Summary:

  • Facebook (FB.US on xStation5) reports robust earnings despite recent issues
  • Wall Street ends mixed while Asian stocks have been largely lower
  • AUD gains momentum following the first quarter terms of trade data

Facebook did not have successful time over the past several weeks as its shares were afflicted by the scandal regarding a data leak. As a result, the stocks plunged almost 20% during the second half of the year, but it looks that the first quarter earnings were not influenced. Facebook reported EPS at $1.69 and total revenue at $11.97 billion both came in well above estimates pointing at $1.35 and $11.4 billion respectively. Net income grew to $4.988 billion from $3.064 billion at the corresponding period last year, and as a result operating margin improved from 41% to 46%. The number of daily active users matched expectations and totalled 1.45 billion whereas monthly active users amounted to 2.2 billion being in line with estimates as well. The company did not just beat expectations, but it also made a remarkable improvement comparing to the first three months of 2017 when EPS was only $1.04 on revenue of $8.03 billion. The financial statement was released after the final bell on Wednesday therefore any price responses in the cash market should come up this afternoon. The stock is expected to being today’s trading widely higher, and if so it could support the NASDAQ (US100) which closed above its pivotal support line yesterday.

link do file download linkThe NASDAQ held above its 150DMA on Wednesday which served as a support for bulls in the past. Should the index bounce back today being fuelled by upbeat earnings, it could lead to a move beyond 6640 points portending another pullback to the upside. Source: xStation5

While all major indices on Wall Street closed almost flat (just the US100 finished a notch below the flat line) Asian stocks lost more ground. The Chinese benchmarks moved down all but 1% each while the Japanese NIKKEI (JAP225) closed 0.5% higher. Elsewhere on the currency front one may notice that the greenback has given back some of gains it’s made so far this week, but not too much to be honest. The Australian dollar is among the best G10 currencies in the morning as it got the positive numbers concerning terms of trade for the Q1. Namely, the import price index grew 2.1% qoq while the export price index grew 4.9% – both turned out better than forecast. All in all, it means that terms of trade improved acting in favour of the Australian dollar.

link do file download linkAustralian terms of trade improved in the first quarter which could be AUD positive going forward. Source: xStation5

Finally let us take a look at the chart below suggesting that AUD bulls have a lot to do in order to change a short-term bearish trend after the pair broke down a long-term trend line a few days ago. Until the US dollar strength persists it’s unlikely the pair could get back above 0.7630, but sooner or later the USD ought to lose traction, and then the Aussie could take a breath. Anyway, the first support bears could aim for might be localized nearby 0.7500.

link do file download linkThere has been no respite for the Aussie thus far, the first buying opportunity may come up at around 0.7500 from a technical standpoint. Source: xStation5