Better than expected Q3 earnings reports from major banks powered global stock indexes to a winning week with most banks beat significantly on the top and bottom line. The earnings season continues this week, with companies such as IBM ($IBM) , Netflix ($NFLX), Tesla ($TSLA), Intel ($INTC), Johnson & Johnson ($JNJ) and P&G ($PG) reporting their results.
Elsewhere, figures on Q3 China economic growth (GDP) today will show the impact of multiple recent hits to the world’s second largest economy. The forecast is projected at 5 percent in the three months to September, slower than the second quarter’s 7.9 percent, amid pressures on factories from power shortages, supply bottlenecks and a resurgence of domestic COVID-19 cases.
Meanwhile, the first bitcoin futures ETF is set to begin trading, propelling the digital currency closer to all-time highs.
Here’s what you need to know to start your week.
The immediate support to watch for $SPX this week is at 4,320 higher low support level, potentially re-establishing its mid-term uptrend channel.
$QQQ (Nasdaq 100)
$QQQ broken out of a ‘Line in the Sand’ that was held for two months. Remains below 50D Moving Average but mid-term trend channel remains intact.
$IWM (Russell 2000)
$IWM remains trading within a nine months box range, garnering increasing attention from market participants to increase exposure of small capitalization companies into their portfolio ahead of any imminent breakout on the index. Resistance level of this box range is at $230.
$MMFI (% of Stocks Above 50 DMA)
% of stocks above 50-DMA has picked up to 53.79% from 38.95% at the start of the month. This remains below 200MA of 56.48% but individual stocks are picking up.
$GLD (Gold)
$GLD have witnessed a confluence of Moving Averages, along with tightening of trading range above $159 over the past four months. A breakout level is established at $171.60, for a new directional play.
$IEI/HYG (Credit Spread)
Credit Spread remains low at 1.48%. The market’s fear on China Evergrade default of its offshore and onshore bond payments that was due during the earlier week of the month is overstated by mainstream media.
Earnings
Dozens of companies will be reporting in the coming week, including Tesla ($TSLA), Intel ($INTC) and Johnson & Johnson ($JNJ), as the first major wave of third quarter earnings results gets underway.
On Thursday Netflix ($NFLX) kicks off third quarter reporting for the ‘FAANG’ group of U.S. tech giants Facebook ($FB), Apple ($AAPL), Amazon ($AMZN), Netflix and Google-parent Alphabet ($GOOGL).
The video streaming company said “Squid Game” has become its biggest series launch ever and Bloomberg reported that the megahit will create almost $900 million in value for Netflix.
Chinese GDP
In recent months the Chinese economy has taken a series of blows from the Evergrande-induced property market crisis, outbreaks of the delta variant, an energy crunch, supply bottlenecks and soaring commodity prices.
So, investors will be closely watching Monday’s Q3 GDP, which will be released alongside figures on factory production and retail sales. Economists are expecting growth in the world’s number two economy to have slowed to 5.2% year-on-year, the slowest in a year, from 7.9% in the previous quarter.
China’s real estate sector, a key driver of growth, is reeling from rising defaults, with sales tumbling and construction slowing as Evergrande, once China’s top-selling developer, battles against default on more than $300 billion in debts.
Bitcoin futures ETF
The first U.S.-listed bitcoin futures ETFs are set to launch in the coming week, barring a last-minute objection from the Securities and Exchange Commission.
The ProShares Bitcoin Exchange Traded Fund is scheduled to start trading on the New York Stock Exchange on Tuesday. A day later, the Invesco Bitcoin Strategy ETF, would also be allowed to launch unless the SEC blocks it.
The ETFs will be based on bitcoin futures that already trade on the Chicago Mercantile Exchange rather than the cryptocurrency itself amid regulatory concerns over a potential lack of liquidity and the risk of price manipulation on spot exchanges.
The launch of the ETFs could pave the way for a stream of similar products, potentially fueling a run higher for the world’s largest digital currency which hit peaks of $62,892 on Friday, not far from its all-time highs of $64,778
