3 Things You Need to Know About the Market Today

1, Apple Earnings in Focus Ahead of Fed Rate Decision

Apple (AAPL), 4-Hour Chart Analysis

The major global stock indices are having a positive day so far, and with all eyes on tomorrow’s Fed meeting and the quarterly earnings of some of the largest public companies coming up in the next few days. 3M (MMM), Pfizer (PFE), Verizon (VZ), and Lockheed Martin (LMT) already reported today before the bell, and besides 3M all of them opened lower, but that wasn’t enough to stop the bullish trend that of the European session.

Apple (AAPL) is scheduled to report after the Wall Street close today, and following the recent profit warning, which was focused on weak iPhone sales, bulls are hoping for a sizeable beat (EPS consensus is $4.17, with a revenue estimate of $84 billion) with growth in the services segment being a possible positive catalyst. Given yesterday’s dismal outlook regarding the Chinese market from Nvidia (NVDA) and Caterpillar (CAT), the risks of a global slowdown are clear, but the US consumer segment has been relatively strong in the previous quarter, so we wouldn’t be surprised on a positive reaction by the stock tomorrow, which could fuel a pre-Fed rally.

2, Huawei Criminal Charges Cast Shadow on Trade Talks

Shanghai Composite Index CFD, 4-Hour Chart Analysis

Following last month controversial arrest of the company’s CFO Meng, Huawei is facing criminal charges on the US regarding the violation of the sanctions against Iran, wire fraud, and theft of trade secrets among others.  The company has also been repeatedly accused of Intellectual Property (IP) theft and corporate espionage. previously, and although Huawei’s growth has been stellar in recent years, with its revenue increasing by almost 500% in 4 years, the legal process and the possible widespread sanctions against the firm could undermine its global growth plans.

Tech stocks in China already plummeted following the announcement, and global stock markets could get under pressure later on this week, should the decision affect the next round of trade talks between the two countries. The issues of IP, market-distorting subsidies to local companies, and forced technology transfers are among the choke points of the negotiations, so the new, but unsurprising development could be a major drag in the coming months.

Contradicting reports surfaced in recent weeks regarding the state of the talks amid the ongoing risk rally, and although the Chinese Yuan has been appreciating against the weaker Dollar, Chinese stocks remain suspiciously weak despite the strong bounce on Wall Street. The Shanghai Composite is still dangerously close to its bear market low, and should the global tailwinds turn, new lows will likely be ahead for the benchmark.

3, Another Huge day in the Brexit Saga

GBP/USD, 4-Hour Chart Analysis

We are likely in for another volatile day in British assets, with the House of Commons voting on various Brexit-related proposals. Today, Theresa May already told her cabinet that she will ask the EU to reopen talks regarding the draft Brexit plan that has been rejected by a hefty margin earlier this month. Several EU leaders already rejected a new round of talks in the past weeks, but given the approaching deadline (29th of March) for a deal, we wouldn’t rule out a change of mind by them.

One of the key proposals, which has a good chance of passing, today is about extending the deadline (by up to nine months, in the case of a continued deadlock. The issue of the backstop on the Irish border is the most pressing, but there are lots of other amendment proposals that could be accepted. In any case, should the House accept the deadline, the Pound could remain firm despite its overbought technical position, even as we expect volatile trading in the coming days, especially should the EU remain firm about not changing the draft plan.

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Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.