ZuluTrade Blog

Market Recap – Earnings Season

Market View | Thursday, January 16, 2020 11:53 AM GMT

The phase 1 trade deal between USA and China has been signed yesterday, in the White House. Market participants have not followed the selling the fact scenario. The phase 1 deal does not refer to the Chinese significant subsidies that violate WTO rules. It includes the Chinese concession to make purchases of about $200bn over the next two years, including the doubling of its agricultural purchases to $40bn and the increase of energy and manufacturing purchases. It additionally includes the Chinese concessions to stop their forced technology transfers policy.

The risk-on mode can also be attributed to the 4Q19 earnings season that does not confirm the falling earnings outlook. With the exception of Goldman Sachs, US banks are beating expectations. Yesterday, it was Bank of America and BlackRock’s turn to report impressive numbers, as JP Morgan did on Tuesday.

Macro releases:  Yesterday’s European numbers were low. The trade balance decreased and industrial production does not seem rebounding. On the other hand, the Japanese machinery orders and the impressive increase of the Chinese M2 are fueling the risk-on mode. Today’s economic calendar includes a health check on the US retail sales and the earnings of Morgan Stanley


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