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Thursday’s US earnings and economic data in focus

By Han Tan Market Analyst, ForexTime

Just to get us up to speed, there were several eye-catching events in the US markets on Wednesday:

Coinbase’s highly-anticipated direct listing on the Nasdaq on Wednesday.

Shares of the US crypto exchange jumped from $381 at the start of trading to as high as $429, pushing the company’s market valuation briefly past $100 billion, which is more than Nasdaq’s own market cap. From that peak, the stock then fell by nearly 17% to close at $328.28.

Coinbase’s price action also whipsawed Bitcoin, which dropped as much as 5.45% from a new record high, although the cryptocurrency is still trading well above the $60,000 psychologically-important mark at the time of writing

Johnson & Johnson’s Covid-19 vaccine faces longer pause.

Advisers to the US Centers for Disease Control and Prevention wrapped up an emergency meeting without further clarity on if or when J&J’s vaccine can resume being disseminated in the US. The decision comes after 6 women developed rare blood clots after receiving the J&J shot.

It remains unknown when the health officials will reconvene to vote on the resumption of J&J’s vaccine use. This open-ended pause could cast doubt over the world’s ability to move into the post-pandemic era. Johnson & Johnson’s shares still climbed 0.28% and remains supported by its 100-day simple moving average for now.

Wall Street Banks such as JPMorgan and Goldman Sachs reported blockbuster earnings.

JPMorgan’s share prices fell 1.87% to mark three straight days of declines, but Goldman Sach’s stocks climbed 2.34% and Wells Fargo’s popped 5.53%.

Although the financial sector climbed 0.66% and was the second biggest gainer on the S&P 500 on Wednesday, it wasn’t enough to prevent the blue-chip index from falling 0.4% from its record high set the day prior.

Investors and traders will still have their hands full with plenty to look forward to on Thursday.

US retail sales, industrial production, weekly jobless claims

Today’s US economic data are likely to be filtered through the US inflation outlook. Better-than-expected print could point to bigger inflationary pressures, which could then lead markets to think that the Fed has to wind down its asset purchases and hike US interest rates much sooner.

Fed Chair Jerome Powell stuck to his script yet again yesterday, when he reiterated the central bank’s pledge to support the US economic recovery. Still, markets are skeptical whether the economic data would eventually force the Fed’s hand to act sooner, or if they’ll stay true to their word and sit on the sidelines.

Today’s data could offer more clues about the Fed’s eventual policy path, and such shifts in market expectations could be manifested in the Dollar index (DXY), which has only managed three days of advances so far this month amid cooling US Treasury yields.

The DXY has now broken below the psychologically-important 92 mark to test its 50-day SMA as a support level. A lower low beyond the 91.29 mark should then disrupt the year-to-date uptrend and give bears a shot in the arm.

Earnings: Citigroup, Bank of America, Delta Air Lines

The earnings gravy train continues with several big names across various industries hoping to add to their year-to-date stock gains:

– Delta Air Lines: 19.80%

– Citigroup: 18.25%

– Bank of America: 31.57%

These 3 stocks are members of the S&P 500, and an earnings beat could push this benchmark index to yet another new record high, although futures are just marginally higher at the time of writing.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

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

14 Apr

Embrace the unexpected: To teach AI how to handle new situations, change the rules of the game

By Mayank Kejriwal, University of Southern California

– My colleagues and I changed a digital version of Monopoly so that instead of getting US$200 each time a player passes Go, the player is charged a wealth tax. We didn’t do this to gain an advantage or trick anyone. The purpose is to throw a curveball at artificial intelligence agents that play the game.

Our aim is to help the agents learn to handle unexpected events, something AIs to date have been decidedly bad at. Giving AIs this kind of adaptability is important for futuristic systems like surgical robots, but also algorithms in the here and now that decide who should get bail, who should get approved for a credit card and whose resume gets through to a hiring manager. Not dealing well with the unexpected in any of those situations can have disastrous consequences.

AI agents need the ability to detect, characterize and adapt to novelty in human-like ways. A situation is novel if it challenges, directly or indirectly, an agent’s model of the external world, which includes other agents, the environment and their interactions.

