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Nasdaq 100, Hang Seng, ASX 200 Rise on Big Tech Earnings Boost

Nasdaq 100, Hang Seng, ASX 200 Rise on Big Tech Earnings Boost

Margaret Yang, CFA, Former Strategist

NASDAQ 100, HANG SENG, ASX 200 INDEX OUTLOOK:

  • US equities returned to upward trajectory as retail trading frenzy faded, stimulus in focus
  • Alphabet and Amazon delivered strong Q4 earnings, surging 7.7% and 1.3% respectively afterhours
  • Asia-Pacific markets are poised to extend a three-day gain amid favourable sentiment, oil gained
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Nasdaq 100, Alphabet, Amazon earnings, Asia-Pacific at Open:

All three major US equity benchmarks climbed for a second day as a retail trading frenzy faded and market volatility declined. The Nasdaq, Dow Jones and S&P 500 indices finished up 1.6%, 1.6% and 1.4% respectively. Market focus returned to corporate earnings, pandemic developments and President Joe Biden’s US$ 1.9 trillion fiscal stimulus plan. Sentiment appears to be boosted by strong Q4 corporate earnings, with Alphabet and Amazon and Alibaba delivering upbeat results in afterhours trade. This may lead the Nasdaq 100 futures to advance further and set a favorable tone for Asia-Pacific markets.

Alphabet (beat):

  • Revenue: US$ 46.3 billion vs. US$ 44.55 billion estimated
  • EPS: US$ 22.30 vs. US$ 15.57 estimated
  • Strong advertisement revenue and growth in the cloud business are among the highlights

Amazon (beat):

  • Revenue: US$ 125.6 billion vs. US$ 119.7 billion estimated
  • EPS: US$ 14.1 vs. US$ 7.34 estimated
  • Largest quarterly revenue by far is encouraging, but change in CEO may raise concerns over the transition period

Alibaba (beat) :

  • Revenue: 221.08 billion yuan, vs. 214.4 billion yuan estimated
  • EPS: 22.03 yuan vs. 20.87 yuan estimated
  • Core commerce revenue registered 38% yoy growth, and cloud computing business turned profit

On the pandemic front, the US has vaccinated 32.22 million people, more than the total number of Covid-19 infections in the country (26.4 million). The 7-day average of the daily new cases has fallen to 146,486 on February 1st from a peak of 259,564 seen on January 8th, marking a rapid decline in new infections with the rollout of vaccines. This trend may hint at a faster removal of lockdowns and normalize in business activity, buoying reflation hopes.

WTI crude oil prices advanced to a 12-month high of US$ 54.93, reflecting an improved energy demand outlook as the rollout of coronavirus vaccines have shown effectiveness in bringing down the global infections.

Nasdaq 100 Top 10 Stocks Performance 02-02-2021

Source: Bloomberg, DailyFX

Asia-Pacific markets look set to gain for a third day following a strong US lead overnight. Australia’s ASX 200 index traded 0.8% higher at open, testing a key resistance level of 6,810. Yesterday, the RBA unexpectedly announced an extension of its asset purchasing program by another A$ 100 billion after the current one expires in April. The move led the Australian Dollar and the 10-year yield to fall and boosted equity prices. The central bank’s dovish stance may continue to support a rally in its stock market alongside improvement observed in the labor market.

The Hang Seng Index is attempting to recover some lost ground this week as mainland investors returned to bid for tech stocks. Liquidity conditions eased after the PBOC injected CNY 80 billion via reverse repo operations on Tuesday, leading the short-term money market rates to fall. Southbound net capital flows via the stock connections rebounded this week, with HK$ 17.3 billion flowing into the Hong Kong stock market on Tuesday. Total southbound flows contributed to around 30% of total turnover in the HKEX.

Source: Bloomberg, DailyFX

Nasdaq 100 Index Technical Analysis:

Technically, the Nasdaq 100 index has returned to the “Ascending Channel” and is set to carry on its upward trajectory within it as highlighted in the chart below. The bull trend remains intact and is well-supported by its 50-Day Simple Moving Average (SMA) line. The formation of a bullish MACD crossover suggests that near-term momentum has turned upwards. Immediate support and resistance levels can be found at 13,360 (127.2% Fibonacci extension) and 13,860 (161.8% Fibonacci extension) respectively.

