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Understanding Meta’s 0.4% Yield and Its Growth Potential

By Ino.com | Source: Understanding Meta’s 0.4% Yield and Its Growth Potential

Dividend-loving investors worldwide woke up with exciting news on Friday, as Facebook parent Meta Platforms, Inc. (META) announced its first-ever quarterly dividend and authorized a $50 billion share buyback program.

The company will pay a cash dividend of 50 cents per share on March 26 to shareholders of record as of February 22, joining other peers, including Apple Inc. (AAPL), Microsoft Corporation (MSFT), and Oracle Corporation (ORCL), which have regular payouts. META’s board intends to issue a cash dividend on a quarterly basis.

“Introducing a dividend just gives us a more balanced capital return program and some added flexibility in how we return capital in the future,” Meta’s Chief Financial Officer Susan Li told analysts on its earnings call.

META’s annual dividend of $2 translates to a yield of 0.4% at the prevailing share price. The stock finished nearly 20% higher to $474.99 on Friday after reporting better-than-expected fourth-quarter and full-year 2023 earnings.

The average yield for a dividend-paying stock in the S&P 500 is nearly 2%. Meta’s dividend payout is lower than that rate; however, companies generally start small. Now, investors can look forward to its dividend growth and stock gains.

Looking at Microsoft, the company initiated its cash dividend on January 16, 2003. Its annual dividend was $0.08 per share, which resulted in a yield of about 0.3%. A year following the dividend declaration, MSFT’s stock was up 10%, and the annual dividend for 2024 was raised to $0.16. Currently, the company pays a quarterly dividend of $0.75.

Talking about Apple, it stopped paying cash dividends in 1995 but then declared again in January 2013. Adjusting for all the splits, cash dividends in 2013 translated to an annualized yield of nearly 1.4%. A year after the dividend restart, AAPL’s stock was approximately 24% up as the company continued payouts. Since the restart, Apple has paid a total of around $34 per share.

Dividends are typically welcomed by shareholders and signal management’s confidence about the company’s future growth. Moreover, initial dividend payouts open up to investors who only hold stock in dividend payers.

Further, Meta’s recently released report marked the fourth quarter of the company’s self-described “year of efficiency,” which founder and CEO Mark Zuckerberg announced in February 2023. The company’s turnaround strategy involved layoffs and other cuts to spending, which in turn ended up being a successful effort to reverse the previous year’s revenue declines and share price weakness.

Outstanding Last Reported Financials

For the fourth quarter that ended December 31, 2023, META reported revenue of $39.17 billion, an increase of 24.7% year-over-year. The revenue surpassed analysts’ estimate of $40.11 billion. The company’s revenue from the Advertising segment grew 23.8% year-over-year, and its revenue from the Family of Apps segment rose 24.2%.

Meanwhile, META’s total costs and expenses reduced by 7.9% year-over-year to $23.73 billion. Its operating margin more than doubled to 41%, a clear sign that several cost-cutting measures are boosting profitability.

Facebook parent Meta’s income from operations rose 156% from the prior year’s period to $16.38 billion. Its net income increased 201.3% from the year-ago value to $14.02 billion. The company posted earnings per share attributable to Class A and Class B common stockholders of $5.33, compared to the consensus estimate of $1.76, and up 202.8% year-over-year.

As of December 31, 2023, META’s cash and cash equivalents stood at $41.86 billion, compared to $14.68 billion as of December 31, 2022. The company’s total assets were $229.62 billion versus $185.73 billion as of December 31, 2022.

Family daily active people (DAP) came in at 3.19 billion on average for December 2023, up 8% year-over-year. Family monthly activity people (MAP) was 3.98 billion as of December 31, 2023, an increase of 6% year-over-year.

Also, Facebook daily active users (DAUs) and Facebook monthly active users (MAUs) were 2.11 billion on average and 3.07 billion as of December 31, 2023, up 6% and 3% year-over-year, respectively.

As of December 31, 2023, the tech giant completed the data center initiatives and the employee layoffs, along with the facilities consolidation initiatives. META’s headcount was 67,317 at the end of the year 2023, a decline of 22% year-over-year.

“We had a good quarter as our community and business continue to grow,” said CEO Zuckerberg. “We’ve made a lot of progress on our vision for advancing AI and the metaverse.”