While most people do not deal with novelty in the most perfect way possible, they are able to to learn from their mistakes and adapt. Faced with a wealth tax in Monopoly, a human player might realize that she should have cash handy for the IRS as she is approaching Go. An AI player, bent on aggressively acquiring properties and monopolies, may fail to realize the appropriate balance between cash and nonliquid assets until it’s too late.

Adapting to novelty in open worlds

Reinforcement learning is the field that is largely responsible for “superhuman” game-playing AI agents and applications like self-driving cars. Reinforcement learning uses rewards and punishment to allow AI agents to learn by trial and error. It is part of the larger AI field of machine learning.

The learning in machine learning implies that such systems are already capable of dealing with limited types of novelty. Machine learning systems tend to do well on input data that are statistically similar, although not identical, to those on which they were originally trained. In practice, it is OK to violate this condition as long as nothing too unexpected is likely to happen.

Such systems can run into trouble in an open world. As the name suggests, open worlds cannot be completely and explicitly defined. The unexpected can, and does, happen. Most importantly, the real world is an open world.

However, the “superhuman” AIs are not designed to handle highly unexpected situations in an open world. One reason may be the use of modern reinforcement learning itself, which eventually leads the AI to be optimized for the specific environment in which it was trained. In real life, there are no such guarantees. An AI that is built for real life must be able to adapt to novelty in an open world.

Novelty as a first-class citizen

Returning to Monopoly, imagine that certain properties are subject to rent protection. A good player, human or AI, would recognize the properties as bad investments compared to properties that can earn higher rents and not purchase them. However, an AI that has never before seen this situation, or anything like it, will likely need to play many games before it can adapt.

Before computer scientists can even start theorizing about how to build such “novelty-adaptive” agents, they need a rigorous method for evaluating them. Traditionally, most AI systems are tested by the same people who build them. Competitions are more impartial, but to date, no competition has evaluated AI systems in situations so unexpected that not even the system designers could have foreseen them. Such an evaluation is the gold standard for testing AI on novelty, similar to randomized controlled trials for evaluating drugs.

In 2019, the U.S. Defense Advanced Research Projects Agency launched a program called Science of Artificial Intelligence and Learning for Open-world Novelty, called SAIL-ON for short. It is currently funding many groups, including my own at the University of Southern California, for researching novelty adaptation in open worlds.

One of the many ways in which the program is innovative is that a team can either develop an AI agent that handles novelty, or design an open-world environment for evaluating such agents, but not both. Teams that build an open-world environment must also theorize about novelty in that environment. They test their theories and evaluate the agents built by another group by developing a novelty generator. These generators can be used to inject unexpected elements into the environment.

Under SAIL-ON, my colleagues and I recently developed a simulator called Generating Novelty in Open-world Multi-agent Environments, or GNOME. GNOME is designed to test AI novelty adaptation in strategic board games that capture elements of the real world.

Diagram of a Monopoly game with symbols indicating players, houses and hotels — The Monopoly version of the author’s AI novelty environment can trip up AI’s that play the game by introducing a wealth tax, rent control and other unexpected factors.
Mayank Kejriwal, CC BY-ND

Our first version of GNOME uses the classic board game Monopoly. We recently demonstrated the Monopoly-based GNOME at a top machine learning conference. We allowed participants to inject novelties and see for themselves how preprogrammed AI agents performed. For example, GNOME can introduce the wealth tax or rent protection “novelties” mentioned earlier, and evaluate the AI following the change.

By comparing how the AI performed before and after the rule change, GNOME can quantify just how far off its game the novelty knocked the AI. If GNOME finds that the AI was winning 80% of the games before the novelty was introduced, and is now winning only 25% of the games, it will flag the AI as one that has lots of room to improve.

The future: A science of novelty?

GNOME has already been used to evaluate novelty-adaptive AI agents built by three independent organizations also funded under this DARPA program. We have also built GNOMEs based on poker, and “war games” that are similar to Battleship. In the next year, we will also be exploring GNOMEs for other strategic board games like Risk and Catan. This research is expected to lead to AI agents that are capable of handling novelty in different settings.

[Deep knowledge, daily. Sign up for The Conversation’s newsletter.]

Making novelty a central focus of modern AI research and evaluation has had the byproduct of producing an initial body of work in support of a science of novelty. Not only are researchers like ourselves exploring definitions and theories of novelty, but we are exploring questions that could have fundamental implications. For example, our team is exploring the question of when a novelty is expected to be impossibly difficult for an AI. In the real world, if such a situation arises, the AI would recognize it and call a human operator.

