NAGA Weekly Recap July 17 — 21 — 2023

This week, we observed significant moves across the markets, from Dow Jones's remarkable winning streak and pivotal tech sector earnings to Gold's attempted rally and EUR/USD's anticipation of central bank meetings.

Join us as we delve deeper into these market developments, providing the insights to navigate your investment journey.

The Dow Jones notched a 9-day win streak, its longest win since February 2021

The Dow Jones Industrial Average marked its longest winning streak since February 2021, achieving growth for nine consecutive days. This growth was driven by investors' positive reactions to strong earnings reports, such as Johnson & Johnson's, which saw a 6% stock increase.

In contrast, both the Nasdaq 100 and S&P 500 experienced drops as investor sentiment turned negative towards Tesla and Netflix's earnings.

Concurrently, the initial jobless claims fell to 228,000 last week, surpassing economist estimates of 242,000, indicating the continued resilience of the economy and labor market.

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Netflix and Tesla stocks tumble: overreaction or warning signal?

Tesla came under pressure from the company’s profit margin, which declined to 18% due to the company deciding to cut the prices of most of its cars. The concern for investors is a significant erosion compared to 2021, when Tesla had a profit margin of almost 30%.

On the other hand, Netflix saw a more substantial decline after the company’s revenue read lower than expectations. The earnings per share data came in 15% higher than analysts were expecting and the company added 5.9 million subscribers. The main concern for investors is that the company’s guidance for the third quarter’s revenue and earnings were lower than expectations.

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Gold: will XAU/USD attempt another run toward $2,000?

Gold prices are eyeing a recovery towards $2,000, spurred by a minor pullback in the US dollar and Treasury bond yields. Despite failing to hold above the resistance of $1,985, gold clung to the $1,970 support. The next targets are the $1,980 and May 17 high of $1,993, as buyers prepare to test the $2,000 threshold.

Market volatility was driven by US dollar fluctuations and speculation about the Federal Reserve's monetary policy. A recent decrease in US jobless claims signals labor market resilience, supporting the case for another interest rate hike this year.

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EUR/USD encounters resistance; ECB and Fed Meetings loom

EUR/USD is experiencing a slight recovery, hovering around 1.1130-40, following two consecutive daily declines that drove it towards 1.1100. This decline marks the pair's worst daily loss in a month. The trend for EUR/USD remains upward. Yet, short-term momentum has shifted towards the dollar as market players await the upcoming European Central Bank (ECB) and Federal Reserve (Fed) meetings.

In recent data, Euro area consumer sentiment showed slight improvement in July, and the German Producer Price Index fell 0.3% in June. The ECB is anticipated to raise rates by 25 basis points next week, with further increases predicted for September. The forthcoming ECB statement will be crucial.

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This concludes our weekly recap. Have a great weekend and see you next week! 👋