Goldman Sachs vs. Intel


Goldman Sachs vs. Intel

The U.S market continued to climb higher yesterday, as additional buyers drove the major indices to a positive close. Apart from economic data, Goldman Sachs and Intel both released their earnings reports, having an impact on the intraday session.

Goldman Sachs beat analyst’s expectations, showing increasing profits for the second quarter. Even though the results were positive, the stock failed to present a dramatic move, finishing the session with a gain of only 0.15%. Please note that the stock is currently trading around major resistance of $150, a level that could lead to selling pressure, should the indices fail to continue their recent rally.

In addition Intel released their results after the closing bell, showing strong numbers. Tuesday evening the company released a promising statement showing that sales had jumped in the second quarter, on increasing demand. The stock jumped by 7% in after-hours trading and is now expected to have an impact on the U.S market’s open later today.

Timothy Geithner also gave the indices a boost, mentioning that the U.S economy does look like it is on the right path to recovery. The Treasury secretary stated that even though further problems in the economy and the financial sector are appearing, the U.S has the ability to deal with the situation. One must note that CIT Group Inc’s stock collapsed over the last couple of days, on speculation that the company could fail. According to Bloomberg news, the company’s failure would be the biggest collapse of a financial institution since September last year.

Dollar gave up some strength

Yesterday’s positive session in the U.S had an effect on all the tradable markets, as investors bought riskier assets. On the Forex market, the Dollar index collapsed throughout the session, allowing individual currencies to regain relative strength. The GBP/USD drifted higher, while the EUR/USD closed the session forming an additional hammer candlestick. During morning hours the EUR/USD rallied and is now trading below trend line resistance.

From a technical point of view the EUR/USD has now formed a wedge pattern and is trading below its break-out line. Even though this trade could potentially hit the 1.43 level, one must note that the risk reward ratio is not overwhelming, especially as the trend is still in range.

Economic news also had an influence on the various currency pairs as Germany’s ZEW investor confidence result unexpectedly dropped for the first time in nine months from 44.8 to only 39.5. Even though certain sectors in the Euro-zone are showing slight improvement, one can see from the result that investors are still skeptical, due to the current situation

Over in the U.K, the yearly CPI figure showed a steady rate, coming out at 1.8%, just off the BOE’s comfort level of 2%. The core rate was unchanged, showing a positive result of 1.6%.

In the U.S the Commerce Department released its June retail sales figures, showing that the sector had improved by 0.6 percent, seasonally adjusted from the previous month but had decreased year-over-year.

Market Data to Watch Out For

Even though sentiment is slightly improving, characterized by an increasing stock market and declining Dollar, currency pairs continue to trade in range. A wave of data is going to be released today, starting with European CPI figures. Analysts are expecting to see a drop in prices as the Euro-zone is still trying to deal with economic contraction. Later on during the session, U.S Data will grab investor’s attention as crude inventories are expected to be released, followed by the FOMC meeting minutes.