In seeking answers to these and other questions, computer scientists are now trying to enable AIs that can react properly to the unexpected, including black-swan events like COVID-19. Perhaps the day is not far off when an AI will be able to not only beat humans at their existing games, but adapt quickly to any version of those games that humans can imagine. It may even be capable of adapting to situations that we cannot conceive of today.

About the Author:

Mayank Kejriwal, Research Assistant Professor of Computer Science, University of Southern California

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Opinions Programming

14 Apr

Coinbase IPO: Bitcoin investors must expect more government scrutiny of crypto

By George Prior

Bitcoin investors should be braced for – but not put off by – “much greater government scrutiny,” warns the boss of one of the world’s largest independent financial advisory and fintech organizations.

The warning from Nigel Green, CEO and founder of deVere Group, comes on the day Coinbase, the biggest cryptocurrency platform in the U.S., prepares for its public debut.

It launches its initial public offering (IPO) on the Nasdaq under the symbol COIN starting on Wednesday.

On Tuesday on the deVere Crypto app, Bitcoin, the world’s largest cryptocurrency by market capitalization, hit all-time highs of $64,000.

Mr Green says: “Coinbase’s direct listing is a truly momentous day for the cryptoverse.

“Should it hit its private market valuation of $100 billion, it would immediately become one of the 85 most valuable companies in the U.S.

“Of course, this is driven by the fact the world’s two biggest cryptocurrencies, Bitcoin and Ethereum, to which Coinbase is intrinsically linked, have risen 800% and 1,300% respectively over the last year.”

He continues: “But with these astronomical price jumps, and as they become increasingly embedded in the global financial system, and, critically, as the direct listing on the Nasdaq will reach a wider investment base other than the usual crypto evangelists, investors must expect much greater government scrutiny.

“Governments, central banks and regulators will be keen to protect the currency status quo.

“We should expect considerably higher levels of regulation in the crypto market. Indeed, I believe it is inevitable.”

Mr Green goes on to add: “However, Bitcoin investors shouldn’t be put off by the likelihood of greater government scrutiny.

“Major draconian clampdowns are unlikely as digital currencies are increasingly regarded as the future of money – even by traditionalists. They can’t put the genie back in the bottle.

“Indeed, proportionate regulation should be embraced. It would help protect investors, shore-up the market, tackle criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries which introduce it.”

The deVere CEO concludes: “The Coinbase IPO underscores that cryptocurrencies in some form or another are here to stay – and the market is only set to grow.

“Because of this, investors should know that regulation will become a greater priority.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Cryptocurrencies Opinions

14 Apr

German March CPI: Inflation Picking Up In Europe?

By Orbex

So far this year, inflation from Europe’s largest economy has been above expectations, providing something of a wrinkle in euro forecasts.

The euro area has spent a smaller amount as a percentage of GDP to support the economy through the pandemic. This led many analysts to suspect they were less likely to have higher inflation than their major trading partners such as the US, the UK, and Japan.

Inflation has been muted through most of last year. However, even as lockdowns were tightened during the second wave of the pandemic, German CPI took an excursion higher.

Of course, part of that might be explained by the increased cost of logistics due to the pandemic itself.

The background

The safety measures to slow the spread reduce efficiency. This means that the cost of production has increased.

As consumer confidence remains steady, those increased costs can be easier to pass on to customers. The rise in inflation over the last three months might be explainable by a short-term phenomenon related to the pandemic.

In that vein, producer prices have been on the rise since December. In fact, they are now 3% higher than they were at the end of last autumn.

The increased cost of goods leaving the factory has to be compensated for somehow. With retailer margins already under massive pressure, it is probably inevitable that those costs will simply be passed on.

And with commodities staying high, producer prices could also stay high.

Where are we going?

Tomorrow we get the revised figures for German inflation.

The market is mostly focusing on the Harmonized Consumer Price Index (HCPI). The general expectation is that there will be a confirmation of the preliminary figures. But, if there is a deviation, we could see some reaction in the market. Especially if there is a revision to the upside.

Expectations are for German March HCPI to come in at 2.0% annualized, confirming a substantial acceleration from the 1.6% reported in February.