Fiscal 2024 Outlook

For the first quarter of 2024, META expects total revenue to be in the range of $34.50-37 billion. For the full year 2024, the management expects total expenses to be in the range of $94-99 billion, unchanged from the previous outlook.

The company anticipates full-year capital expenditures to be in the range of $30-37 billion, an increase of $2 billion in the high end of its prior range. Meta expects growth to be driven by investments in servers, including AI and non-AI hardware and data centers, and it plans to ramp up construction on sites with its previously announced new data center architecture.

META’s updated outlook reflects its evolving understanding of its AI capacity demands as the company anticipates what will be needed for the next generations of foundational research and product development.

Ramping up Efforts in AI and Metaverse

Meta is making consistent efforts to secure its place in the increasing AI arms race. Last month, CEO Mark Zuckerberg announced that META plans to build its own artificial general intelligence, known as AGI, which is artificial intelligence that meets or exceeds human intelligence in almost every area. He added that the company further plans to open it up to developers.

In a video posted to Meta’s social network Threads, Zuckerberg said building the best AI for chatbots, creators, and businesses requires enhanced advancement in AI across the board. “Our long term vision is to build general intelligence, open source it responsibly, and make it widely available so everyone can benefit,” he said in a post on Threads.

The tech giant announced building out its infrastructure to accommodate this push to get AI into products, and it planned to have about 350,000 H100 GPUs (graphics processing units) from chip designer NVIDIA Corporation (NVDA) by the end of this year. In combination with equivalent chips from other suppliers, Meta will have around 600,000 total GPUs by the end of the year, Zuckerberg said.

He added that the company plans to grow and bring its two major AI research groups – FAIR and GenAI – together to accelerate its work. He further said he believes that Meta’s vision for AI and the AR/VR-driven metaverse are connected.

“By the end of the decade, I think lots of people will talk to AIs frequently throughout the day using smart glasses like what we’re building with Ray Ban Meta.”

Mark Zuckerberg’s recent announcement is one of the company’s biggest pledges to double down on AI. Earlier last year, after the viral success of OpenAI’s ChatGPT, Zuckerberg announced that Meta is creating a new “top-level product group” to “turbocharge” the company’s work on AI tools.

Since then, Meta has introduced tools and information aimed at assisting users understand how AI influences what they see on its apps. The company has launched a commercial version of its Llama large language model (LLM), ad tools that can generate image backgrounds from text prompts, and a “Meta AI” chatbot that can be accessed directly via its Ray-Ban smart glasses.

In his posts last month, Meta CEO said the company is currently training a third version of the Liama model.

Impressive Historical Growth

Over the past three years, META’s revenue and EBITDA grew at CAGRs of 16.2% and 15%, respectively. The company’s net income and EPS rose at respective CAGRs of 10.3% and 13.8% over the same timeframe. Its levered free cash flow improved at 25.6% CAGR over the same period.

Moreover, the social networking company’s total assets increased at a CAGR of 13% over the same timeframe.

Favorable Analyst Estimates

Analysts expect META’s revenue for the first quarter (ending March 2024) to grow 25.3% year-over-year to $35.88 billion. The consensus EPS estimate of $4.25 for the ongoing quarter indicates a 93.3% year-over-year increase. Moreover, Meta has topped consensus revenue and EPS estimates in each of the trailing four quarters, which is remarkable.

Furthermore, Street expects Meta’s revenue and EPS for the fiscal year (ending December 2024) to grow 17.3% and 32.4% year-over-year to $158.20 billion and $19.69, respectively. For the fiscal year 2025, the company’s revenue and EPS are expected to increase 11.2% and 15.3% from the previous year to $175.98 billion and $22.70, respectively.

Solid Profitability

META’s trailing-12-month gross profit margin of 80.72% is 64.5% higher than the 49.07% industry average. Likewise, the stock’s trailing-12-month EBIT margin and net income margin of 36.33% and 28.98% are considerably higher than the industry averages of 8.47% and 3.50%, respectively.

In addition, the stock’s trailing-12-month ROCE, ROTC, and ROTA of 28.04%, 17.84% and 17.03% favorably compared to the respective industry averages of 4.09%, 3.52%, and 1.43%. Also, its trailing-12-month levered FCF margin of 23.52% is 202.7% higher than the industry average of 7.77%.

