Daily summary - Shaky start of US earnings season

• During today's session on Wall Street traders focused on financial reports from major US banks, which officially kicked off the earnings season

• Today five banks published their results and majority topped market estimates, however it is worth remembering that expectations were relatively low. Banks that focus on retail banking performed the worst

• Despite upbeat quarterly results shares of most banks fell at the beginning of US trade, as JPMorgan Chase  warned it was setting aside more money to cover credit losses because a “mild recession” is its “central case”.

• Nevertheless the banking sector erased losses later in the session. Currently all three major Wall Street indices oscillate around the flatline. 

• Contrary to the weak session on Wall Street, European finished today's session mostly higher, with Germany's DAX 40 rising close to 15,100 points, the highest level since mid-February. 

• UK economy unexpectedly grew in November, reducing the chance it slipped into a technical recession at the end of 2022; 

• Deutsche Bank revised German 2023 GDP forecast to 0% from -1.0%

• Fed's Harker said that even if the landing is bumpy, a soft landing is still possible. However he still favors getting rates slightly above 5%.

• Tesla lost up to 6% today after the  EV maker lowered car prices in Europe and the US. The price cut is further evidence of poor sales prospects. Earlier, the company made a similar operation on the Asian market

• The dollar strengthened against the majority of G10 currencies. The exception was the yen, which gained over 1% against the dollar. BoJ will meet on Wednesday and markets speculate that policymakers could further expand the yield cap and revise upward inflation forecasts

• Despite the strong dollar, gold is performing quite well today as the price returned above $1,900 an ounce. Oil gained over 1% and WTI is trading slightly below $80 a barrel

• Flash UoM consumer sentiment rose sharply to 64.6 pts in January from 59.7 in previous month, which was most likely linked to an inflation drop. Reading also showed  that 1-year inflation expectations fell to 4% from 4.4%.

• According to Yellen, the debt limit in the US will be reached on January 19. The Treasury is going to use extraordinary measures on the debt limit.

Bitcoin extends recent upward move, even despite the poor performance of the US tech sector with which it is strongly correlated. Price broke above resistance at $19100 during today's session and is approaching 200 SMA (red line). Should break higher occur, upward move may accelerate towards psychological resistance at $20000, which coincides with 78.6% Fibonacci retracement of the last downward wave. Breaking above this zone could see sentiment change to bullish. Source: xStation5