US open: Wall Street set to rise as upbeat earnings overshadow rising covid cases
Fiona Cincotta August 3, 2021 9:24 AM
Wall Street is set to open higher as upbeat earnings overshadow rising covid cases. Factory orders & API crude stock piles in focus.
Dow futures +0.2% at 34919
S&P futures +0.15% at 4396
Nasdaq futures +0.15% at 14986
FTSE +0.16% at 7093
Dax +0.15% at 15553
Euro Stoxx +0.01% at 4115
Earnings, Tencent & Factory Orders in focus
US stocks are pointing to a stronger start as investors digest corporate earnings, slowing economic growth and rising covid cases.
Q2 earnings season has been encouraging. According to Refintiv over 88% of corporate reports beat forecasts, this is the highest level since records began in 1994. More earnings are due with Eli Lilly, Lyft and Marriott International all due to report today.
Earnings aside, Chinese gaming firm Tencent is likely to be under the spotlight after Chinese regulators criticized the videogaming firms raising concerns that the gaming sector could be next on regulators hit list.
Separately covid cases are on the rise with 72,000 new cases a day, up 44% over the previous week. Furthermore, economic growth is showing signs of slowing. The manufacturing PMI slowed in July. Factory orders are due to be released shortly, these are also expected to show a slowdown to 1% growth in June, down from 1.7% in May.
Where next for the S&P?
The S&P continues to trade in a multi-month ascending channel hovering around all time highs. It trades around the midpoint of the ascending channel. However, it is worth noting the RSI bearish divergence which could be a signal that momentum is wearing thin. It would take a move below 4280 the lower band of the ascending trendline to negate the near-term uptrend.
FX – USD subdued, antipodean’s in favour
The US Dollar is subdued on Tuesday. Declining treasury yields suggest that fears of disappointing economic growth are dominating. Manufacturing PMI showed hat activity slowed in July for a second straight month.
Antipodean currencies are in favour boosted by central bank talk. The Aussie Dollar and the New Zealand Dollar are the biggest gainers among G10 currencies. The RBA stuck with its plan to taper the bond buying programme, shrugging off any concerns stemming from the latest covid wave.
AUD/USD +0.3% at 7379
GBP/USD +0.29% at 1.3925
EUR/USD +0.12% at 1.1885
Oil consolidates after worst daily losses in 2 weeks
Oil prices are consolidating after steep losses in the previous session. Oil fell over 3% amid growing concerns over the slowing pace of growth in two key markets – China and the US. Factory activity came in weaker than expected with Chinese manufacturing printing at 50.3, less than the 51 forecast.
Covid cases are also on the rise in China with tougher restrictions being imposed. This is unnerving the oil market given that China is the second largest oil importer.
However, investors are betting on a further fall in inventories with API data due later today. This would mark the third straight week of declines in crude stock piles.
US crude trades +0.15% at $71.09
Brent trades +0.23% at $73.00
14:45 US Factory Orders
21:30 API Crude Oil Stockpile
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
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.