US open: Stocks point to mixed open, banks in focus

US futures trade mixed. The S&P and Nasdaq are easing back after reaching fresh all time highs in the previous session. US consumer confidence up next and banks are in focus after dividend announcements.

USA (2)

US futures

Dow futures +0.27% at 34377

S&P futures +0.02% at 4291

Nasdaq futures -0.2% at 14494

In Europe

FTSE +0.6% at 7110

Dax +1.25% at 15743

Euro Stoxx +0.8% at 4121

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Dow rebounds

US stocks are to a mixed start on a Tuesday. Whilst the S&P and Nasdaq reached fresh record highs in the previous session, the Dow lagged behind its peers. Today the tables have turned and the Dow looks set to reverse yesterday’s losses.

Tech stocks and the Nasdaq surged in the previous session, helped along after a Federal antitrust court case against the social media giant was dismissed.

Stocks are mixed amid fluctuating concerns over the highly infectious Delta covid variant which is unnerving the markets, against upbeat news surrounding the banks. Some countries in Asia are also behind with the vaccine rollout making them even more vulnerable to rising covid cases.

Banks will also be in focus as most US banks announced plans to pay out $2 billion in dividends following the Fed’s stress test results last week.

Looking ahead, consumer confidence could grab the attention of some traders. Morale is expected to tick high after falling unexpectedly in May.

However, trading ranges could be limited as investors focus on Friday’s non-faarm payroll.

Where next for the Dow Jones?

The Dow Jones continues to trade caught between its 50 day ma on offering support at 34200 and a multi month trend line support turned resistance capping gains at 34500. A bullish cross over appears to be forming on the MACD keeping the bulls hopeful. A move above 34500 could see the index aim towards 35000 and the all time high. A move below the 34200 could still prompt dip buying. It would take a move below 33750 to negate the near tem uptrend. Strong support also sits at 33400 the 100 sma.

FX – USD rallies

The US Dollar is charging higher, boosted in part by safe haven flows amid rising covid variant fears.

GBP/USD trades firmly below 1.40 at a weekly low following last week’s dovish BoE and concerns over rising covid cases. The optimism surrounding the final lifting of covid restrictions on July 19th has been overshadowed by steadily rising covid numbers.

EUR/USD is also losing ground owing to the stronger US Dollar despite surging Eurozone economic sentiment. Sentiment came in at 117.9 in June, up from 114.5 and ahead of forecasts of 116.5. Morale is picking up as the economy reopens.

GBP/USD-0.3% at 1.3831

EUR/USD  -0.3% at 1.1888

Oil steady ahead of API data

Oil prices are treading water after retreating in the previous session from recent two and a half year highs.  Concerns over rising covid cases in Asia and the UK and mobility restrictions in Australia sent oil prices over 1.5% lower in the previous session.

Whilst concerns surrounding the new, highly infectious Delta covid variant sparked a selloff there is also an element of investors looking to book some profits ahead of Thursday’s OPEC meeting.

Expectation are growing that OPEC will increase supply from August amid surging demand and limited supply. 500,000 barrels per day additional supply could be coming but given that OPEC expects demand to outstrip supply by the final quarter this should easily be absorbed into the market.

API inventory data is due later today. Another larger than forecast draw on inventory could boost oil prices.

US crude trades +0.3% at $72.88

Brent trades +0.3% at $74.35

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

14:40 ECB President Lagarde Speech

15:00 US Consumer Confidence

21:30 API Weekly Crude Oil Stock

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