Earnings lift equity markets

Earnings season is continuing to lift stock markets this week, giving investors the reason they’ve craved to jump back in push equities back to record highs.

Downside risks to the economy remain but investors are opting to look beyond these as companies continue to give us plenty of reason to be optimistic about what lies ahead. The coming months will be challenging and this enthusiasm may come and go, creating plenty of two-way action in the markets, but right now investors are full of optimism.

Facebook earnings on Monday got the week underway for big tech earnings and, in keeping with the trend in the broader markets, the company managed to impress despite facing numerous challenges. Whether that be changes to Apple’s data rules, advertising headwinds as supply constraints weigh ahead of the holiday season or political pressures following the whistleblower revelations.

Despite all of those challenges, the company continued to report strong user growth, revenues and profit. Their forecasts fell slightly short of analyst expectations for the fourth quarter as a result of the Apple issues and advertising difficulties. Ultimately though, these are short-term problems that the company will adapt to, but it’s the metaverse that investors are really excited about.

Plenty more to come from big tech today, with Microsoft, Alphabet and Twitter all reporting after the close this evening. Twitter’s share price has suffered this past week on the back of Snap and Facebook results and looks a little vulnerable ahead of its own release, with investors seemingly preparing for the worst.

Will Dorsey’s hyperinflation prophecy spur another bitcoin surge?

Bitcoin is relatively flat on Tuesday after bouncing back strongly at the start of the week. Despite a brief dip below USD 60,000, it held onto that psychologically important support level and is now sitting comfortably above there, which begs the question, when will we see another run at record highs. There’s been lots of positive momentum in the market recently and there’s certainly no shortage of crypto headlines right now. And with Jack Dorsey warning of impending hyperinflation, perhaps we’ll soon see just how good an inflation hedge bitcoin truly is. Probably not, though.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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