Bottom Line

Facebook parent META recently reported a big beat on earnings and revenue for the fourth quarter of fiscal 2023. The company, which owns Facebook, Instagram, and WhatsApp, also announced its first-ever dividend of $0.50 per share and authorized a $50 billion share buyback program. Dividends generally signal management’s confidence about the company’s future growth.

Moreover, Meta’s market capitalization last month surpassed $1 trillion. The company last exceeded this mark in the market cap in 2021, when it was still known as Facebook.

Meta’s “year of efficiency” and several cost-cutting measures paid off in a significant way and offered a sweetener for investors, sending its shares higher. The stock is up nearly 38% over the past month and has gained more than 150% over the past year.

2023 was a pivotal year for the social networking giant, where it raised its operating discipline, delivered solid execution across its product priorities, and significantly improved ad performance for the businesses that rely on its services. In 2024, the company further seems well-positioned to build on its progress in each of these areas while advancing its ambitious efforts in AI and Reality Labs.

Given META’s robust financials, accelerating profitability, dividend initiation, and solid growth outlook, primarily as it seeks to strengthen its position in AI, it could be wise to invest in this stock now.

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Opinions Stock Market News

03 Feb

COT Stock Market Charts: Speculator bets led by Nasdaq & DowJones

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 30th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Nasdaq-Mini & DowJones-Mini

The COT stock markets speculator bets were lower this week as just two out of the seven stock markets we cover had higher positioning while the other five markets had lower speculator contracts.

Leading the gains for the stock markets was Nasdaq-Mini (6,209 contracts) with the DowJones-Mini (6,162 contracts) also showing positive weeks.

The markets with the declines in speculator bets this week were the S&P500-Mini (-36,489 contracts), the VIX (-5,347 contracts), the Russell-Mini (-4,315 contracts), the Nikkei 225 (-175 contracts) and the MSCI EAFE-Mini (-596 contracts) also registering lower bets on the week.

Stock Markets Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Nasdaq-Mini & DowJones-Mini

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Nasdaq-Mini (100 percent) and the DowJones-Mini (100 percent) lead the stock markets this week and are at the top of their 3-year ranges. The Russell-Mini (78 percent) comes in as the next highest in the weekly strength scores.

On the downside, the S&P500-Mini (31 percent) comes in at the lowest strength level currently with the next lowest strength score being the MSCI EAFE-Mini (36 percent).

Strength Statistics:
VIX (72.8 percent) vs VIX previous week (76.4 percent)
S&P500-Mini (31.0 percent) vs S&P500-Mini previous week (36.5 percent)
DowJones-Mini (100.0 percent) vs DowJones-Mini previous week (90.0 percent)
Nasdaq-Mini (100.0 percent) vs Nasdaq-Mini previous week (90.4 percent)
Russell2000-Mini (77.6 percent) vs Russell2000-Mini previous week (80.7 percent)
Nikkei USD (39.1 percent) vs Nikkei USD previous week (40.4 percent)
EAFE-Mini (35.8 percent) vs EAFE-Mini previous week (36.4 percent)

DowJones-Mini & Nasdaq-Mini top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the DowJones-Mini (28 percent) leads the past six weeks trends for the stock markets. The Nasdaq-Mini (26 percent), the Russell-Mini (14 percent) and the MSCI EAFE-Mini (9 percent) are the next highest positive movers in the latest trends data.

The VIX (-16 percent) leads the downside trend scores currently with the Nikkei 225 (-11 percent) coming in as the next market with lower trend scores.

Strength Trend Statistics:
VIX (-16.3 percent) vs VIX previous week (-1.9 percent)
S&P500-Mini (-4.6 percent) vs S&P500-Mini previous week (-18.5 percent)
DowJones-Mini (28.1 percent) vs DowJones-Mini previous week (24.1 percent)
Nasdaq-Mini (26.5 percent) vs Nasdaq-Mini previous week (38.7 percent)
Russell2000-Mini (13.9 percent) vs Russell2000-Mini previous week (31.5 percent)
Nikkei USD (-10.8 percent) vs Nikkei USD previous week (-9.7 percent)
EAFE-Mini (8.7 percent) vs EAFE-Mini previous week (26.6 percent)

Individual Stock Market Charts:

VIX Volatility Futures:

The VIX Volatility large speculator standing this week equaled a net position of -54,540 contracts in the data reported through Tuesday. This was a weekly lowering of -5,347 contracts from the previous week which had a total of -49,193 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.8 percent. The commercials are Bearish with a score of 25.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 83.7 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

