Investors turn their attention to the “magnificent seven” and earnings reports as the countdown begins.
The NASDAQ and most global indices trade higher on Monday with the NASDAQ leading gains. Investors concentrating on earnings from Meta, Microsoft, Alphabet and Tesla.
Tesla announces it will slash its prices once again as sales decline. The stock trades almost 41% lower in 2024.
The Euro gains momentum as the European Cash Open nears and is the best performing G7 currency of the day so far.
USA100 – Earnings Season Gains Momentum, More Bad News for Tesla
Last week the NASDAQ’s decline marked the worst week since November 2022, but the price trades higher on Monday. Currently the NASDAQ is the best performing global index, but its performance will largely be dependent on earnings.
So far, technical analysis is still indicating a downward trend and continues to form higher lows as well as highs. The asset also continues to trade lower than the main trend lines, Moving Averages and in the “sell” zone of the RSI. Based on the past 3 retracements, the average retracement size is 1.41%, which means similar retracements could see the price rise a further 0.42%. If the price rises above this level or above $17,234 (Fibonacci retracement 60.0 level), the possibility of a correction or new trend rises.
The question for investors is if the market will take advantage of the lower price to better their entry. This will depend on the upcoming earnings data. This week’s most influential reports for the NASDAQ are:
Tesla – Tuesday After Market Close
Meta – Wednesday After Market Close
Microsoft – Thursday After Market Close
Alphabet – Thursday After Market Close
The most influential reports will be Microsoft and Alphabet which have the highest “weights” within the index. Tesla on the other hand continues to worry shareholders and CEO Musk cancelled a trip to India over the weekend due to an urgent meeting at Tesla. The company advised they would reduce their workforce by 10% and cut the prices of certain products. Tesla is the NASDAQ’s ninth most influential stock. If earnings and revenue fall short of already subdued expectations, there is a strong chance for the stock price to potentially further decline.
For this reason, the performance of the price movement is likely to depend more on the above upcoming earnings data. If earnings are better than expectations, the index may attempt a correction. Otherwise, investors may see little reason to further expose to that market. If the price drops below $17,102.03, the price action would continue to follow the bearish trend pattern.
EURUSD – Reverting Price Conditions
The Euro is one of the better performing currencies of the day so far, but investors remain concerned about the ECB’s monetary policy. The exchange rate continues to follow a reverting price pattern with the average price at 1.06441. The price currently maintains a “neutral” signal as the price trades at the 75-Bar EMA and slightly above 50.00 on the RSI.
The main price drivers for the Euro over the next 24 hours will be the ECB President’s Speech this evening and tomorrow’s PMI indexes. If President Lagarde continues to advise the Eurozone is close to adjusting interest rates, the currency could come under pressure once more. Also investors will monitor tomorrow’s PMI indexes for the services and manufacturing sector. If the data reads lower than expectations, the Euro again could come under pressure with short term targets at 1.06088.
Michalis Efthymiou
Market Analyst
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