We should remember that normally the ECB targets annualized harmonized inflation of 2.0%. So, we are close to when the ECB will have to address the issue.

The other data

The rise in HCPI is driven by a monthly jump of 0.5% projected, compared to 0.6% in February.

First-quarter CPI has risen by over 2.4% cumulatively, should the figures be confirmed. Let’s not forget that during that period, Germany re-entered lockdowns and economic activity has fallen into negative territory.

Were it not for the expectation of the “short term” effect of the pandemic, Germany would meet the criteria for “stagflation”. And there would be alarm bells in all the regulatory agencies. However, the ECB is likely to stick to current policy to support the economy, even if at the cost of higher inflation.

The question is how the market will react when ECB members finally have to address the issue. That could lead to some increased strength in the shared currency.

By Orbex

Economics & Fundamentals Financial News

14 Apr

Murrey Math Lines 14.04.2021 (USDJPY, USDCAD)

Article By RoboForex.com

USDJPY, “US Dollar vs. Japanese Yen”

In the H4 chart, USDJPY is consolidating between 3/8 and 5/8. In this case, the price is expected to test 3/8, rebound from it, and then resume growing to reach the resistance at 4/8. However, this scenario may no longer be valid if the price breaks 3/8 to the downside. After that, the instrument may continue falling towards the next support at 2/8.

As we can see in the M15 chart, the upside line of the VoltyChannel indicator is pretty far away from the price, that’s why the pair may resume the ascending tendency only after rebounding from 3/8 from the H4 chart.

USDCAD, “US Dollar vs Canadian Dollar”

In the H4 chart, after rebounding from the 200-day Moving Average, USDCAD is trading below it, thus indicating a descending tendency. In this case, the price is expected to break 5/8 and continue the descending tendency to reach the support at 4/8. Still, this scenario may no longer be valid if the price breaks 6/8 to the upside. After that, the instrument may reverse and resume growing towards the resistance at 8/8.

As we can see in the M15 chart, the pair has broken the downside line of the VoltyChannel indicator and, as a result, may continue trading downwards.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News

14 Apr

Intraday Market Analysis – Extended Rally

By Orbex

EURUSD tests major resistance

A 2.6% yoy rise in US CPI has so far failed to impress traders as the Fed may remain patient longer than the market.

After a short consolidation around 1.1900, the RSI has receded from the overbought area, laying the groundwork for a new round of rallies. The next target would be the key resistance level of 1.1990 from the daily chart.

A bullish breakout may signal that the euro could resume its year-long rally.

In case of a pullback, 1.1870 is a critical support to keep the optimism intact.

EURGBP builds bullish momentum

The pound struggles across the board after Britain’s economy showed a slower than expected growth in February.

The euro has previously come under selling pressure near the daily supply area (0.8730). The RSI has since retreated into the neutrality zone.

Despite profit-taking, the pair has stayed afloat above 0.8620 which would suggest that buyers are still in control of the price action.

A surge above the said resistance could trigger a runaway rally as a combination of short-covering and fresh buying.

UKOIL trades in narrowing range

Brent crude ticked up after data showed oil imports into China surged 21% in March. The price action remains range-bound however for lack of a major catalyst.

The narrowing consolidation is a sign of the market’s indecision and a breakout is bound to happen soon.

A bearish MA cross on the daily chart may weigh on the sentiment but as long as 61.20 holds firm as support, there is a chance of a rebound.

On the upside, a rise above 65.15 could extend the rally towards 68.

By Orbex

Financial News Forex and Currency News

14 Apr

Forex Technical Analysis & Forecast 14.04.2021

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

After rebounding from 1.1877, EURUSD has broken 1.1920 to the upside. Possibly, today the pair may grow to reach 1.1967 and then start a new correction to test 1.1920 from above. Later, the market may resume trading upwards to reach 1.1980 and then form a new descending structure with the first target at 1.1860.

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD continues the correction towards 1.3792. After that, the instrument may resume falling to break 1.3680 and then continue trading downwards with the short-term target at 1.3590.

USDRUB, “US Dollar vs Russian Ruble”

After finishing the descending structure at 76.60, USDRUB is expected to consolidate around this level. If the price breaks this range to the downside, the market may fall with the short-term target at 75.57 and then start a new growth to return to 76.60.

