US stocks remain near recent highs ahead of Google earnings

Summary:

• US indices remain near recent highs in fairly quiet trade

• Closer look at the FANG+ index

• DE30: Leaders of Japan and Germany to meet today

• Construction data further points to UK slowdown

• Largest Canadian crypto exchange lost $145 million

The last week was another good one for US stock markets with all major indices posting steady gains after receiving a further boost from a dovish shift from the Fed. Friday saw a second consecutive stellar NFP report, with over 300k jobs added in January and while the markets briefly popped to their highest level in 7 weeks, the gains were pared back a little with the US500 actually ending a little lower on the day. The returns seen last month meant that it was the best start to the year for US stocks on the whole in over 30 years as you have to go back to 1987 to find a better performance for the month of January. Today’s trade is shaping up to be an inside day at present, with the market still near recent highs ahead of the release of Google earnings after the closing bell.

The FANG+ (USFANG on xStation) CFD made its debut today, and contain 10 large technology stocks.  The index consists of highly-liquid growth stocks that trade on the New York Stock Exchange or Nasdaq market. One of the stocks is Google, with the search engine giant set to report its latest earnings update this evening after the closing bell. More about USFANG can be found here.

As a number of risk factors is threatening global growth leaders of some major countries look for ways to bolster cooperation and tackle problems. The German Chancellor, Angela Merkel, will arrive in Japan today and meet with the Japanese Prime Minister, Shinzo Abe. Both politicians are known critics of Brexit and both called for preservation of the international trade order amid US-China trade conflict. It is expected that an agreement on information security will be announced at the end of the visit. Apart from that, it should be noted that trade agreement between Japan and the European Union came into effect a few days ago and virtually removed most of trade tariffs between those two economies. Apart from the political “team”, Merkel and Abe will be accompanied by executives from German and Japanese biggest companies raising hopes that foundation for even deeper cooperation can be made.

A far larger drop than expected in the most recent data from the construction sector has served to reaffirm the feeling that the UK economy is slowing down, coming on the back of last week’s soft manufacturing print. A PMI reading of 50.6 is still above the 50 mark that a move below would signal a contraction, but compared to a median forecast of 52.5 and a prior reading of 52.8 it is clearly on the soft side. This metric has been pretty strong of late, with only 2 of the past 9 coming in below the expected level before today’s drop.

The new week on the cryptocurrency market has begun quite flat as major digital coins has continued moving sideways. According to CoinMarketCap, the capitalization of the whole crypto market stands a notch above the $114 billion handle while the capitalization of altcoins sits around the $53.5 billion mark. QuadrigaCX, the largest Canadian crypto exchange, lost 190 million of Canadian dollars (it’s around 145 million of US dollars). The death of Gerald Cotten on December 9 in India, who was CEO of QuadrigaCX, has caused the crypto exchange losing control over cold wallets containing virtual currencies worth over 150 million of Canadian dollars, and over 40 million CAD in fiat money stored with a third party. “An application for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was filed today in the Nova Scotia Supreme Court to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers”, the company wrote on its website on January 31.