US open: Stocks point to mixed open, jobless claims impress

US futures

Dow futures +0.3% at 34112

S&P futures +0.03% at 4510

Nasdaq futures -0.4% at 15816

In Europe

FTSE -1.18% at 7084

Dax -1.8% at 15180

Euro Stoxx -2.20% at 4091

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Nasdaq underperforms, Apple drops

US stocks are set for a mixed open with the Dow and the S&P pushing higher, after upbeat jobless claims. Meanwhile the Nasdaq is set to be weighed down by a sharp selloff in Apple.

The number of Americans filing for unemployment benefit rise by a less than expected 222k. This comes after last week’s initial claims fell to 199k, the lowest level since 1969. An upward revision was expected on seasonality quirks. Even so, the upward revision was less than forecast, boding well for NFP’s tomorrow. The data suggests that the US labour market recovery is on the right track, which is just as well given the Fed’s hawkish shift this week.

This change in stance from the Fed came as the outlook for the US economy clouds amid the discovery of Omicron. Yesterday the first Omicron case was identified in the US  raising fears that it could quickly spread.

Oil stocks are likely to trade sharply lower after OPEC+ appears ready to press ahead with planned output increases.

Corporate news

Apple is set to open over 3.5% lower after reports that Apple has warned suppliers that demand for iPhones is slowing as the holiday season approaches. Apple had already cut its iPhone 13 production target for this year by over 10 million units owing to a lack of parts.

Where next for the Nasdaq?

The Nasdaq is pushing lower, testing support at yesterday’s low. A break below here exposes the September high at 15700 and the 50 sma at 15640. A break below here negates the near recent run higher and could see sellers gain traction towards 15000 round number. Any meaningful recovery needs to retake 16000 round number and 16450 last week’s high.

FX – USD falls, EUR rises after PPI soars

The USD is falling lower after Omicron arrived US. Whilst US data has been upbeat sand the Fed has adopted a hawkish tone the greenback has failed to really capitalize on either of these.

EUR/USD is moving higher after PPI data showed that inflation surged in October to 21.9% up from 16.1% in September. The jump in PPI inflation, which is often a precursor for CPI, suggests that consumer prices won’t be cooling anytime soon.

 

Oil tumbles as OPEC+ to press ahead with planned increase

Oil prices have tanked lower on reports that OPEC+ will press ahead with planned production increases agreed in July, despite the discovery of Omicron which is clouding the oil demand outlook. It remains unclear whether the new strain of covid can evade vaccines. In the case that it does, more lockdown restrictions could be needed which would hit demand hard. The agreed plan was for an additional 400,000 barrels per day.

The decisions comes as a surprise which explains the huge drop in the price oi oil. Expectation were for OPEC+ to hold back on the increase or at least raise by a smaller amount. 

The decision comes after the US and other countries agreed to release emergency oil reserves to bring the price of oil lower. Maybe that won't be necessary now!

WTI crude trades -2.4% at $63.74

Brent trades -2.7% at $66.92

Learn more about trading oil here.

 

Looking ahead

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