VIX Volatility Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	20.2	45.9	8.1
– Percent of Open Interest Shorts:	35.9	29.5	8.8
– Net Position:	-54,540	57,042	-2,502
– Gross Longs:	70,187	159,581	28,032
– Gross Shorts:	124,727	102,539	30,534
– Long to Short Ratio:	0.6 to 1	1.6 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	72.8	25.0	83.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-16.3	14.4	11.4

S&P500 Mini Futures:

The S&P500 Mini large speculator standing this week equaled a net position of -225,962 contracts in the data reported through Tuesday. This was a weekly decline of -36,489 contracts from the previous week which had a total of -189,473 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.0 percent. The commercials are Bullish with a score of 59.5 percent and the small traders (not shown in chart) are Bullish with a score of 70.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

S&P500 Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	12.3	74.3	11.5
– Percent of Open Interest Shorts:	22.1	68.1	7.8
– Net Position:	-225,962	142,194	83,768
– Gross Longs:	284,559	1,715,110	264,947
– Gross Shorts:	510,521	1,572,916	181,179
– Long to Short Ratio:	0.6 to 1	1.1 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	31.0	59.5	70.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.6	2.6	4.7

Dow Jones Mini Futures:

The Dow Jones Mini large speculator standing this week equaled a net position of 24,410 contracts in the data reported through Tuesday. This was a weekly boost of 6,162 contracts from the previous week which had a total of 18,248 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bullish with a score of 53.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Dow Jones Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	36.4	48.2	13.8
– Percent of Open Interest Shorts:	13.8	72.7	12.0
– Net Position:	24,410	-26,351	1,941
– Gross Longs:	39,325	52,040	14,936
– Gross Shorts:	14,915	78,391	12,995
– Long to Short Ratio:	2.6 to 1	0.7 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	53.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	28.1	-28.6	11.9

Nasdaq Mini Futures:

The Nasdaq Mini large speculator standing this week equaled a net position of 39,251 contracts in the data reported through Tuesday. This was a weekly gain of 6,209 contracts from the previous week which had a total of 33,042 net contracts.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Nasdaq Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	32.0	53.0	14.2
– Percent of Open Interest Shorts:	18.7	69.3	11.3
– Net Position:	39,251	-47,893	8,642
– Gross Longs:	94,317	156,086	41,844
– Gross Shorts:	55,066	203,979	33,202
– Long to Short Ratio:	1.7 to 1	0.8 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	100.0
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	26.5	-24.3	13.6

Russell 2000 Mini Futures:

The Russell 2000 Mini large speculator standing this week equaled a net position of -10,504 contracts in the data reported through Tuesday. This was a weekly reduction of -4,315 contracts from the previous week which had a total of -6,189 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.6 percent. The commercials are Bearish-Extreme with a score of 19.5 percent and the small traders (not shown in chart) are Bullish with a score of 69.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Russell 2000 Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.4	75.9	6.7
– Percent of Open Interest Shorts:	18.4	76.2	4.3
– Net Position:	-10,504	-1,488	11,992
– Gross Longs:	83,470	387,387	34,014
– Gross Shorts:	93,974	388,875	22,022
– Long to Short Ratio:	0.9 to 1	1.0 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	77.6	19.5	69.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.9	-16.3	19.6

Nikkei Stock Average (USD) Futures:

The Nikkei Stock Average (USD) large speculator standing this week equaled a net position of -3,868 contracts in the data reported through Tuesday. This was a weekly reduction of -175 contracts from the previous week which had a total of -3,693 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.1 percent. The commercials are Bearish with a score of 47.2 percent and the small traders (not shown in chart) are Bullish with a score of 69.8 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Nikkei Stock Average Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.5	63.9	24.6
– Percent of Open Interest Shorts:	34.5	52.9	12.6
– Net Position:	-3,868	1,857	2,011
– Gross Longs:	1,931	10,736	4,133
– Gross Shorts:	5,799	8,879	2,122
– Long to Short Ratio:	0.3 to 1	1.2 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	39.1	47.2	69.8
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-10.8	0.4	23.8

MSCI EAFE Mini Futures:

The MSCI EAFE Mini large speculator standing this week equaled a net position of -29,562 contracts in the data reported through Tuesday. This was a weekly fall of -596 contracts from the previous week which had a total of -28,966 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.8 percent. The commercials are Bullish with a score of 61.8 percent and the small traders (not shown in chart) are Bearish with a score of 43.9 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MSCI EAFE Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.4	89.2	3.2
– Percent of Open Interest Shorts:	14.4	83.5	2.0
– Net Position:	-29,562	24,171	5,391
– Gross Longs:	31,441	376,774	13,648
– Gross Shorts:	61,003	352,603	8,257
– Long to Short Ratio:	0.5 to 1	1.1 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	35.8	61.8	43.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	8.7	-11.2	12.6

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

30 Jan

NAS100 poised for new all-time high?

