US Open: Wall Street Points Lower Ahead of Trump's Trial, Earnings
Fiona Cincotta February 9, 2021 7:56 AM
US futures point to a softer start as investors eye Trump’s impeachment trial, earnings and as oil eases back from a 13 month highs.
- US stimulus progress saw Wall Street hit all time high on Monday
- Trump's impeachment trial to kick off, conviction is expected
- Oil eases back slightly from 13 month high ahead of API data
- Bitcoin hits record high after Tesla buys $1.5 billion in the digital currency
- Earnings due later include Cisco & Twitter after the closing bell
After striking record highs in the previous session US equity markets are consolidating, pointing to a softer start as investors eye Trump’s impeachment trial, earnings and as oil eases back from a 13 month highs.
FTSE +0.05% at 6528
Dax -0.45% at 13994
Euro Stoxx -0.15% at 3658
The S&P closed higher for a sixth straight session on Monday boosted by signs that the Biden administration is moving closer to passing a sizeable covid stimulus package. The House of Democrats released the first draft text for the legislation that will make up the covid stimulus bill.
Trump’s impeachment trial to kick off
Donald Trump’s second impeachment trial opens today, which sees him on charge of inciting last month’s storming of the US Capitol. The trial is the fourth impeachment of a US President and is the first time in history that a President has been impeached twice. Although, there is little risk that Trump will be convicted as 16 GOP Senators would need to support the conviction and this looks highly unlikely.
Given that the GOP has regrouped after initial division following the storming of the Capitol, the main market implication for the trial will perhaps be more on the way the trial is conducted and whether it aids or impedes a bipartisan approach in the coming years.
Oil hovers at 13 month highs ahead of API data
Oil prices are easing back slightly after six straight days of gains and reaching a fresh 13 month high. Brent futures trades -0.2% but remain over $60 the barrel on tightness in the market thanks to the ongoing OPEC production cuts, but also compliance to those cuts. A strike in Libya limiting its export facilities has added to that tightness. Meanwhile on the demand side, falling covid cases and the ramping up of covid vaccination programmes lifted the demand outlook.
API US oil inventory data is due later at 21:30 UTC.
Bitcoin hits record high
Bitcoin has surged to a record high $50,000 after Tesla’s announcement on Monday that it had bought $1.5 billion of the digital currency as a means of diversification. The move boosted the prospects of Bitcoin going mainstream. At the time of writing Bitcoin is up 16% at $46500. Other bullish mood is seeping across other crypto assets with the likes of Litcoin and DogeCoin.
Whilst the US economic calendar is light, the corporate earnings calendar has more to offer with earnings expected from Fidelity, S&P Global, Fox Corp.
After the close earnings from Cisco, Fiserv and Twitter are expected.
Twitter what to expect from Q4 earnings?
Twitter has infamously struggled with monetizing its user base. In Q3 Twitter reported $936 million a 14% rise in revenue yoy with 187 million users which accounted for a 29% increase. These numbers could slip in Q4. Furthermore, the outlook is not as rosy as some other tech firms. After banning Trump’s account following the storming of Capitol Hill, Twitter purged many accounts, many other left and companies also pulled their add spend. EPS is expected at $0.30 which could be considered optimistic after $0.19 in Q3.
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.