Outlook on gold as it hits fresh 9-month high as market awaits US Q4 GDP

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Stock market overview

Some stock markets in Asia reopened after the Lunar Year holiday.

The Hang Seng and Kospi made strong gains. In South Korea, gross domestic product (GDP) fell by 0.4% in the fourth quarter (Q4) for the first time since Q2 2020.

The market is waiting for US gross domestic product for the fourth quarter. Economists expect a 2.6% increase in Q4 quarter-on-quarter (QoQ). Also, at 1:30 p.m., initial expectations for jobless claims last week are for 205,000 new applicants.

Durable goods orders are expected to rise 2.5% month-on-month (MoM) in December. At 3 p.m., new home sales are expected to fall 2% MoM for the month of December.

Revenue

Diageo, the world’s largest spirits maker, said net sales rose 9.4% in the six months to Dec. 31, beating analysts’ forecasts of a 7.9% increase. Net sales grew by 19% in North America, mainly due to a favorable currency effect. European net sales grew by 13%.

Britvic recorded strong Christmas trading, with sales up 9% in December, led by the UK, which posted a 13.8% increase. Competitor Fevertree said full-year sales were up 11% to £344m and expects sales to grow between 13 and 18% in 2023.

In the US, Tesla shares were up nearly 6% in longer hours. The electric car maker reported earnings of $1.19 per share after closing the US market yesterday. That’s four cents higher than analysts’ expectations. Revenue was just below expectations at $24.32 billion.

In a call to investors, CEO Elon Musk said he expects a “pretty tough recession” this year, but that demand for Tesla vehicles will be “good despite likely contraction in the auto market as a whole,” adding that, with no external disruptions, Deliveries in 2023 could hit two million vehicles.

IBM reported earnings of $3.60 per share in the fourth quarter, broadly in line with analyst expectations. Total revenue remained flat at $16.70 billion for the period, compared to analyst estimates of $16.13 billion. For 2022, IBM posted revenue growth of 5.5%, the highest in a decade.

Looking ahead, the company expects annual sales growth in the mid-single digits at constant exchange rates, weaker than the 12% it reported last year. In addition to the profit, IBM announced 3,900 layoffs, or 1.5% of the group’s workforce. The layoffs will create a $300 million charge in the current quarter.

American Airlines will report its quarterly earnings today ahead of market opening. Analysts forecast earnings per share of 84 cents, estimates American Airlines could easily surpass.

In a filing earlier this month, the airline said it expects to earn between $1.12 and $1.17 per share in the period, much more than its previous estimate of 50 cents to 70 cents. This gain will at least be a rebound from the loss of $1.42 per share in the same quarter last year.

Visa is expected to release its Q1 earnings tonight after the closing bell. Analysts expect earnings of just over $2 per share on revenue of $7.70 billion.

The market is also waiting for revenue from Intel, Dow and Comcast.

On Friday, Chevron will report its fourth-quarter earnings and is expected to post record earnings for 2022, more than $37 billion, double the year before. Ahead of earnings, Chevron announced it was tripling its share repurchase program to $75 billion, with a quarterly dividend of 6%. It did not set a timetable for the buybacks.

The announcement goes against last year’s call from the Biden administration to invest in manufacturing to lower energy prices for consumers and attract investment in renewable energy. Not surprisingly, it didn’t take long for the White House to express its disapproval. A White House spokesman said: “For a company that claimed not long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders is certainly a strange way to let it go. to see.”

Raw materials

Yesterday afternoon, the EIA reported a small increase in crude oil inventories. Crude oil inventories rose by 500,000, in contrast to the cumulative increase of 27 million barrels in the first two weeks of the year.

Gasoline stocks rose by 1.8 million barrels, distillate stocks fell by 500,000.

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