Daily Market Insights - January 24, 2024: Mixed Performance in U.S. Stocks, Bitcoin Struggles at $39,000

Daily Market Newsletter

Date: January 24, 2024

Market Wrap

On Tuesday, major U.S. stock indexes showed mixed results. The Dow Jones Industrial Average retreated 96 points (-0.25%) to 37,905, while the S&P 500 gained 14 points (+0.29%) to 4,864, and the Nasdaq 100 rose 73 points (+0.43%) to 17,404.

Telecom services (+3.67%), household & personal products (+3.23%), and food, beverage & tobacco (+0.83%) stock sectors gained the most, while consumer durables & apparel (-2.20%), real estate (-0.53%), and capital goods (-0.27%) sectors underperformed the market.

Microsoft (MSFT) gained 0.60% to $398.90, and Nvidia (NVDA) advanced 0.37% to $598.73, both marking record closing levels.

United Airlines (UAL) rose 5.31%, Procter & Gamble (PG) gained 4.14%, and Verizon Communications (VZ) climbed 6.70% after posting better-than-expected quarterly earnings.

On the other hand, 3M (MMM) plunged 11.03%, and Lockheed Martin (LMT) fell 4.16%, as both companies gave lower-than-expected earning forecasts.

Coinbase Global (COIN) dropped 3.14%, as the stock was downgraded to “underweight” at JPMorgan.

Alibaba (BABA) jumped 7.85%. The New York Times reported that founder Jack Ma and Chairman Joe Tsai have acquired about $200 million worth of company shares.

In after-market hours, Netflix (NFLX) jumped over 8%, as the video-streaming platform reported an addition of 13.12 million subscribers in the fourth quarter, much higher than market expectations.

Meanwhile, the U.S. 10-year Treasury yield stepped up to 4.140%.

Regarding U.S. economic data, the Richmond Fed manufacturing index dropped to -15 in January (as expected).

European stocks closed lower, with the DAX 40 falling 0.34%, the CAC 40 down 0.34%, and the FTSE 100 down 0.03%.

Earlier on Tuesday, Hong Kong's Hang Seng index rebounded 2.63% after reports said the Chinese government may inject about 2 trillion yuan ($278 billion) to stabilize the stock market.

U.S. WTI crude-oil eased $0.25 to $74.51 a barrel.

Gold price added $7 to $2,028 an ounce.

Market Wrap: Forex

The U.S. dollar index got firmer to 103.57.

EUR/USD declined 29 pips to 1.0852.

USD/JPY increased 27 pips to 148.36. As expected, the Bank of Japan (BOJ) maintained its monetary policy unchanged, keeping the benchmark rate at the negative level of -0.100%. BOJ Governor Kazuo Ueda said the prospects of meeting the inflation target were increasing.

This morning, Japan's data showed a trade surplus of 62 billion yen in December (vs a trade deficit of 200 billion yen expected) with exports growing 9.8% on year (vs +9.1% expected).

GBP/USD fell 20 pips to 1.2686.

AUD/USD added 6 pips to 0.6576.

USD/CHF rose 12 pips to 0.8702.

USD/CAD declined 11 pips to 1.3467. Canada's data showed that the new housing price index was flat on month in December (as expected).

Bitcoin struggled to keep the level of $39,000. It has shed over 20% since its peak earlier this month when the first batch of spot Bitcoin exchange-traded funds (ETF) were launched.

GBP/USD, USD/JPY, EUR/USD, Dow Jones Trend Analysis

GBP/USD Intraday: key resistance at 1.2705.

• Pivot: 1.2705.

• Our preference: Short positions below 1.2705 with targets at 1.2675 & 1.2660 in extension.

• Alternative scenario: Above 1.2705 look for further upside with 1.2720 & 1.2735 as targets.

• Comment: The upward potential is likely to be limited by the resistance at 1.2705.

USD/JPY Intraday: watch 147.60.

• Pivot: 148.25.

• Our preference: Short positions below 148.25 with targets at 147.60 & 147.30 in extension.

• Alternative scenario: Above 148.25 look for further upside with 148.45 & 148.70 as targets.

• Comment: The immediate trend remains down and the momentum is strong.

EUR/USD Intraday: caution.

• Pivot: 1.0865.

• Our preference: Short positions below 1.0865 with targets at 1.0845 & 1.0830 in extension.

• Alternative scenario: Above 1.0865 look for further upside with 1.0880 & 1.0895 as targets.

• Comment: Intraday technical indicators are mixed and call for caution.

Dow Jones (CME)‎ (H4)‎ Intraday: intraday support around 37990.00.

• Pivot: 37990.00.

• Our preference: Long positions above 37990.00 with targets at 38200.00 & 38280.00 in extension.

• Alternative scenario: Below 37990.00 look for further downside with 37880.00 & 37730.00 as targets.

• Comment: The next resistances are at 38200.00 and then at 38280.00.