By ForexTime

NAS100 waits for big tech earnings

Microsoft & Alphabet in focus

Index bullish but RSI overbought

Key levels of interest at 17306.2 & 17650.4

The NAS100 is set to make significant moves over the next few days as 5 of the so-called “Magnificent 7” tech titans report quarterly earnings.

Microsoft and Alphabet kick-off updates after US markets close on Tuesday to an incredibly busy week for US equities.

On Thursday, Apple, Amazon, and Meta are scheduled to publish their latest results.

When factoring the Fed decision mid-week and the US jobs report on Friday, this could be a pivotal week for the index.

With advancement in Artificial Intelligence fueling growth in the Magnificent 7 companies, a bullish earnings guidance could be on the cards.

This may influence NAS100 bulls – those looking to see the index move higher.

NOTE: This new NAS100 index tracks the underlying benchmark Nasdaq 100 index.

Technically speaking, NAS100 is in a sideways range formed over the last 7 trading days.

At the time of writing, it is testing the resistance zone of this range.

The Relative strength index (an indicator that highlights overbought and oversold zones) reveals that NAS100 is overbought.

NAS100 bulls will be looking for a strong close above the channel at 17650.4, with their eyes set no new highs above the all-time high of 17686.8.

Bears (those looking to see the index decline) on the other hand will see a miss in earnings as an opportunity to test the range’s support zone at 17306.2.

A strong close below the range support zone may see the index test the following support levels

· 17105.1: The 21-Exponential Moving Average (EMA)

· 17008.8: The upward-sloping trendline drawn from the October 26th low

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Stock Market News

25 Jan

Target Thursdays: SPX500_m, EURUSD & XAGUSD hit target prices

By ForexTime

Check out these potential profits that you may have missed from our Daily Market Analysis.

SPX500_m bulls deliver

Back on Monday, we covered the SPX500_m in our trade of the week. Prices were firmly bullish, especially after surging to record highs last Friday.

TP hit: YES, the SPX500_m hit the 4900 level

Why: Investor optimism for strong corporate earnings, rising tech stocks

Technicals: Intraday breakout above 4870 fuelled upside

EURUSD hits resistance ahead of ECB

It has been a choppy week for the EURUSD as anticipation mounts ahead of the ECB meeting. Nevertheless, prices have hit some of our targets before this big event.

TP hit: YES, the EURUSD hit 21-Day EMA and 50% Fib level

Why: Mixed Eurozone data dampened ECB cut bets, weak US dollar

Technicals: Prices in a range waiting for significant breakout

XAGUSD eyes 4th target level

Silver bulls have been busy this morning, cutting through the bullish price targets like a hot knife through butter.

TP hit: YES, 3 out of the 4 profit targets have been hit his morning.

Why: A weaker dollar could be offering support to the precious metal

Technicals: Prices are respecting an uptrend on the 15-minute timeframe

The above scenario (XAGUSD) is based on the FXTM Signals that are posted twice a day (before the London and New York sessions) for all FXTM clients to follow. This can found in the MyFXTM profile under Trading Services… FXTM Trading Signals.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Opinions Stock Market News

22 Jan

US stock indices hit all-time highs. PBoC left key lending rates unchanged

By JustMarkets

At Friday’s close, the Dow Jones Index (US30) was up by 1.05% (+0.12% for the week), while the S&P 500 Index (US500) added 1.23% (+1.01% for the week) on Friday. The NASDAQ Technology Index (US100) closed positive by 1.70% on Friday (up +2.07% for the week). At the same time, all three indices updated their all-time highs.

Stocks rose to record highs on Friday on optimism about the US economic outlook. According to the University of Michigan, inflation expectations in the US fell this month, bolstering hopes that the Fed could provide a soft landing for the economy. In addition, Friday’s rally in chip stocks is also boosting tech stocks and the broader market after Taiwan Semiconductor Manufacturing Co gave an upbeat outlook for this year, bolstering hopes for a rebound in chip sales.

