Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Promising big tech results failed to drive broad-based strength: Brent crude, UOB, Aluminium

Promising big tech results put Nasdaq on the front foot overnight, but a still-cautious risk environment means that the strength was not mirrored across the other sectors.

Source: Bloomberg

Market Recap

Promising big tech results put Nasdaq on the front foot overnight (DJIA -0.68%; S&P 500 -0.38%; Nasdaq +0.47%), but a still-cautious risk environment brought by renewed bank jitters and signs of economic weakness means that the strength was not mirrored across the other sectors. 10 out of 11 S&P 500 sectors remain in the red, with technology (+1.7%) being the outlier due to a 7.2% jump in Microsoft’s share price.

After-market earnings releases saw Meta Platforms joining the ranks of big tech outperformance, riding on a rebound in advertising spends in China to deliver a 3% uptick in sales from the previous year. Investors seem to take comfort in its positive revenue growth after three quarters of decline, while giving a better-than-expected sales guidance. Its share price is up 12% after-market.

Economic data overnight saw a positive surprise in US durable goods orders at first glance, but stripping away the surge in aircraft orders, underlying economic weakness continues to be presented. Core durable goods orders (excluding defence and aircraft) has contracted by 0.4% (-0.1% expected), which adds to the list of recent data pointing to a sharper moderation in economic activities.

With that, further anchoring of a rate pause from the Federal Reserve (Fed) and earlier rate cuts in September this year (previously November) translates to a 0.4% decline in the US dollar overnight. However, gold prices failed to move higher on the weaker dollar, potentially reflecting some exhaustion in buyers.

The downbeat economic outlook also brought oil prices to its month-to-date low, reversing all its previous gains from the OPEC+ production cut announcement. Concerns of a sharper moderation in oil demand outlook seems to have outweighed optimism around tighter supplies conditions for now. Having completed its previous gap-covering process, prices have broken below the US$80.00 level. Further downside may leave its 2023 bottom on watch.

Oil Source: IG charts

Asia Open

Asian stocks look set for a negative open, with Nikkei -0.51%, ASX -0.45% and KOSPI -0.56% at the time of writing (8.30am SGT), reflecting some renewed caution in the risk environment. Overnight, Singapore has delivered its third round of property cooling measures since December 2021, with a surprise doubling in additional buyer’s stamp duty (ABSD) for foreigners’ purchases of residential property in Singapore.

Persistent increases in private home prices may warrant the decision, with prices increasing 3.2% in quarter one (Q1) compared to the 0.4% increase last quarter, suggesting that tighter monetary conditions, previous increases in property tax and the uncertain economic outlook have yet to put a dent in market demand. The series of measures may reflect the authorities’ resolve in capping prices’ growth, which may make it harder for property developers to pass on rising costs to home buyers. Some downside reaction in their share prices may be expected.

On another front, UOB has reported a 70% year-on-year jump in net profit for Q1 2023. That said, signs of peaking net interest income are presented with a slower year-on-year growth (42% versus previous 52%), while net interest margin has moderated to 2.14% from previous 2.22%. Loan growth has also contracted for the first time in years. The only pocket of optimism comes from strength in net fee income, but an uncertain economic outlook may still put a recovery in this segment in check.

UOB share price has been trading within a wider symmetrical wedge pattern but has thus far failed to overcome its 100-day moving average (MA) despite multiple retests. A breakdown of the crucial S$29.60 level may provide conviction of bears in greater control, with a bearish cross on moving average convergence/divergence (MACD) pointing to a reversal in momentum to the downside. That may potentially leave the upward trendline support on watch next at the S$28.50 level.

UOB Source: IG charts

On the watchlist: Aluminium prices back at lower channel trendline support

A 5% sell-off over the past week has brought aluminium prices back to the lower trendline support of a near-term channel pattern and put its higher highs/higher lows narrative to the test. This will leave the US$2,300/tonne level on watch, where a move lower will mark a breakdown of previous low and a support confluence zone, potentially paving the way to the US$2,250/tonne level next.

Recovery from China’s reopening has thus far seen the heavy lifting done by services, while domestic demand for aluminium has been more measured. Trading within the channel may leave the US$2,480/tonne level as resistance to watch, where the upper channel trendline coincides with an upper edge of the Ichimoku cloud.

Aluminium Source: IG charts

Wednesday: DJIA -0.68%; S&P 500 -0.38%; Nasdaq +0.47%, DAX -0.48%, FTSE -0.49%

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.