US open: Stocks edge higher, Peloton jumps

US futures

Dow futures +0.15% at 35150

S&P futures +0.27% at 4510

Nasdaq futures +0.4% at 14750

In Europe

FTSE +0.6% at 7560

Dax +0.45% at 15167

Euro Stoxx +0.4% at 4104

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Stocks move cautiously higher

US stocks are set for a stronger open after a mixed close on Friday as investors look ahead to inflation data later this week and as earnings season continues.

UK stocks booked gains across last week, thanks in part to upbeat earnings and a stellar US jobs report. The NFP report showed that over 900k jobs were created across December and January, soothing fears of an Omicron hit to the labour market. However, wages rose 5.7% fuelling runaway inflation concerns.

US CPI data is due later this week and is expected to show that inflation continued rising to 7.3% YoY with core CPI rising to 5.9%.

With a quiet economic calendar today, earnings will be in focus with numbers from Tyson Foods, Loews and Hasbro.

In other corporate news:

Peloton is trading 33% higher pre-market on reports that Amazon and Nike are interested in the troubled fitness equipment maker. Peloton’s sales had surged through the pandemic. However, as gyms re-opened and following a series of PR disasters the firms value dropped by around a fifth from $48 billion to just $8 billion.

Peloton is looking attractive to the likes of Amazon, Nike and Disney and Sony – companies which are looking to expand their presence in the home, health and wellness space.

Where next for the Nasdaq?

The Nasdaq extended its recovery from 13725 before running into resistance at the falling trendline 15250 and falling lower. 14375 the October low offered support, and the hammer candle stick pattern, if confirmed, could indicate a reversal higher back towards the falling trend line at 15020. Meanwhile sellers will be looking for a move below 14375 for further losses towards 13725.

FX markets extends losses, AUD rallies

The USD is inching lower, extending a heavy 1.8% selloff from the previous week. The greenback has been easing lower after Fed policy makers soothed fears of an overly aggressive Fed last week. Not even a stellar jobs report and surging wages have managed to inspire USD bulls.

AUD/USD is outperforming following strong Australian retail sales. Sales jumped a record 8.1% QoQ in Q4, indicating that consumer spending was strong which bodes well for economic growth in the final quarter. Hope of Chinese economic stimulus also lifted the aussie after Chinese service sector PMI dropped to its lowest level since August

GBP/USD -0.07% at 1.3516

EUR/USD +0.04% at 1.1457

Oil eases from 7 year high on US – Iran progress

Oil prices gained for a seventh consecutive week last week. However, oil is easing off 7-year highs on signs of progress in Iran – US nuclear talks, which could pave the way for the lifting of US sanctions on Iranian oil sales.

The removal of current sanctions could help ease tight supply issues which have dominated the oil market for weeks. Whilst OPEC+ has increased its output quota, this failed to ease supply concerns as the market doubts whether the new quotas can even be reached given months of missing supply targets.

Whilst Iran could help ease the current supply issues, this wouldn’t be an overnight solution. There could well still be more distance to run with talks.

On the other side of the world, eastern European tensions remain elevated with THE White House national security advisor waning that Russia could invade Ukraine within days but could still opt for the diplomatic route.

WTI crude trades -0.8% at $90.45

Brent trades -0.4% at $92.55

Learn more about trading oil here.

Looking ahead

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