Nasdaq 100 Index – Daily Chart

Hang Seng Index Technical Analysis:

The Hang Seng index has regained upward momentum after suffering from severe selling last week. The index has likely found strong support at the 50% Fibonacci retracement level (28,060) and has since rebounded. Clearing the next resistance of 29,160 (23.6% Fibonacci retracement) may open the door for further upside potential with an eye on 30,000-30,140.

Hang Seng IndexDaily Chart

ASX 200 Index Technical Analysis:

The ASX 200 index is piercing above the ceiling of a range between 6,575 to 6,810 as highlighted in the chart below. A successful attempt to breach the upper bound of 6,810 may open the door for further upside potential with an eye on 6,900. The formation of a bullish MACD crossover reflects regained upward momentum that may underpin price strength.

ASX 200 Index – Daily Chart

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S&P 500 Earnings Calendar – February 2-3rd2021

NameDatePeriodActualEstimateSurprise
Chipotle Mexican Grill Inc2/2/2021Q4 20 3.48 3.722 (6.50)
Globe Life Inc2/2/2021Q4 20 1.74 1.713 1.60
Atmos Energy Corp2/2/2021Q1 21 1.71 1.578 8.60
STERIS PLC2/2/2021Q3 21 1.73 1.506 14.90
United Parcel Service Inc2/2/2021Q4 20 2.66 2.145 24.00
Amcor PLC2/2/2021S1 21 0.27 0.335 (20.30)
Eaton Corp PLC2/2/2021Q4 20 1.28 1.205 6.20
IDEXX Laboratories Inc2/2/2021Q4 20 2.01 1.398 43.90
Marathon Petroleum Corp2/2/2021Q4 20 (0.94)(1.407)33.20
Pfizer Inc2/2/2021Q4 20 0.42 0.512 (18.00)
Waters Corp2/2/2021Q4 20 3.65 2.884 26.60
McKesson Corp2/2/2021Q3 21 4.60 4.148 10.90
Emerson Electric Co2/2/2021Q1 21 0.83 0.677 22.60
Broadridge Financial Solutions2/2/2021Q2 21 0.73 0.695 5.00
ConocoPhillips2/2/2021Q4 20 (0.19)(0.283)32.90
Catalent Inc2/2/2021Q2 21 0.63 0.554 13.70
HCA Healthcare Inc2/2/2021Q4 20 4.13 3.589 15.10
Exxon Mobil Corp2/2/2021Q4 20 0.03 0.017 76.50
Sysco Corp2/2/2021Q2 21 0.17 0.338 (49.70)
Franklin Resources Inc2/2/2021Q1 21 0.73 0.715 2.10
Electronic Arts Inc2/2/2021Q3 21 3.06 2.963 3.30
Amgen Inc2/2/2021Q4 20 3.81 3.338 14.10
Alphabet Inc2/2/2021Q4 20 19.24 15.58 23.50
Amazon.com Inc2/2/2021Q4 20 14.09 7.343 91.90
Fortune Brands Home & Security2/2/2021Q4 20 1.25 1.164 7.40
PerkinElmer Inc2/2/2021Q4 20 3.96 2.999 32.00
Chubb Ltd2/2/2021Q4 20 3.18 2.845 11.80
Aptiv PLC3/2/2021Q4 20 1.008
Biogen Inc3/2/2021Q4 20 4.796
Boston Scientific Corp3/2/2021Q4 20 0.314
AbbVie Inc3/2/2021Q4 20 2.845
Humana Inc3/2/2021Q4 20 (2.365)
Avery Dennison Corp3/2/2021Q4 20 2.087
Howmet Aerospace Inc3/2/2021Q4 20 0.169
WW Grainger Inc3/2/2021Q4 20 3.866
IDEX Corp3/2/2021Q4 20 1.308
Align Technology Inc3/2/2021Q4 20 2.114
Mid-America Apartment Communit3/2/2021Q4 20 1.615
MetLife Inc3/2/2021Q4 20 1.499
QUALCOMM Inc3/2/2021Q1 21 2.094
Lincoln National Corp3/2/2021Q4 20 1.908
KLA Corp3/2/2021Q2 21 3.187
PayPal Holdings Inc3/2/2021Q4 20 1.001
Cognizant Technology Solutions3/2/2021Q4 20 0.897
Aflac Inc3/2/2021Q4 20 1.048
AvalonBay Communities Inc3/2/2021Q4 20 2.087
eBay Inc3/2/2021Q4 20 0.817
Qorvo Inc3/2/2021Q3 21 2.661
Allstate Corp/The3/2/2021Q4 20 3.848

Source: Bloomberg

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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