How will the reporting season affect US indices?

How will the reporting season affect US indices?

2023-07-24 • Dikemaskini

Earnings season is a crucial time for investors and analysts, as it provides insights into how well companies have performed over the past quarter and gives indications of their future earnings. In 2023, expectations for US Q1 earnings were low due to economic challenges and rising interest rates. Surprisingly, many companies beat these low expectations, with 75% of S&P 500 companies surpassing forecasts. However, despite the positive results, share prices haven't rallied, partly due to macroeconomic events like stress on the US banking sector and sticky inflation. 

Analysts predict a bottoming out of US earnings in the middle of the year, with potential recovery towards the end of 2023. Consumer spending remains positive, and if inflation eases and interest rates stabilize future earnings seasons could show a more positive outlook.

US100 - W1 Timeframe

US100Weekly-2407.png

US100 on the weekly timeframe has reacted from the pivot zone with an interesting close to the previous week - a pin bar candlestick pattern. Considering that the 50-period moving average is also currently below the 100-period moving average, and the pivot zone falls around 78% of the Fibonacci retracement of the previous drop, I am actively searching for selling opportunities to trade towards the retest of the 100-period moving average.

Analyst’s Expectations: 

Direction: Bearish

Target: 13809.06

Invalidation: 15808.39

US500 - W1 Timeframe

 US500Weekly-2407.png

US500 is sleek; the price is at a rally-base-drop supply zone around the 88% Fibonacci retracement of the previous drop, and the 50-period moving average is below the 100-period moving average. This suggests that the drop will continue from there, with the 100-period moving average as its likely target.

Analyst’s Expectations: 

Direction: Bearish

Target: 4232.30

Invalidation: 4615.15

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

TRY TRADING NOW

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