Earnings season has been top of mind for market participants

Big Tech gave major U.S stock indexes a boost yesterday and European shares ended largely unchanged as a sharp fall in oil prices took the shine off bumper profits from oil company BP. 

The euro retreated as the European Central Bank tried to cool interest rate hike expectations. Wall Street shares shook off a groggy start and early losses as Apple Inc., Microsoft Corp and Amazon.com Inc. jumped. Shares of bank stocks including Bank of America Corp, JPMorgan Chase & Co and Wells Fargo added over 1% each ahead of a U.S inflation reading due this week. 

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The Dow Jones Industrial Average rose 1.06%. The S&P 500 gained 0.84%. A jump in U.S. Treasury yields lifted bank stocks on Wall Street. Shares of Bank of America Corp BAC.N, JPMorgan Chase & Co JPM.N and Wells Fargo WFC.N all gained over 1%. 

Earnings season has been top of mind for market participants for the past few weeks. Results have been, on balance, better than estimates. As we wrap up the earnings season this week, investors' focus will likely shift from the micro corporate earnings to the macro like the Federal Reserve.

Dow Jones Industrial Average

The Dow Jones Industrial Average added 1.06%. The best performers of the session on the Dow Jones Industrial Average were Amgen Inc., which rose 7.82% or 17.48 points to trade at 241.01 at the close. Meanwhile, American Express Company added 3.26% or 6.13 points to end at 194.00 and UnitedHealth Group Incorporated was up 2.01% or 9.71 points to 493.41 in late trade. The worst performers of the session were Chevron Corp which fell 1.52% or 2.11 points to trade at 136.44 at the close. Nike Inc. declined 1.11% or 1.61 points to end at 143.53 and Merck & Company Inc. was down 0.86% or 0.67 points to 76.91.

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NASDAQ 100

The NASDAQ index added 1.28%. The top performers on the NASDAQ Composite were Society Pass Inc. which rose 42.68% to 4.68, Tritium Dcfc Ltd which was up 39.47% to settle at 9.54 and Ucloudlink Group Inc. which gained 38.57% to close at 2.03. The worst performers were Pulse Biosciences Inc. which was down 34.44% to 7.12 in late trade, Anghami De Inc. which lost 30.92% to settle at 13.470 and Nuvectis Pharma Inc. which was down 20.50% to 6.32 at the close.

Oil

Oil prices slipped for a third session today on profit-taking due to concerns of a possible rise in supplies from Iran despite industry data showing a surprising drop in U.S oil inventories. U.S West Texas Intermediate crude was at $89.18 a barrel, down 18 cents, or 0.2%. 

The contract slid about 2% on Tuesday as Washington resumed indirect talks with Iran to revive a nuclear deal. Such a deal could lift U.S sanctions on Iranian oil and quickly add supplies to the market, although a number of vital issues still need to be ironed out. 

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With the negotiations ongoing, the oil price is likely to lose steam in the next week, despite the bump higher we've seen today. The U.S going to Iran to reopen sanctions waiver talks shows, how tight the market is. Governments from the United States to Japan are looking at ways to tackle high oil prices as inflation soars. Undersupply is the key factor that has pumped up the oil price.

Precious and Base Metals

Gold prices advanced to a near two-week high on Tuesday, buoyed by mounting inflation concerns and Russia-Ukraine tensions, although expectations for a U.S interest rate hike limited gains. Spot gold rose 0.4% to $1,827.86 per ounce, after hitting its highest since Jan. 26 at $1,828.12 earlier in the session. U.S. gold futures settled up 0.3% at $1,827.90 per ounce, ahead of the U.S inflation data due on Thursday. 

There's this more of a wait-and-see approach with some of the bigger data that's coming out later this week. Gold has shown it's forming massive support around $1,800 and this will be an important week for gold. U.S. consumer prices for January are expected to rise 7.3% annually, according to a Reuters poll, after robust labor data last week fanned inflation fears. 

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Gold prices have been stuck in range-bound trade since the beginning of the year, caught between rising inflation worries and growing expectations for Federal Reserve interest rate hikes. If actual (inflation) data issues as expected or higher, the dollar should strengthen along with U.S Treasury yields leaving gold with substantial downside pressure. 

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion. Higher rates also boost the dollar, pressuring the greenback-priced precious metal. The Russia-Ukraine tensions are going to remain elevated despite some of the optimism from French President Macron. 

The dollar index rose 0.3%, making bullion expensive for other currency holders, while the benchmark 10-year U.S Treasury yields hit a more than a two-year peak. Silver rose 0.9% to $23.19, platinum climbed 1.4% to $1,034.36, while palladium eased 0.2% to $2,258.87. The copper market has been subdued since the start of the year, the price is trapped in a tight trading range with volumes and open interest sliding across all three global exchanges.

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Traditional Agricultures

Soybean prices fell yesterday, a day after hitting an eight-month high, ahead of the U.S Agriculture Department’s monthly global supply and demand assessment that is expected to downgrade South American crop production. Corn also eased, while wheat firmed, underpinned by ongoing dryness across the U.S southern Plains.

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