S&P 500: Contending a sweeping decline in earnings – Westpac

FXStreet Team FXStreet

The Fed’s overwhelming policy response has contained the downside but equities still need to contend with a dramatic decline in earnings, per Westpac Institutional Bank.

Key quotes

“While earnings forecasts are near impossible in the current environment and a record number of S&P 500 companies have withdrawn guidance, we do have a handle on GDP prospects and that top down signal for earnings provided by GDP expectations remains poor.”

“Earnings per share and the 12-month forward PE ratio tend to move in line with GDP growth. With activity expected to decline at least as much as 2008/09 earnings per share could be down anywhere from 40% to 60% on levels a year ago.”

“GDP forecasts are consistent with the 12-month forward PE ratio falling 5-6pts on levels a year ago too (currently 18.7). It remains to be seen whether policy support can continue to grant equities immunity from the harsh reality of an earnings collapse.”

Author

FXStreet Team

FXStreet

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.