FED chairman Powell once again reassure, that the interest rates

Weekly notes – 31 January – 06 February 2021.

The US earnings season is on and it is shaping to be a very good one, the companies that have reported earnings so far, are beating the analyst’s prediction by 17% on average. Next week the earnings season continues with some big companies expected to release earnings, Amazon, Alibaba, Google, Exxon, and the list go on.

The new White House administration lead by president Biden is taking action to get the COV19 pandemic in control and to improve the vaccination rollout process. This coming week the Democrats are expected to start the process to get the Biden 1.9T stimulus package done with or without the Republicans, that is what Nancy Pelosi announced last week.

Last week the FED chairman Powell once again reassure, that the interest rates are staying low for a long time, at least until 2023 and their assets purchasing program is staying on until the economy needs it.

In the second half of the year, when hopefully all of us will be out again, should get this economy in full gear and lead to a recovery in all of the lagging sectors, like retail, travel, and leisure, and so on.

The red signals are that all these stimulus packages may lead to overheating of the economy, which may lead to inflation spikes and that will be a problem for the stock markets and eventually to the entire economy. However, we are too early in the recovery process for that. The other big concern is all the speculative activities that we see on all markets, from the stock market to the crypto and some areas of the bond markets as well.

Last week we witnessed a pullback in the stock markets, however despite that and the spike in the VIX we didn’t saw spillover the USD was not able to break to the upside, despite the risk off sentiment. The USD stayed in a range, Gold in a range as well, Silver spike to the upside, Oil steady in a range, JPY declined against most pairs, Copper declined after the long big rise, but still within the weekly, daily range.

It is interesting to note and to see that this pullback in the stock markets started after many of the indexes reached their targets for their 3^rd daily bullish wave, German DAX almost reached 2.272 FIB extension around 14 200, NASDAQ reached 2.272 FIB extension of its 3^rd daily bullish trend or 0.618 FIB extension of its 5^th daily bullish wave. French CAC 40 reach 1.618 FIB extension of its 3^rd daily bullish wave, S&P 500 reached a 1.618 FIB extension of its 3^rd daily bullish wave. Russell 2000 reached 1.618 FIB extension of its 5^th daily bullish wave. Everything is so synchronized and correlated at the time being.

• Next week focus will on the following economic data release:
  
  • Reserve Bank of Australia Cash rate announcement on Monday, February 1^st 2021
  • New Zealand Unemployment Rate on Tuesday, February 2^nd 2021
  • ADP Non-Farm Employment Change for the US – Wednesday, February 3^rd 2021
  • Bank of England Bank Rate and Asset Purchase Facility announcement on Thursday, February 4^th 2021
  • Unemployment Rate of Canada onFriday, February 5^th 2021
  • Unemployment Rate of the US onFriday, February 5^th 2021
  • Non-Farm Employment Change for the US onFriday, February 5^th 2021

• Next week we have more earnings reports from some big companies on schedule. Here is a list of a few of them:
  
  • NTDOY, Nintendo Co. – Monday, February 1^st 2021
  • NXPI, NXPI Semiconductors NV – Monday, February 1^st 2021
  • VRTX, Vertex Pharmaceuticals Incorporated – Monday, February 1^st 2021
  • CRUS, Cirrus Logic Inc. – Monday, February 1^st 2021
  • RYAAY, Ryanair Holdings plc – Monday, February 1^st 2021
  • AMZN, Amazon.com Inc. – Tuesday, February 2^nd 2021
  • BABA, Alibaba – Tuesday, February 2^nd 2021
  • GOOG, Alphabet – Tuesday, February 2^nd 2021
  • PFE, Pfizer – Tuesday, February 2^nd 2021
  • XOM, Exxon Mobil – Tuesday, February 2^nd 2021
  • CMG, Chipotle Mexican Grill – Tuesday, February 2^nd 2021
  • PYPL, PayPal – Wednesday, February 3^rd 2021
  • QCOM, QUALCOMM Incorporated – Wednesday, February 3^rd 2021
  • SPOT, Spotify Technology S.A. – Wednesday, February 3^rd 2021
  • AbbVie Inc. ABBV – Wednesday, February 3^rd 2021
  • EBAY, eBay Inc. – Wednesday, February 3^rd 2021
  • SNE, Sony Corporation – Wednesday, February 3^rd 2021
  • BIIB Biogen – Wednesday, February 3^rd 2021
  • GRUB, GrubHub – Wednesday, February 3^rd 2021
  • SNAP, Snap Inc. – Thursday, February 4^th 2021
  • F, Ford Motor Co. – Thursday, February 4^th 2021
  • NOK, Nokia Corporation – Thursday, February 4^th 2021
  • GPRO, GoPro – Thursday, February 4^th 2021
  • GILD, Gilead Sciences Inc. – Thursday, February 4^th 2021
  • PTON, Peloton Interactive – Thursday, February 4^th 2021
  • BMY, Bristol-Myers Squibb – Thursday, February 4^th 2021
  • TMUS, T-Mobile US, Inc. – Thursday, February 4^th 2021
  • DB, Deutsche Bank AG – Thursday, February 4^th 2021
  • PM Philip Morris Intl. – Thursday, February 4^th 2021
  • REGN, Regeneron Pharmaceuticals, Inc. – Friday, February 5^th 2021
  • CBOE, CBOE Holdings, Inc. – Friday, February 5^th 2021
  • ZBH, Zimmer Biomet Holdings, Inc. – Friday, February 5^th 2021

Have a happy, positive, and profitable week ahead!