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IPhone revenue miss takes US stock markets lower

EUR/USD(Euro versus USD) –Daily Candlesticks
Source:  MT4 (October 30, 2020)

The EUR/USD has declined for 5-consecutive trading sessions. It is poised to test support near 1.1616. A break of this level would lead to a test of the 38% Fibonacci retracement level that comes in near 1.1490. The exchange rate is oversold. The current reading on the fast stochastic is 14.77, below the oversold trigger level of 20, which could foreshadow a correction.
 

TAKEAWAYS


•    S&P 500 declined 2.45% for October
•    Bitcoin rises more than 25% in October
•    Apple Misses on iPhone sales
•    Bond Yields Rise to 4-month high
•    EUR/USD drops for 5th consecutive trading session
•    DAY AHEAD:US ISM Manufacturing, Eurozone PMI Data
 

MARKETS


US stocks closed the week on a sour note ahead of the general election on Tuesday. Worse than expected iPhone sales reported by Apple after the bell on Thursday weighted on technology shares and the major averages. Sectors in the S&P 500 were mixed, led down by tech while the energy sector bucked the trend. 

Bitcoin notched up a stellar month, rising slightly more than 25% in October. Bitcoin versus the greenback closed the month at 13,535 which was the highest monthly close since the all-time monthly closing high in December 2017 at 13,880. 

The EUR/USD pair dropped for a 5th consecutive session on Friday and declined 1.7% for the week. Commentary on Thursday from the ECB that they would likely cut rates in December after dovish staff economic projections weighed on the European currency. 

Gold prices rebounded slightly on Friday but declined 1.2% for the week. Gold has declined in tandem with equities and has not been a haven. The rally in the US dollar weighed on the price of the yellow metal. Oil prices declined for a 3rd consecutive trading session on Friday and declined more than 10% for the week. The resurgence of the spread of COVID-19 and a larger than expected build in crude oil inventories generated headwinds for oil.
 

Apple Misses on iPhone Sales


Apple reported better than expected Q4 earnings after the closing bell on Thursday but iPhone sales missed the mark. Q4 earnings per share came in at $0.73 per share compared to expectations that EPS would come in at $0.70 per share. Q4 revenue was reported at $64.70 billion versus an expectation of $63.47 billion. Sales from iPhones in the fiscal Q4 dropped 21% to $26.44 billion missing expectations of $27.06 billion. Apple shares declined by 5.6% on Friday, dragging down the broader markets.
 

Bond yields


Stronger than expected US consumer spending data lifted US bond yields to the highest weekly close since June 2020. The robust upward momentum in US bond yields in conjunction with the commentary from the ECB weighed on the US dollar. Next week’s data, which includes ISM manufacturing, ISM services, and the US employment report – not to mention the election - will help provide a clear direction for US yields.