Weakening political risks supported stocks after Congress passed a resolution late Thursday night to keep the government running through March and avoid a shutdown on Saturday. The temporary measure would fund some US agencies through March 1 and others through March 8.

Shares of iRobot fell by more than 25% after Bloomberg reported that the European Union’s antitrust authority intends to block the company’s planned acquisition of Amazon.com.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) decreased by 0.07% (-1.01% for the week), France’s CAC 40 (FR 40) fell by 0.40% (-1.29% for the week), Spain’s IBEX 35 (ES35) lost 0.22% (-2.58% for the week), and the UK’s FTSE 100 (UK100) closed positive by 0.04% (2.14% for the week).

Over the past week, expectations of an ECB interest rate cut have weakened. In the swap market, the probability of an ECB rate cut at the March meeting has fallen to 16% from over 50% at the beginning of the month. Swaps currently estimate the odds of a 25 bps ECB rate cut at 3% at the next meeting on January 25 and 16% at the next meeting on March 7. The first-rate cut is now expected in April. Germany’s producer price index for December fell more than expected, which is dovish for ECB policy.

In December, UK retailers suffered their biggest drop in sales in nearly three years, raising the risk that the economy slipped into recession late last year. UK retail sales in December 2023 fell by 2.4% compared to the same month in 2022, driven by a marked decline in sales. This was the largest monthly fall since January 2021.

Crude oil and gasoline prices declined moderately on Friday. Expectations that global oil supplies will remain ample despite geopolitical risks in the Middle East are weighing on crude oil prices. But against the backdrop of OPEC+ production cuts, as well as periodic escalation of the conflict in the Red Sea, traders should not expect a significant decline in prices for black gold in the coming weeks.

Asian markets traded mixed last week. Japanese Nikkei 225 (JP225) jumped by 0.92%, Chinese FTSE China A50 (CHA50) remained unchanged in price for five trading days, Hong Kong Hang Seng (HK50) fell by 0.54% for the week, and Australian ASX 200 (AU200) gained 1.02%.

On Monday, the People’s Bank of China (PBoC) kept key lending rates unchanged amid downward pressure on the yuan, disappointing investors expecting stimulus measures. Last week, the People’s Bank of China surprised markets by leaving the medium-term lending rate unchanged. Chinese markets continued to decline amid lingering concerns about a slowing economic recovery.

S&P 500 (US500) 4,839.81 +58.87 (+1.23%)

Dow Jones (US30) 37,863.80 +395.19 (+1.05%)

DAX (DE40) 16,555.13 −12.22 (−0.07%)

FTSE 100 (UK100) 7,461.93 +2.84 (+0.04%)

USD Index 103.24 −0.30 (−0.29%)

News feed for 2024.01.22:

– China PBoC Loan Prime Rate (m/m) at 03:15 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial News Stock Market News

22 Jan

Trade Of The Week: SPX500_m bulls charge to record highs

By ForexTime

S&P500 hits all-time high

US earnings + key data in focus

Prices bullish for RSI overbought

Key level of interest at 4798

Can bulls maintain hunger for gains?

US equity bulls were back in action last Friday as optimism over expected Fed rate cuts and surging tech stocks pushed the SPX500_m to all-time highs!

Note: The SPX500_m tracks the underlying S&P 500 index

The index has not only topped the previous record set in January 2022 but also confirmed that it has been in a bull market since the October 2022 low. When considering the shaky start to the new year, it looks like SPX500_m bulls have regained their mojo.

Taking a quick look at the technical picture, prices are firmly bullish on the daily charts. However, the Relative Strength Index (RSI) has hit 70, signalling that prices are heavily overbought.

With all the above said, this could be a wild week for the SPX500_m due to technical and fundamental forces. Given how prices are trading at record highs, the key question is whether bulls can maintain their hunger for more gains.

Here are 3 key factors that could influence the index:

US earnings season

US earnings season is in full swing with some of the largest companies in the world publishing their quarterly results.

The likes of Netflix, Tesla, Intel, and Visa among other companies listed in the S&P500 will be under the spotlight over the next few days. Both Netflix and Tesla are expected to report record quarterly revenues which could provide fresh support to the index. Intel is forecast to post its first revenue and profit growth in almost two years while Visa’s revenue could be supported by a better-than-expected holiday season.

