US open: stocks set to retreat as WHO warns on covid numbers
Fiona Cincotta March 2, 2021 8:51 AM
After the S&P enjoyed its best one day rally in 9 months on Monday, the bulls are pausing for breath. WHO warns on covid numbers rising & China warns on bubbles. Zoom & Target in focus.
Dow futures -0.2% at 31450
S&P futures -0.3% at 3889
Nasdaq futures -0.1% at 13268
FTSE +0.5% at 6620
Dax +0.4% at 14070
Euro Stoxx +0.3% at 3719
WHO warns that covid cases rose
The World Health Organisation warned that new covid cases rose for the first time last week in 7 weeks. Cases rose in 4 or the WHO’s 6 regions. Despite recent encouraging developments on vaccine rollouts the WHO’s warning is a reminder that covid remains a clear risk.
The numbers come as parts of the US have started to ease restrictions and as the vaccine rollout is expected to pick up after the approval of the single shot Johnson & Johnson vaccine.
In Germany, non- essential shops could be reopened soon in areas where there is a low infection rate. German retail sales were dismal with sales dropping 4.5% MoM after declining -9.1% MoM in December.
The WHO added that it was premature to believe that the Covid health crisis would end this year which is keeping risk sentiment in check.
China regulator warns of bubble
China’s banking regulator warned over the risk of bubbles forming in foreign markets whilst also raising concerns over the Chinese housing sector. His comments sent Chinese stocks lower and dented sentiment on the open in Europe. The fact that markets are moving in an opposite direction to the underlying economies isn’t anything new. However it was enough to take the shine off stocks.
Stocks set to open mildly lower
The S&P 500 enjoyed its best session in 9 months on Monday boosted by JNJ vaccine & stimulus developments. However, the bulls are pausing for breath indicating mild losses on the open.
Retailers will be in focus as earning season continues. Nordstrom, Kohl and Target have reported earnings.
Target gains 0.2% pre-market after reporting a 21% jump in sales in the holiday quarter, signifycantly higher than forecast. The jump in sales came as same day delivery and in store collection services helped fulfill robust demand. Target has regularly outperformed Wall Street expectations thanks to its early focus on its digital offering.
Zoom rises pre-market after beating forecasts
Zoom trade +7% pre-market after posting impressive earnings after the close on Monday and issuing a strong guidance. Zoom achieved EPS $1.22 vs $0.79c expected. Revenue $882.5 million vs 811.8 million expected. Margins improved and Zoom lost fewer customers than it had expected. Zoom sees 42% revenue growth in the year ahead even as life return to sone form of pre-pandemic normalcy.
FX – EUR depressed as German retail sales plunge & inflation misses.
The US Dollar is extending 0.6% gains from the previous week. US Dollar Index DXY +0.15% holding above 91.00.
EUR/USD – trades under pressure owing to dismal German retail sales and softer inflation numbers. Eurozone CPI printed at 0.9% YoY in February missing 1% forecast and a significant distance from the ECB’s 2% target. Core inflation also drifted lower to 1.1%, down from 1.4% in January.
Analyst Fiona Cincotta looks at EUR/USD price action and levels to watch.
GBP/USD trades -0.10% at 1.3910
EUR/USD trades -0.2% at 1.2025
Oil resumes uptrend
After dropping almost 3% in the previous session Oil prices continue to fall lower, although have picked up off daily lows. Both Brent and WTI crude oil rebounded off session lows after data revealed that output from both OPEC & Russia declined in February.
The update comes ahead of the OPEC+ meeting on Thursday where the group is expected to ease output cuts potentially by as much as 1.5 million barrels per day. The group had cut output by 7 million bdp which is around 7% of global output.
Attention first turn to API inventory data later.
US crude trades -0.05% at $60.20
Brent trades -0.02% at $63.70
18:00 Fed Brainard speech
21:30 API weekly crude oil stocks
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.