower low” on the chart, a signal that concerns him.

From a fundamental viewpoint, the stock may suffer in the short term given its various problems about privacy, but the future of Instagram is one bright spot for the company, said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management.

“At this point, I think Facebook is probably a cautious buy. I would be a seller of the $150 puts to see if I can get in at that level,” Schlossberg said, suggesting a bearish options trade on the stock.

https://www.cnbc.com/2018/10/02/facebook-has-been-underperforming-the-market-for-a-year-and-a-half.html

 

Goldman Sachs: Wall Street keeps underestimating just how fast Netflix is growing

By Thomas Franck

  • Goldman Sachs believes Netflix’s subscriber growth will continue to soar, forecasting 30 million net adds in 2019 versus consensus estimates of 25 million.
  • Analyst Heath Terry reiterates his buy rating on shares as well as a 12-month price target of $470, implying 23 percent upside.
  • “Analyst forecasts continue to understate the company’s future growth, both near and long term, in our view,” the Goldman analyst says.

https://www.cnbc.com/2018/10/02/goldman-sachs-sees-netflix-rallying-20-percent-from-here.html

 

S&P 500 and DJIA Maintains Bullish Trajectory, However, Italian Risk’s Loom

By Justin McQueen

S&P 500
Improved risk sentiment has stemmed from reports that the Italian government may reduce its budget deficit target for 2020 and 2021. As such, the S&P 500 is called to open modestly higher. The rising channel keeps the S&P 500 on a bullish path. However, Italian risks may be back on the rise depending on the EU’s response to the budget.

Dow Jones Industrial Average
After another record high reached in the DJIA, the bias remains to the upside, which has been further supported by the break above the trendline. Prices would need to hold above the trendline to keep the index firm. Alongside this, RSI indicators show that there is a bullish divergence and thus supporting the case for higher prices. However, failure to consolidate above may leave the index vulnerable to the downside with the bottom of the channel coinciding with the support volume zone at 26048.

https://www.dailyfx.com/forex/market_alert/2018/10/03/SP-500-and-DJIA-Maintains-Bullish-Trajectory-However-Italian-Risks-Loom.html

 

EUR/GBP turns lower, weakens back below 0.8900 handle

By Haresh Menghani

The EUR/GBP cross surrendered early gains to near one-week tops and has now dropped to fresh session lows, farther below the 0.8900 handle.

The shared currency started losing positive momentum after Italy’s deputy Prime Minister Luigi Di Maio confirmed 2019 budget deficit target of 2.4% and said that the government is still mulling over cutting deficit after that.

Meanwhile, the British Pound seemed rather unaffected by today’s slightly weaker than expected UK services PMI and held on to its positive bias, which was seen exerting some additional downward pressure on the cross.

https://www.fxstreet.com/news/eur-gbp-turns-lower-weakens-back-below-08900-handle-201810030925

 

EUR/USD remains under pressure on Italy – Danske Bank

By Pablo Piovano

Senior Analyst at Danske Bank Piet Christiansen gives his views on the recent developments around the EUR and Italy.

“EUR/USD remains under pressure after Italy’s budget committee head Borghi on Thusday, reminded markets that some Italian politicians continue to flirt with the easy way out of debt problems: an Italian exit from the euro”.

“While this was later decisively dismissed as current government policy, it was certainly a reminder of the ultimate risk to Italy’s fiscal experiment. We expect a further widening of the political risk premium on EUR near term”.

https://www.fxstreet.com/news/eur-usd-remains-under-pressure-on-italy-danske-bank-201810031034

 

Gold Prices May Fall as Cooling Italy Fears Boost Yields, US Dollar

By Ilya Spivak

Looking ahead, an upturn in risk appetite may send gold lower anew. Prices held up in Asia Pacific trade as Italy stepped back from the brink, triggering a surge in EUR/USD that echoed as broader US Dollar weakness. That helped underpin anti-fiat alternatives but support may evaporate as ebbing Eurozone instability worries boost yields and reinforce Fed rate hike prospects. Indeed, S&P 500 futures are pointing upward.

https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2018/10/03/Gold-Prices-May-Fall-as-Cooling-Italy-Fears-Boost-Yields-US-Dollar.html

 

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