US open: Stocks point higher, Disney disappoints

US futures

Dow futures +0.11% at 36123

S&P futures +0.37% at 4664

Nasdaq futures +0.67% at 16092

In Europe

FTSE +0.63% at 7362

Dax +0.11% at 16082

Euro Stoxx -0.01% at 4349

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Inflation inspired sell off steadies

US stocks are pushing higher, paring some of yesterday’s steep losses. The Nasdaq is set to open higher than its Wall Street peers after closing 1.6% lower in the wake of yesterday’s 30 year high inflation print.

All three major indices closed lower on fears that the surge in inflation could prompt the Fed to move sooner to raise interest rates. Activity could be muted today given that the bond market is closed for Veterans Day.

After yesterday’s drama, earnings are back in focus. Disney is expected to slump 5% on the open, after a disappointing increase in Disney+ subscriptions. The video streaming business saw the smallest increase in subscriptions since launching. The theme park division also fell well short of forecasts.

Rivian is also likely to remain well under the spotlight in its second day of trading. The EV maker gained 29% on its debut, with the company valuation topping $100 billion, marking the largest IPO in America since Alibaba in 2014.

Tesla, has been in the headlines all week and today’s looks set to be no different. SEC fillings show that Elon Musk sold 4.5 million shares over three days. This was actually around a third of the stake that he had suggested he would sell on Sunday.

Where next for Dow Jones?

After reaching its all time high of 36560 at the start of the week, the Dow Jones has been easing lower, slipping through the 50sma to a low of 36008. The price is attempting to rebound from this low and is testing the 50 sma resistance on the 4 hour chart at 36150. Any recovery would need to retake this level in order to look back towards the all time high. Rejection at the 50 sma could see the price head towards the 100 sma. It would take a move below here to negate the near term uptrend and a move below 35500 for sellers to take control.

 

FX – USD at 16 month high

US Dollar is surging higher trading at a 16-month high following the inflation data. The pressure is on the Fed to act and yesterday’s data reinforced expectations that the Fed will move to hike rates next year.

GBP/USD is struggling around 1.34 a yearly low after UK GDP data revealed that economic growth slowed by more than anticipated in the third quarter. Q3 GDP was 1.3% QoQ, down from 5.5% in Q2 and missing forecasts of 1.5%.

 

Oil extends selloff on supply concerns

Oil prices are heading lower again, extending losses from the previous session. EIA inventory data revealed an unexpected build in crude stockpiles.

Adding to pressure to oil prices, President Biden has asked advisors to look into ways to reduce energy prices, such as releasing strategic reserves. Yesterday’s surge in inflation could prompt the US to take more action to pull oil prices lower and lower prices at the pumps.

OPEC is due to release its forecasts for global supply and demand this month.

WTI crude trades -0.8% at $79.50

Brent trades -0.7% at $81.50

 

Looking ahead

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