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Analysis

Technology sector loses ground

BY Janne Muta

|July 20, 2023

Dow continued to rise but lost some momentum yesterday. Early on in the trading day, the positive momentum was fueled by strong bank results and a decrease in inflation globally. Regional banks reported stabilized deposits in the second quarter, easing concerns about loan accessibility. Later in the New York session sellers pushed equities lower, with Nasdaq losing the most. This could result in weakness in the S&P 500 index. USD continues to trade sideways while yields continue to slip lower, supporting gold.

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Despite a significant decline in quarterly profit, Goldman Sachs shares gained 0.97% while the financial sector as a whole added 0.43%. Technology sectors shed 0.25% with the Nasdaq index losing 0.05%. Nasdaq futures have since traded lower by 0.5% in the Asian session.

The quarterly earnings announcements dominate the stage as the major US banks have kicked off the earnings season on a positive note. Goldman Sachs disappointed yesterday but investors were still bidding the stock higher. However, technology and consumer companies have been the driving force behind this year's market rally and will soon take centre stage.

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XAUUSD

Gold remains bullish above 1970 and could trade to 1998. Below 1970, look for a move to 1965.

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USDCAD

USDCAD is bearish below 1.3243 and could trade down to 1.3094. Above the level, look for a move to 1.3280.

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S&P 500

S&P 500 has rallied 20% since the March low. In the latest 10 day push the market has rallied over 4%. The risk is that that the market becomes overextended and vulnerable to corrections. It is, however, still in uptrend with the nearest key support levels at 4500 and 4530. A decisive break below those levels, could move the market down to 44700.

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CHFJPY

CHFJPY is bullish above 160.67. Below the level the market could move to 160.20. The nearest key price levels are 169.80 and 162.30.

The next main risk events

  • USD - Unemployment Claims
  • USD - Philly Fed Manufacturing Index
  • USD - Existing Home Sales
  • GBP - Retail Sales
  • CAD - Retail Sales

For more information and details see the TIOmarkets economic calendar.

Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets

Tio Markets UK Limited is a company registered in England and Wales under company number 06592025 and is authorized and regulated by the Financial Conduct Authority FRN: 488900

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

DISCLAIMER: TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.