US open Stocks mixed ahead of Powell

US stocks are set for a mixed open after US GDP was downwardly revised and ahead of Fed Powell’s appearance.

USA (2)

US futures

Dow futures +0.03% at 30961

S&P futures -0.05% at 3820

Nasdaq futures -0.17% at 11618

 

In Europe

FTSE -0.16% at 7320

Dax -1.5% at 13034

Euro Stoxx -1% at 3518

 

GDP worse than forecast, Powell next

US stocks are set to open mixed after steep losses in the previous session as the market continues to weigh up growth fears.

Data yesterday showed that consumer confidence fell to a 16-month low as rising prices and recession concerns dampened the outlook for many Americans. The data, plus rising oil prices, unnerved investors sending stocks lower.

Today’s push higher could be limited as several Federal Reserve policymakers show support for steeper rate hikes to bring down inflation. Fears that an aggressive Fed could tip the US into recession have been lingering since the FOMC meeting in June, when the Fed hiked by 75 basis points.

Cleveland Fed President Loretta Mester supported another 75-basis point hike in July. She followed in the footsteps of San Francisco Fed President Mary Daly and NY Fed President Williams, who also backed a 75 basis point hike.

Federal Reserve Chair Jerome Powell is due to speak later today, and investors will listen closely to see whether there are any changes to the Fed’s hawkish stance.

On the data from US GDP, the 3rd estimate was downwardly revised to -1.6% contraction, annualized, down from -1.5%.

 

In corporate news:

Tesla falls pre-market after the EV maker shut down its San Mateo, California office, laying off around 200 employees in a move that is seen as accelerating cost-cutting.

Bed Bath & Beyond fell 13% after posting a larger than expected loss and announcing that CEO Mark Tritton would be leaving.

 

Where next for the Nasdaq?

The Nasdaq failed to retake the multi-month falling trendline resistance and rebounded lower. The fall below the 20 sma and support at 11700 keeps the bears hopeful of further downside, as does the RSI below 50. Sellers will need a move below 11490, the May low, to extend losses towards 11035 the 2022 low. Buyers will look for a move over 12225, the weekly high, to create a higher high and expose the 50 sma at 12315. A move above here opens the door to 12630, the mid-June high.

nasdaq2906fx

  

FX markets – USD rises, GBP falls

USD is edging higher after solid gains in the previous session. Aggressive Fed bets lifted the greenback yesterday. Today treasury yields are moving lower as recession fears rise. However, the USD is finding some safe-haven support ahead of the Policy Panel.

EURUSD is holding steady as the euro finds support from hawkish commentary from ECB policymakers and better-than-expected European economic sentiment. German inflation unexpectedly fell to 7.6% YoY, down from 7.9%; this is unlikely alter the ECB’s decision to hike rates.

GBP/USD is falling for a second straight session and trades at a two-week low in risk-off trade amid rising concerns over the ability of the BoE to raise interest rates much further, given the increasing likelihood of a recession. Brexit concerns add to the downbeat mood toward sterling.

GBP/USD  -0.18% at 1.2237

EUR/USD  -0.07% at 1.0574

 

 

Oil extends gains for the fourth day

Oil prices are rising for a fourth straight day as supply worries overshadowed concerns of a global economic slowdown.

Oil has jumped over 8% across the past few days as the market has become increasingly concerned over tight supplies amid Western sanctions on Russian oil and on reports that Saudi Arabia and UAE, the only suppliers who could potentially make up for lost Russian oil, would, struggle to increase output.

Supply worries outweighed fears of a deteriorating demand outlook in a potential future recession. Not even the risk-off mood and the stronger dollar have prevented oil prices from rising, highlighting the strength of bullish momentum.

WTI crude trades +0.8% at $111.67

Brent trades +0.8% at $114.72

 

Looking ahead

14:30 EIA crude oil stock piles

15:00 ECB Lagarde’s speech

 

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account