USDJPY, “US Dollar vs Japanese Yen”

After completing the descending structure at 109.16 along with the correction towards 109.54, USDJPY is still falling to reach 108.60. After that, the instrument may form one more ascending structure with the target at 109.75.

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is still falling with the predicted target at 0.9191. Later, the market may form one more ascending structure towards 0.9313.

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is still consolidating around 0.7655. Possibly, the pair may expand the range up to 0.7727 and then start a new decline to reach 0.7454.

BRENT

Brent is still consolidating around 63.00 without any particular direction; right now, it is trading towards the upside border at 64.05. If the price breaks this range to the upside, the market may grow towards 65.50; if to the downside – resume trading downwards to complete this wave at 60.00 and then form one more ascending structure with the target at 66.00.

XAUUSD, “Gold vs US Dollar”

After finishing the correction at 1725.55, Gold has returned to 1749.25. Today, the metal may grow to break 1756.00 and then continue growing with the target at 1795.49.

S&P 500

The S&P index is still growing towards 4160.3. Later, the market may form a new descending structure with the first target at 4006.0.

Article By RoboForex.com

Financial News Forex and Currency News

14 Apr

The Analytical Overview of the Main Currency Pairs on 2021.04.14

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1909
Prev Close: 1.1947
% chg. over the last day: +0.32%

The euro continued to rise against the US dollar on the back of strong ZEW performance and higher yields on German Bonds. Also, the previous comments of Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen provide support for the bulls in the euro.

Trading recommendations

Support levels: 1.1836, 1.1704
Resistance levels: 1.1990, 1.2113

The main scenario for EUR/USD is buying. The technical picture looks bullish. The MACD is above zero, while convergence has formed, indicating a greater likelihood of growth. The ADX is reacting strongly to the northern impulse, showing a rise in bullish pressure.

Alternative scenario: if the price consolidates below the level of 1.1905, the pair may return to the decline to 1.1836.

There is no news feed for today.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3738
Prev Close: 1.3748
% chg. over the last day: +0.07%

The sterling rose on Tuesday amid continuing correction in the US dollar and strong manufacturing output. The Office for National Statistics reported industrial growth in February by 1.3%, while economists’ forecast was 0.5%.

Trading recommendations

Support levels: 1.3705, 1.3680
Resistance levels: 1.3848, 1.3929

The main scenario in GBP/USD is buying. The pair came close to the first support level and rebounded. The ADX reacted strongly to Tuesday’s northern impulse, indicating an increase in bullish pressure.

Alternative scenario: if the pair consolidates below 1.3735, the pound may move to decline to 1.3680.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 109.38
Prev Close: 109.05
% chg. over the last day: -0.31%

On Tuesday, the dollar-yen pair continued to decline amid a correction in the dollar index and US Treasuries, the yield of which fell to 1.63%. The market experiences an increased demand for defensive assets, including gold, Swiss franc, and yen.

Trading recommendations

Support levels: 108.35, 107.08
Resistance levels: 110.32, 110.98

The main scenario is selling. The price is still fixed below the moving averages. The MACD fell below zero, and convergence formed on the chart, indicating a continuation of the decline. The ADX shows the growth of the bearish trend potential. By a combination of factors, there is a signal for a further fall in the pair.

An alternative scenario implies the price fixing above 109.40. In this case, the pair may resume growth to 110.32.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2559
Prev Close: 1.2531
% chg. over the last day: -0.22%

Continuing to trade in a narrow sideways range, the pair came under pressure, as oil prices for WTI rose to $60.80 per barrel. The decline in the dollar index puts additional pressure on the pair.

Trading recommendations

Support levels: 1.2522, 1.2501
Resistance levels: 1.2629, 1.2646

The main scenario is trading in a sideways range between 1.2522 and 1.2629. Specifications are mixed. The price is below the moving averages, although the ADX has reacted to the northern impulse. The MACD is below zero. By a combination of factors, the signal is neutral.

Alternative scenario: if the price consolidates below 1.2522, the pair may resume its decline to 1.2501. A breakout of 1.2563 will indicate a further growth to 1.2626.

