· Corporate profits are going to get ‘better and better,’ Credit Suisse’s Jonathan Golub predicts as earnings season begins
Credit Suisse’s Jonathan Golub is painting a more bullish picture for corporate America with earnings season officially underway.
“It’s going to get better and better as we progress throughout 2021 for their profits,” the firm’s chief U.S. equity strategist told CNBC’s “Trading Nation” recently.
Overall, he believes Wall Street is too pessimistic on S&P 500 earnings growth this season. Refinitiv estimates it will fall by 10% in the fourth quarter. Meanwhile, Golub’s forecast reflects a 4% dip in growth, and he’s not ruling out a slight gain.
· S&P 500, ASX 200, NIKKEI 225, ASIA-PACIFIC MARKET OUTLOOK:
- S&P 500 index futures edged higher alongside Asia-Pacific equity indices after an extended holiday weekend in the US.
- Janet Yellen’s Senate hearing is in focus today, followed by Joe Biden’s inauguration on Wednesday.
- The US Dollar receded as markets anticipate a ‘hands-off’ approach from the new Treasury secretary.
S&P 500 Index Technical Analysis:
Technically, the S&P 500 index extended its upward trajectory within an “Ascending Channel” as highlighted in the chart below. The bull trend is well-supported by its 20-Day Simple Moving Average (SMA) line albeit the upper ceiling of the channel may serve as immediate resistance. Support and resistance levels can be found at 3,749 (61.8% Fibonacci extension) and 3,804 (76.4% Fibonacci extension) respectively.
· Shares climb on China's economic recovery, with earnings in focus
Asian shares climbed on Tuesday as investors wagered China’s economic strength would help underpin growth in the region, even as pandemic lockdowns threatened to lengthen the road to recovery in the West.
Data out on Monday had confirmed the world’s second-largest economy was one of the few to grow over 2020 and actually picked up speed as the year closed.
European markets appeared set for a higher open with Euro Stoxx 50 futures up 0.5% and London’s FTSE gaining 0.4%. Those of Germany’s DAX rose 0.64%.
MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 1.61%, to be a whisker from record highs. Japan’s Nikkei bounced 1.53%, recovering all the losses suffered on Monday when caution had dominated markets.
· Japan's Nikkei ends higher as investors pick beaten down shares after retreat
Japanese shares closed higher on Tuesday after declining for two consecutive sessions, as investors scooped up beaten-down stocks, with automakers and semiconductor-related plays leading the rebound.
The Nikkei 225 Index ended 1.39% higher at 28,633.46, while the broader Topix inched up 0.56% to 1,855.84.
Sentiment was also buoyed after Chinese data released on Monday raised hopes that strength in the world’s second-largest economy would underpin growth in the region.
· China stocks retreat on coronavirus worries
China shares fell on Tuesday as a resurgence of COVID-19 cases hit market sentiment, with consumer discretionary and materials stocks leading the retreat.
The blue-chip CSI300 index fell 1.5% to 5,437.52, while the Shanghai Composite Index slipped 0.8% to 3,566.38.
· Samsung stocks rebound but Lee's detention raises doubts on pledges for change
Shares in Samsung Electronics and affiliates rebounded on Tuesday, reversing losses stemming from Samsung Electronics Vice Chairman Jay Y. Lee’s receiving a two-and-a-half year prison term on Monday.
· European markets open higher, buoyed by positive sentiment
European stocks opened higher on Tuesday, buoyed by hopes that an economic recovery following the coronavirus pandemic is not far off.
The pan-European Stoxx 600 climbed 0.5% in early trade, with basic resources adding 1.3% to lead gains as all sectors and major bourses entered positive territory.
European markets have been buoyed by positive sentiment in the U.S. overnight; U.S. stock futures moved higher early Tuesday as Wall Street looked to bounce back from a rough week ahead of President-elect Joe Biden’s inauguration Wednesday.
Reference: CNBC, Reuters, DailyFX
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