Is the Market Bounce Sustainable?

By Tomasz Wisniewski|

Published: October 25 2023, 05:22 GMT+0

Is the Market Bounce Sustainable?

The market pulse is palpable this Wednesday, with numerous indicators, earnings, and events to interpret and assimilate. We commenced Tuesday with several major players disclosing their quarterly performance, giving traders much to mull over. Microsoft, Alphabet, Visa, and Coca-Cola all unveiled their results. What’s particularly noteworthy was the post-market response; Microsoft shares surged by almost 4%, while Alphabet, in stark contrast, dwindled by nearly 6%. Coca-Cola, having revealed its numbers prior to trading, saw its stock rise by a commendable 3%.

Today is yet another eventful day, particularly with Meta Platforms set to announce its results post-market. Other notable names on the docket include IBM, Boeing, and T-Mobile. Beyond corporate earnings, macroeconomic indicators have also piqued interest. The recently released PMIs from key global economies provided a mixed bag of results. Most notable was the unexpected dip in the German flash services PMI, which came in below the 50-mark. However, US PMIs bucked the trend, with both the manufacturing and services segments pushing past this threshold.

Australia’s latest inflation data also garnered attention, reporting a substantial annual rise to 5.6%. The currency markets responded promptly, propelling the Australian dollar to the top of the pack. This dovetails with its performance yesterday, where it dominated the currency landscape. Furthermore, the US dollar, following a distinct reversal trend, is also showcasing its resilience and strength, leading to significant movements in pairs like EURUSD and USDCHF.

Shifting gears to the stock indices, there’s a tangible optimism in the air. Building on the momentum from Monday, indices like the S&P 500, NASDAQ, and DAX are rallying from critical support zones. Traders will undoubtedly be watching closely to determine whether this upward swing can be sustained throughout the week. As we round off with commodities, oil prices have taken a hit, marking their third consecutive bearish session. Conversely, while precious metals maintain their elevated levels, the bullish thrust appears to be waning, hinting at a potential correction in the offing.