💸A rally that may not last ?🗽

Equity markets continued their second day of gain, but traders have reasons to doubt the longevity of the rebound. After all, there was some selling pressure into the second half of the trading days after news broke out that Apple was cutting its iPhone 14 production. This is consistent with the broader narrative of falling economic demand. 

The rally is supported by the UK walking back of its fiscal stimulus plan that could evoke higher inflation, the heart of a global economic problem at this stage. It will run contrary to the Bank of England’s path toward interest hike initiative, which was to tame inflation and chill the economy. 

Pika World believes the market still has a long route towards recovery. First, we must see the equity market holding on to most of its gain. 

🧮A cautious environment in earnings season💰

Even as significant companies beat sales and profit forecast estimates, the stocks have not risen as sharply as before. As a result, investors are likely to take a more conservative stance as they wait for more guidance on the future path of the economic demand projection by more CEOs. 

A downward projection of sales forecasts will re-rate the current valuation, thus rendering the current stock valuation expensive. 

Pika World will be monitoring the market sentiments. 

📱Netflix: A roaring comeback kid🎤

The growth engine is back on as its net new subscriber hit 2.14 million, smashings all expectations. The growth is sufficient to temporary allay investors’ fear of the possible beginning of its downward spiral development. 

CEO Reed painted a rosy picture calling it “done with shrinking quarters”. Revenue was up 6%, but it could be better at 13% had it not been due to currency matters. Hence, we are beginning to see how the dollar’s strength impacts revenue. 

The Asia Pacific continued to be an oyster for the company as revenue jumped 19%, similar to the high growth in Latin America. 

📮What’s on the menu today?📖

There are a few essential economic data. 

At 8.30 pm, we will receive data on Building Permits for September, which we expect to see a stable level at 1.53M. 

At 1 am, FOMC member Kashkari will speak again, and we will also hear Bullard speaking at 7.30 pm based on US timing.