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News Last Week - Q1 Earnings Strong
- China's stock market underperformed, despite the country's strong economic rebound.
- MSCI China index trailed behind the S&P 500, with a 1% YoY growth in profits for listed Chinese companies.
- Concerns emerged about the sustainability of the consumption bounce and a weak job market for younger Chinese workers.
- Big Tech stocks, represented by the TAMAMA acronym (Tesla, Alphabet, Meta Platforms, Amazon, Microsoft, and Apple), continued to show strong performance with impressive year-to-date returns.
- These companies displayed resilience and an ambitious expansion and diversification strategy.
- Persistent global inflation concerns with only gradual signs of cooling.
- The Federal Reserve refrained from raising interest rates due to stresses in the banking system and uncertainties around the debt ceiling.
- Positive signs in the inflation report included a slowdown in supercore inflation and a reversal in durable goods prices, largely driven by a surge in used vehicle prices.
- The main economic challenge remains to navigate back to a situation where the Effective Federal Funds Rate (EFFR) exceeds inflation.
- Wall Street is calling for rate cuts to counter the perceived imbalance between short-term rates and lower long-term Treasury yields.
News This Week - G7 Summit Starts
- The final wave of this earnings season will feature reports from major retailers including Walmart, Target, Home Depot, and Alibaba.