Welcome to the Weekly Market Update!
In this edition, we bring you the latest highlights and insights from the world of finance. We will cover the week’s top stories, provide market analysis, highlight economic developments, discuss upcoming events to watch, and present technical analysis. Let’s delve into the key information you need to stay informed and make informed financial decisions.
Top Stories of the Week
- Nvidia Exceeds Predictions with Impressive Performance: Nvidia, a prominent player in AI chips, surpasses expectations by outperforming earnings and revenue projections. The company also anticipates a remarkable 170% growth in Q33. Alongside this success, Nvidia plans a significant $25 billion share buyback.
- S&P Takes Action on US Banks’ Ratings: Five US banks experience a downgrade from S&P, following a similar move by Moody’s. Regional banks witness a one-notch downgrade, and an unfavorable outlook is signaled for several others.
- BRICS Enlarges with Six New Additions: The BRICS group, consisting of Brazil, Russia, India, China, and South Africa, expands its membership. Saudi Arabia, UAE, Egypt, Argentina, Iran, and Ethiopia receive invitations. This development raises questions about potential shifts in global dynamics.
- GBPUSD Responds to Recession Concerns: Weak PMI data triggers concerns about a potential recession, leading to a market adjustment of expectations for a BoE rate hike. Forecasts now indicate a peak rate of 5.5%.
- Arm Reveals Plans for IPO: UK-based chip manufacturer Arm announces its intentions to go public on the Nasdaq exchange next month. The company aims for a valuation between $60 billion and $70 billion.
Market Analysis
- Nvidia’s Blockbuster Performance: Nvidia has astounded Wall Street by surpassing expectations with record-breaking Q2 results. The company’s revenue more than doubled, reaching $13.5 billion, and EPS rose five-fold to $2.70, fueled by soaring demand for AI chips. With a projected 170% YoY revenue increase for the current quarter, Nvidia’s ability to tackle supply constraints swiftly has boosted investor confidence. This remarkable success is driven by escalating demand for chips for AI and machine learning applications, propelling Nvidia’s shares over 8% higher pre-market and marking a year-to-date increase of over 230%.
Economic Highlights
- Eurozone Growth Concerns Emerge: The Eurozone’s economic landscape faces concerns as Services PMI experiences its first-year decline and Germany’s Composite PMI witnesses the sharpest dip in three years. These declines spark discussions about the region’s growth prospects, with analysts examining potential impacts on trade, employment, and monetary policy decisions. The PMI data provides valuable insights into the overall health of the Eurozone economy, guiding expectations for recovery and prompting discussions about potential policy responses.
Upcoming Events to Watch
- US Non-Farm Payroll (Sep 1): Insights into US labor market resilience as job growth lags. Fed rate hike impact scrutinized.
- Eurozone Inflation (Aug 31): Cooling inflation, contracting PMI signal doubts on September ECB rate hike feasibility.
- China Manufacturing PMI (Aug 31 – Sep 1): Key amidst China’s economic worries. Will contraction persist?
- US Core PCE (Aug 31): Core PCE’s USD impact after subdued core CPI. Influencing Gold and market sentiment.
- Broadcom Earnings (Aug 31): Q3 results reveal post-deal impact. EPS $10.43, revenue $8.86B. Tech sector focus due to YTD stock performance.
Technical Analysis
We have analyzed the most popular trading pairs and assets, including EUR/USD, GBP/USD, Gold, and US500. Our aim is to provide you with an insightful analysis of their trends and support/resistance levels, which will help you make informed decisions.
EUR/USD
EUR/USD remains in a downtrend, marked by lower highs and lows below the 50 SMA. It has continued its descent under the 50 SMA and is currently challenging the 1.083 support level. A breakdown might lead to additional support around 1.07 and the May low around 1.0650. The overall perspective suggests a market within a range, with 1.095 acting as a central point.
GBP/USD
GBP/USD remains in a downtrend, forming lower lows and highs under the 50 SMA. After around 3 weeks of uncertain price action near 1.27 and under the 50 SMA, the price is now testing support at 126.1. A drop to about 1.24 is the next target. An oversold RSI could signal a rebound in line with the uptrend.
XAU/USD
XAU/USD downtrend continues, forming lower lows and highs below the 50 SMA. With RSI exiting oversold levels, a price rebound followed from the lows. It could prompt tests of the 50 SMA and the 1950 psychological level. The ongoing downtrend hints at an extended rebound, potentially driving RSI into overbought territory.
XUS500
XUS500 experiences a downtrend, marked by lower lows and highs beneath the 50 SMA.
Following last week’s breach beneath the 50 SMA, the price retested the moving average before descending again. This sequence potentially confirms a bearish breakdown. A shift to bullish sentiment requires a move above the 50 SMA.
Thank you for reading! Wishing you successful trades ahead!
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