Besides, demand for smartphone devices, goods and electric vehicles remains robust though, putting supply chain constrains into focus.
After several weeks of gains, investors are still querying the probability for oil prices to stay elevated above the 100-dollar mark, exacerbating concerns over rising inflation.
Last week was quite the rollercoaster. Global market sessions packed more action than a John Woo flick (by the way, still waiting for the remake of his 1989 classic, The Killer, with our very own Lupita Nyongo).
One word to describe the session: Danger. An uneven earnings season led to heightened market volatility, with the FAANG companies painting a divergent outlook. Facebook lost more than a quarter of its market value on Thursday, dragging the S&P 500 index down by more than two per cent.
Investors were disappointed to see its Daily Active Users (DAUs) falling for the first time, and its revenue guidance were below expectations.
While Tesla, Apple, Alphabet and Amazon (soared 15 per cent as its earnings per share beat consensus by a wide margin, thanks to its diversified business model) topped market estimates with stellar results, Netflix disappointed investors with lower-than-expected forward guidance and user growth.
Paypal dropped 22 per cent of its value. With these companies accounting for a large share of the S&P 500 index, their earnings had an outsized impact on the benchmark. No rest is expected this week with Pfizer, Coca-Cola and Twitter among the key companies due to report results.
On the currency market side, a more modest picture prevailed. The European Central Bank opted to leave its deposit rate unchanged at -0.5 per cent as unanimously expected - the bank maintained its guidance on interest rates, saying they would remain at present or lower levels until the conditions for a rate hike have been met.
As a result the euro trading remained subdued at near pre-announcement levels just under 1.1300. Its counterpart, the Bank of England equally surprised no one in raising rates 25bps. However, the narrow 5-4 vote in favour of the 25bps hike (the other four members looked for a 50bps hike) has got the market expecting an extra hike sometime this year.
Commodities, on the other hand, were on a rampage. Oil in particularly raced to 100 dollars per barrel (a seven year high) as the narrative over Russia and Ukraine continued to play to global audience.
With all this action, it can be hard for investors to stay the course. Those following the FAANG story should expect more choppy sessions ahead. Concerns around their growth momentum amid rising wage pressures and the gradual exit from the pandemic, which affects people’s lifestyle and appetite for digital services, means these stocks could be rocky at best.
Besides, demand for smartphone devices, goods and electric vehicles remains robust though, putting supply chain constrains into focus.
After several weeks of gains, investors are still querying the probability for oil prices to stay elevated above the 100-dollar mark, exacerbating concerns over rising inflation.
Technically, the CCI (commodity channel index) remains in overbought territory on both the monthly and daily chart with divergence potentially indicating that the momentum of the upward move may soon be losing steam.
In all, investors interested in participating in these opportunities can trade through registered local online fx brokers via contracts For Differences (CFDs) and/or their currency offerings.
Mwanyasi is the managing director at Canaan Capital
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
