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Block Inc (NYSE: SQ), the point-of-sale payment provider formerly known as Square, is reporting its Q4 2022 earnings this Thursday, February 24. 

What to expect with SQ stock earnings report?

The usual market dynamic of ‘good report = stock price rise’ and ‘bad report = stock price fall’ may not be entirely appropriate to expect after the report’s release.

As we have seen over the past month, a favourable earnings report does not necessarily mean that the market will respond favourably in turn. For one, when Nvidia (NASDAQ: NVDA) reported its impressive Q4 2022 results on February 16, its stock proceeded to sell-off. As of writing, NVDA is down 12% since its earnings call as investors were all too happy to overlook its earnings beats and strong guidance for the next quarter.

On the flip side, an unfavourable report can sink SQ stock considerably more than at any time in the past. Investors have little patience for growth tech stocks at the moment, with US Federal Reserve rate hikes just around the corner and post-covid revenue surges seemingly coming to an end.

Will SQ suffer a similar fate to PYPL?

PayPal (NASDAQ: PYPL), a leading competitor of Block, reported its own Q4 2021 earnings report three weeks ago, on the first day in February this year. While PYPL beat earnings expectations, its dismal guidance for Q1 2022 has helped tank the stock price 46% in 2022, YTD. 

As of writing, SQ is not far off PYPL’s shocking price retreat. SQ’s stock price has lost 40% of its value, YTD. 

An unfavourable report may push this loss into the 50s or even the 60s. Tech stocks dropping more than 20% in a single trading day is not unheard of this year, as you may have seen Meta Platforms (NASDAQ: FB) trim 25% (USD 230 billion) from its market cap on February 3.

Is there a buying opportunity with SQ stock?

According to several investment banks and analysts, including Deutsche Bank, Credit Suisse, SeekingAlpa and MarketBeat, an even greater rout in the SQ’s share price may set investors up for a great long-term buying opportunity. SeekingAlpha and MarketBeat have price targets in the mid USD 200 range, which represent substantial upside potential.

Sign up today to trade SQ stock with BlackBull Markets

 

Russian de-escalation sharply moving markets

Several equities have reacted sharply over Tuesday trading to the suggestion that Russia is de-escalating its presence on the Russia/Ukraine border.

As reported by Reuters, Russia has begun to move an undisclosed number of its troops away from the Ukrainian border after completing mock defence exercises. Even so, tensions have not entirely dissipated. NATO, US, and UK officials remain cautious of the situation, with Boris Johnson noting that "the intelligence that we're seeing today is still not encouraging".

The markets have been more eager to embrace talk of de-escalation.

European Equities spent Tuesday rebounding sharply. The STOXX Europe 600, which is comprised of 600 stocks across 17 European exchanges, broke a three-day losing streak and rose 1.43%.

On an individual bourse level, the Italian stock market Index, the IT40, led the way back into positive territory, up 2.17% over the trading day. The German (DAX30) and French (CAC40) indices followed closely, each climbing ~1.9%, and the UK's FTSE100 climbed up 0.98%.

US stocks reacted in a similar manner when they opened a few hours after Europe. The US market has recently closed where the NASDAQ rose 2.24%, the S&P500 rose 1.36%, and the Dow Jones rose 1.06%.

Commodities also make significant moves on news that Russia is de-escalating.

Naturally, commodities would be significantly affected by a war between Russia and Ukraine and NATO affiliated nations that have reacted the sharpest.

WTI and Brent have pulled back a shocking 3.7% and 3.4%, respectively. On Monday, Brent oil prices were pushing their way up to USD 100 per barrel after crossing USD 95 per barrel. Before the turnaround in the oil price, talk of USD 110 per barrel was beginning to filter into market predictions.

Russia and Ukraine are two of the largest exporters of Wheat. As such, supply concerns for the soft commodity have eased slightly, and with it, the price has pulled back from its two week high. Wheat is now trading down 2.63% to USD 7.8 per bushel. Low supplies could temper more downside for Wheat in Canada and the US.

Other major exports of the region are trading down on the easing tensions. Corn, Iron Ore, and Soybean are all trading down 2.86%, 1.37%, and 1.27%, respectively.

To trade WTI, Brent, and US Dollar vs Russian Rouble, we welcome you to sign up today.