News feed for 2021.04.14:

– US Crude Oil Reserves at 17:30 (GMT+3).

by JustForex

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 Forex and Currency News

14 Apr

The MSCI continues to rise amid investor optimism about the global economic recovery while the dollar declines

by JustForex

The majority of Asian stocks rose on Wednesday, following the US stocks and bonds. Investors ignored higher-than-forecasted inflation in the US and focused on the global economic recovery.

Japanese stocks were the exception, falling in light of a slow rollout of the vaccination program. However, the MSCI Global Index climbed to a record high.

European contracts rallied, and US stock futures held steady near highs. The White House said the US vaccination campaign would continue despite the suspension of vaccines from Johnson & Johnson due to emerging health concerns.

Treasury bonds have stabilized. Treasuries yield is around 1.63%. German Bonds are around -0.30%. The US dollar continues to decline, while the New Zealand dollar’s growth is in the lead among the G10 currencies. Oil rose above $60 a barrel.

The latest data showing that US consumer prices rose more than expected last month did not make much of an impact, given the distortion associated with the price collapse a year earlier. Investors remain confident that the recovery continues, supported by central banks and government spending.

“A lot of growth and inflation have already been priced into the market,” said Emily Roland, investment strategist at John Hancock Investment Management. In her opinion, any surge in inflation in the next two quarters will not have a significant impact on the market.

Main market quotes:

S&P 500 (F) 4,134.88 +2.13 (+0.05%)

Dow Jones 33,677.27 -68.13 (-0.20%)

DAX 15,234.36 +19.36 (+0.13%)

FTSE 100 6,890.49 +1.37 (+0.02%)

USD Index 91.748 -0.096 (-0.10%)

Important events:

– US Crude Oil Reserves at 17:30 (GMT+3).

by JustForex

Financial News Forex and Currency News

14 Apr

Earnings Preview: JPMorgan In Focus

By Lukman Otunuga Research Analyst, ForexTime

It’s that time again.

Earnings season is finally here with JPMorgan Chase one of the first big banks to report first-quarter results before US markets open on Wednesday.

Shares of the American investment bank have appreciated over 21% year-to-date, outperforming the S&P 500 which is up roughly 10%. Banks stocks in general have been supported by the increasingly optimistic outlook for the US economy, vaccine rollouts and prospects of more fiscal stimulus fuelling economic growth. Even Jamie Dimon, chief executive officer (CEO) of the investment bank is optimistic that the pandemic will end with a US economic rebound that could last at least two years.

Market expectations: EPS & Earnings

Investor sentiment towards JPMorgan chase will certainly be impacted by the pending earnings report later today. According to Bloomberg, the adjusted earnings per share (EPS) estimates stand around $3.01 per share on $30.42 billion in revenues for Q1 2021. For a full year, EPS are projected at $11.25 while full-year revenues are seen hitting roughly $118.02 billion – the first decline in five years.

What to look out for…

There seems to be a lot of optimism around the investment bank’s first-quarter results. With adjusted EPS in Q1 forecast to grow a whopping 286.38%, this will be the strongest earnings growth since 2010. Although the massive increase may be partly due to earnings recovering from their painful levels last year, such a figure is still likely to boost confidence over JPMorgan’s outlook.

Digging deeper, investors may turn their attention towards the loan loss reserves.

Higher loan reserves in 2020 highlighted serious concerns about a global economic recession. In a single sentence, the loan loss reserve is the amount banks set aside to cover estimated losses on loans due to defaults. These measures hit earnings as banks set aside money to cover expected loan losses. During the final quarter of 2020, JPMorgan released credit reserves of $2.9 billion which helped boost profits. Much attention will be directed to how much it removed during the first quarter of 2021, as this will not only have an impact on its earnings number but may provide insight into how confident the investment bank is on the economic outlook.

How about the technicals?

As highlighted earlier, shares of JPMorgan are up over 21% since the start of 2021. Since the start of February, there have been consistently higher highs and higher lows on the daily charts while the MACD trades above 0. However, it seems prices have been trapped within an $8 range over the past few weeks with support at $149.00 and resistance at $157.00.

If the first-quarter earnings meet or exceed the market expectations, this may push the shares of the investment bank towards the $157.00 resistance level. A solid breakout above this point could open doors back towards the all-time high of $161.58 as seen on the FXTM MT4 terminal. Should $157.00 prove to be reliable resistance, a descent towards $149.00 and possibly lower could be on the cards.

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

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