Global stocks got a surprise boost higher on Friday after Japan’s central bank cut a benchmark rate below zero to stimulate its economy and some improvements in earnings. Microsoft led a major rally in the technology sector, up 3.6% the strongest session in technology shares since August. The S&P 500 finished the day 2.69% higher but closed the month down -5.12%. Risk assets were also boosted by weak fourth-quarter U.S. GDP growth data, which raised arguments that the Federal Reserve may go slower than expected on future rate hikes.
Risk flows have been mostly constant throughout the first month of the year, dominated by risk-off sentiment. However, rotation flows poured into all U.S. assets on Friday including stocks, bonds and the dollar. The symmetric triangle pattern on the stock indices and the ascending triangle on the U.S. dollar posted since Wednesday on our site’s RQ Cross Box analytics provided advance notice of a potential spike in price action. Will we see continuation in the week ahead? We face a busy economic calendar including employment data and more earnings reports. I will be focusing on the correlations between the major asset classes to spot institutional activities and any potential unwinding of recent positioning, especially after data reports.
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Joe Rios – Founder, Rios Quantitative LLC
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The Insider’s Quant (I.Q.) Room
Einstein III Automated Trading System Class
Monday – 12:30 pm
What’s Next in The Week Ahead
Wednesday – 12:30 pm
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Friday – 12:30 pm
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MONDAY
4:30 AM GDP Manufacturing PMI
10:00 AM USD ISM Manufacturing PMI
11:00 AM EUR ECB President Draghi Speaks
10:30 PM AUD RBA Rate Statement
TUESDAY
4:30 AM GBP Construction PMI
5:00 AM EUR Unemployment Rate
4:45 PM NZD Unemployment Rate
7:30 PM AUD Building Approvals
8:45 PM CNY Services PMI
WEDNESDAY
4:30 AM GBP Services PMI
8:15 AM USD ADP Nonfarm Climate Change
10:00 AM USD ISM Nonmanufacturing PMI
10:30 AM CL Crude Oil Inventories
THURSDAY
7:00 AM GBP Monetary Policy Summary
7:45 AM GBP Gov. Carney Speaks
8:30 AM USD Unemployment Claims
7:30 PM AUD Monetary Policy Statement
FRIDAY
8:30 AM USD Nonfarm Employment Change
8:30 AM CAD Unemployment Rate