Summary:
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US indices trading higher ahead of the Fed
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Apple called to open up 5%+
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Boeing surges 6% after earnings beat
There’s been further gains seen in the US indices ahead of today’s cash session with all the benchmarks trading in the green. The Dow (US30 on xstation) in particular is performing well and probing a potentially key resistance level ahead of what could be a big session with the Fed set to announce their latest monetary policy mix at 7PM before a press conference with chair Powell at 7:30PM - the Fed will now conduct a press conference after every single decision rather than alternate ones, which means more chances for them to communicate their views and probably heightened volatility which could provide more trading opportunities.
Today’s gains have seen the US30 move back up near its highest level in 7 weeks. The market is testing potentially key resistance around the 61.8% fib at 24850 with the confluence of the 200 SMA nearby possibly heightening its importance. Reversal signals here could prove attractive for short entries, whereas a clean break up through 24850 would pave the way for longs to look to extend the latest rally higher. Source: xStation
The main reason for the latest gains seen in the Dow, are a couple of earnings releases that have seen shares in Apple and Boeing both called to open sharply higher. There’s been a strong positive reaction in shares of Apple during after-hours trade following the latest earnings update from the tech giant. The figures were released after Tuesday’s closing bell on Wall Street, and the fact that the stock is called to open higher by as much as 5% is more a reflection of low expectations going into the event rather than a stellar report. Apple actually posted their first holiday-quarter decline in sales since 2001 but investors have seemingly looked through this to focus on slight beats on the expected earnings and revenues numbers and jumped in.
Fears surrounding peak iPhone remain, with revenue from the handset tumbling by 15%, but CEO Tim Cook focused on a growing services business and rising sales of other devices to paint a more rosy picture. Mac revenue grew by 9%, while iPad sales climbed 17% while the smaller Wearables business, which includes the Apple Watch and AirPods jumped by 50%.
Shares in Apple are expected to open around the 163 mark which is the 23.6% fib retracement of the larger decline from it’s all-time peak last October at 233. Source: xStation
Due to the Dow being a price-weighted index, Boeing is actually a far bigger determinant of the benchmark’s price than Apple, with the aircraft manufacturing company accounting for a little over 10% of the index at the last rebalance. This is compared to approximately 4% for Apple. Boeing’s annual sales topped $100 billion for the first time in its 102-year history also delivering an upbeat assessment of future business. Revenue rose to $28.34b, compared to an expected $26.93b in Q4. Core EPS for the 4th quarter came in at $5.48, smashing the median forecast of $4.59 and well above the upper end of the range ($4.36-$4.87). More importantly, looking ahead the company said that adjusted earnings will be $19.90 to $20.10/share this year as sales climbed across all businesses, far above the analyst consensus of $18.44. Operating cash flow will be as much as $17.5 billion. Shares in Boeing are called to open around 20 points, or 6% higher, and near the 387 mark.
The stock has now recouped the vast majority of the losses seen last quarter and moved firmly back above the 78.6% fib at 373. Record highs around 394 could now be set for a retest with the market firmly back above the 200 day SMA. Source: xStation