The SPX500_m could push higher if overall earnings exceed market expectations.
If earnings disappoint, the SPX500_m could trade lower.

Key US data

The string of incoming key US data may influence expectations around Fed rate cuts – ultimately impacting the SPX500_m which has a handful of tech stocks.

All eyes will be on the Q4 GDP figures, PMIs, and latest PCE report for fresh insight into the health of the largest economy in the world. The US economy is expected to have expanded by 1.9% in Q4 while the Core Personal Consumption Expenditure is forecast to cool 3% in December vs 3.2% in the prior month. Given the market sensitivity to Fed cut expectations, the US data could translate to increased market volatility this week.

Should overall US economic data fuel speculation around Fed rate cuts, this could push the SPX500_m higher.
A set of strong reports and hotter-than-expected inflation figures may dampen hopes on early Fed rate cuts, dragging the SPX500_m lower.

Technical forces

The SPX500_m is firmly bullish on the daily charts as there have been consistently higher highs and higher lows. Prices are trading above the 50, 100, and 200-day SMA while the MACD trades above zero. Although bulls are in a position of power, the RSI signals that prices are heavily overbought – suggesting a potential throwback down the road.

The current upside momentum could take prices towards the next round psychological level at 4900.
Should prices slip back below the 4798 dynamic support, this could open a path back towards 4700.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Stock Market News

20 Jan

COT Stock Market Charts: Speculator Changes led lower by S&P500 & Russell

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 16th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led lower by S&P500-Mini & Russell-Mini

The COT stock markets speculator bets were lower this week as just one out of the seven stock markets we cover had higher positioning while the other six markets had lower speculator contracts.

Leading the gains for the stock markets was the VIX with a small gain of 409 contracts for the week.

The markets with the declines in speculator bets this week were the S&P500-Mini (-52,197 contracts), the Russell-Mini (-6,767 contracts), the DowJones-Mini (-6,692 contracts), the Nikkei 225 (-1,820 contracts), the MSCI EAFE-Mini (-969 contracts) and the Nasdaq-Mini (-205 contracts) also showing lower bets on the week.

Major Stock Markets – Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Nasdaq-Mini & Russell-Mini

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Nasdaq-Mini (95 percent), the Russell-Mini (95 percent), the DowJones-Mini (89 percent) and the VIX (80 percent) lead the stock markets this week.

On the downside, the MSCI EAFE-Mini (35 percent) and the Nikkei 225 (35 percent) come in at the lowest strength level currently.

Strength Statistics:
VIX (80.0 percent) vs VIX previous week (79.8 percent)
S&P500-Mini (39.5 percent) vs S&P500-Mini previous week (47.3 percent)
DowJones-Mini (89.1 percent) vs DowJones-Mini previous week (100.0 percent)
Nasdaq-Mini (95.2 percent) vs Nasdaq-Mini previous week (95.6 percent)
Russell2000-Mini (95.2 percent) vs Russell2000-Mini previous week (100.0 percent)
Nikkei USD (34.8 percent) vs Nikkei USD previous week (47.7 percent)
EAFE-Mini (35.3 percent) vs EAFE-Mini previous week (36.3 percent)

Russell-Mini & Nasdaq-Mini top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Russell-Mini (49 percent) leads the past six weeks trends for the stock markets. The Nasdaq-Mini (43 percent), the DowJones-Mini (28 percent) and the MSCI EAFE-Mini (20 percent) are the next highest positive movers in the latest trends data.

The Nikkei 225 (-20 percent) leads the downside trend scores currently followed by the S&P500-Mini (-18 percent).

Strength Trend Statistics:
VIX (8.7 percent) vs VIX previous week (2.3 percent)
S&P500-Mini (-18.2 percent) vs S&P500-Mini previous week (-7.8 percent)
DowJones-Mini (27.9 percent) vs DowJones-Mini previous week (79.6 percent)
Nasdaq-Mini (43.4 percent) vs Nasdaq-Mini previous week (45.4 percent)
Russell2000-Mini (49.4 percent) vs Russell2000-Mini previous week (54.3 percent)
Nikkei USD (-19.7 percent) vs Nikkei USD previous week (-2.1 percent)
EAFE-Mini (20.5 percent) vs EAFE-Mini previous week (34.1 percent)