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Earnings: Gitlab Up, RBA Hikes Before FOMC

GitLab’s stock increased by 20% as a result of strong profits and encouraging guidance. The RBA increased the cash rate by 25 basis points on Tuesday. Most economists anticipated the 3.1% increase by a quarter point, the highest level since the end of 2012. Stocks in the United States are falling as investors consider economic statistics and the ongoing Fed’s battle against inflation.

Earnings report

GitLab Inc.’s shares skyrocketed during today’s extended trading session as a result of quarterly earnings and forecasts that were easily above Wall Street’s expectations. During the normal trading session, the price of GitLab fell more than 7%, reaching a low of $38.33. On the strength of the news, it soon caught fire, jumping more than 20% after hours.

Earnings reports continue from Tuesday with investors’ eyes on BHP Group and Ferguson plc before the scheduled FOMC meeting mid-next week. 

Here is what to expect;

BHP Group Limited

BHP Group Limited is a resource firm that operates in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and globally. The corporation operates in three segments: copper, iron ore, and coal.

On June 12, 2022, BHP Group Limited is anticipated to release financial results. The earnings per share (EPS) forecast for FY2023 was increased by stock experts. 

The mining company’s projected annual earnings per share have increased from its previous estimate of $4.32 to $4.91. The current $5.68 per share consensus estimate for BHP Group’s full-year earnings. 

AutoZone, Inc.

AutoZone, Inc is a retailer and distributor of car parts and accessories. The company sells new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products for cars, sport utility vehicles, vans, and light trucks.

AutoZone, Inc. is slated to disclose earnings before the market opens on December 6, 2022. The report will cover the fiscal quarter that ends in November 2022. 

The consensus EPS expectation for the quarter is $25.15, based on analyst estimates. Last year, the reported EPS for the same quarter was $25.69. 

Ferguson plc

Ferguson plc is a top value-added distributor in North America, offering knowledge, options, and goods for plumbing, appliances, HVAC, fabrication, and other areas as well as infrastructure. On June 12, 2022, before the market opening, Ferguson plc is anticipated to announce earnings. 

The report will cover the accounting quarter that ends in October 2022. Based on analyst projections, the consensus EPS expectation for the quarter is $2.82. For the same quarter the previous year, there was $2.5 in reported EPS.

Caseys General Stores, Inc.

On Friday, December 6, 2022, following market close, Caseys General Stores, Inc. is anticipated to announce earnings. The report will cover the accounting quarter that ends in October 2022. 

According to investment analysts’ predictions, the consensus earnings per share expectation for the quarter is $3.27. During the same period the previous year, the reported EPS was $2.59.

Convenience stores operated by Casey’s Retail Company are found in the Midwest and South of the country. It is the fifth-largest pizza company and third-largest retailer of convenience stores in the country. 

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Reserve Bank Raises Official Cash Rate

After the Reserve Bank of Australia (RBA) increased the cash rate goal by 25 basis points (bps), as expected, to 3.10% from 2.85%, the Australian Dollar gradually started to move higher.

This takes the total amount of monetary policy tightening for this cycle since May to 300 bps. With 16 bps priced in by the futures market, the market was somewhat undetermined going into the meeting. A 25-bps lift was predicted by the majority of responders to a Bloomberg survey.

Some segments of the market were anticipating a likely 15 basis point increase to make the cash rate friendly, around 3.00 percent. The RBA has previously stated that the rate’s roundness is unimportant to them.

Cash Rate Trend

Cash Rate Trend

The domestic context for the bank’s action today is fairly murky as a result of conflicting inflation indicator indications.

The Australian Bureau of Statistics (ABS) released monthly CPI data for the first time last week. Two of these releases will follow the quarterly data. These prints will account for 62–73% of the quarterly weighted basket.

The quarterly statistic will continue to represent the official CPI measurement for the RBA’s target range of 2-3%. The October CPI print from last Wednesday revealed 6.9% year-over-year inflation, significantly less than the 7.6% expected.

This contrasts with the third quarter’s overall inflation reading, which showed an increase in price pressures of 7.3% year over year to the end of October as opposed to the expected 7.0% and 6.1%.

Investors Weigh Economic Data

Most stocks are down on Wall Street in the afternoon session of trading on Monday as investors consider a surprise positive economic report emphasizing the Federal Reserve’s challenging battle against inflation.

As of 2:46 p.m. Eastern, the S&P 500 was down 2.1 percent and heading for its third consecutive loss. The index’s gains from last week have more than been erased by the fall. The Nasdaq composite dropped 2.3 percent, and the Dow Jones Industrial Average lost 563 points, or 1.6 percent, to close at 33,866.

The Federal Open Market Committee (FOMC) meeting on December 14th may be a key influencer on the AUD/USD in the future. In the interim, it seems that market gyrations in a number of markets may be centered on Fed remarks.            

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.