Find out the financial markets to bet on this week.
Last week, the biggest US banks kicked off earnings season on Wall Street. Expectations were already high, but mega banks like JPMorgan and Wells Fargo exceeded them. If results continue to be positive in other sectors, market gains could fuel in weeks. Therefore, it is worth watching closely market reactions to financial reports. In addition to the S&P 500 (US500), USDJPY and cryptocurrencies are worth keeping an eye on.
US500
If the earnings season is as positive a surprise as its start, both the S&P 500 (US500) and Nasdaq (US100) could post significant gains. Banks like JPMorgan and Wells Fargo reported significantly higher earnings. EPS came in at $4.75 ($3.83 expected) and $1.25 ($1.16 expected), respectively. The significant improvement in banking results can be attributed to high interest rates. However, the main focus will now be on the earnings of companies in other sectors. Combined with optimism following low inflation readings, the S&P 500 could continue its strong upward trend.
USDJPY
The Japanese yen has recently been one of the strongest currencies in developed countries. Currency rallies are supported by concerns over Bank of Japan (BoJ) intervention, which has become a possibility again if the USDJPY rate breaches 145. Japan’s consumption index (CPI) will be released and if it surprises to the upside, it could support the strengthening yen. On Friday, Hideo Hayakawa, former chief economist and director of the Bank of Japan, admitted he expected adjustments to the BoJ’s yield curve control program in response to higher-than-expected inflation, and the Bank of Japan could increase its inflation forecast for 2023 above 2%.
Bitcoins
Bitcoin volatility remains high after Ripple’s legal victory against the SEC. Market sentiment is exceptionally positive, especially considering the growing chances of spot Bitcoin ETF approvals. However, a successful legal case can quickly change market sentiment. It should be noted that in Judge Analisa Torres’ ruling, she said that the sale of tokens to investors, including VC funds off-trade before the ICO, should be considered the sale of securities. In this case, the risk remains that the SEC will appeal the court’s decision. This further extends the SEC case against Ripple, leaving uncertainty about legislative clarity unresolved.
Original article published on Money.it Italy 2023-07-17 09:05:00. Original title: Tre mercati da tenere d’occhio
