Stock Market Today
US and European futures are extending their gains as investors believe that the worst for the equity markets for this year may be over for now. All of this price action is taking place while we have not seen inflation reaching its peak. However, many believe that inflation in the US and Europe is most likely to be near its peak level.
Regarding economic numbers, traders will pay close attention to the Canadian CPI m/m number. A higher inflation reading is most likely translated into more aggressiveness from the central bank, which wants to lower inflation by increasing the interest rate. Later in the day, we will also get the US existing home sales data, and the number is expected to come in at 5.37 million against the forecast of 5.41 M.
Netflix has defied gravity, or one can say that all the bad news was already baked in, and the bar was way too low for the company to beat expectations. In its latest earnings report, Netflix has shown that it can beat the odds stacked against it. The company reported only a loss of one million users rather than two million, which was anticipated in its earnings call last quarter.
The earnings report by Netflix appears to have been received positively by investors and traders. The stock soared in the after-market yesterday, and today we are likely to see the continuation of the same trend. Investors are also glad to know that the outlook for the company’s Q3 has also improved, which is again positive for the stock price, and the share price may get a further boost on the back of it.
Now, if you are wondering how Netflix was able to deliver this, the answer lies in some key decisions the company made. First, creating stickiness means not releasing all the season at once but instead breaking down the season into different parts and releasing it one by one or even releasing one episode at a time. All this has been done to reduce the churn rate and keep users on its platform.
The EUR/USD, which was under immense selling pressure in the past week, has seen fresh bids coming this week as investors continue to bet that the ECB is firmly thinking of increasing its interest rate. There is no doubt that the ECB is in a very tight spot as the risk of recession remains a real possibility, and the bank will have to make a tough decision. Yesterday, we heard from more policymakers that the bank is likely to increase the interest by 50 basis points, and this news provided further support for the Euro. The comments by the ECB assured traders and investors that the ECB is serious about tackling higher inflation and will do that at any cost.
Bitcoin prices continue to boost optimism among investors and traders, and there are more headlines in the market about the bitcoin price forming a bottom. Traders are keeping their eyes peeled at the next important price for the Bitcoin price, which is its resistance of 25K, followed by 30K. It is unclear if the price will reach the 30K price mark that easily, but once the resistance of 25K is violated, the chances will be much higher for the price to retest the resistance of 30K.
Oil prices continue to remain volatile, and they are trading soft today. The price of oil jumped by 5% on Monday and dipped 1.4% yesterday, and today traders are unsure if crude oil price can continue its rally. President Putin issued a fresh warning yesterday night, saying that oil prices are likely to soar more if any caps are applied on Russian oil. This month, Russia has more oil as the nation’s producers have pumped 107 million b/d on average from July 1st to 17.