US open: Stocks rise as Meta impresses
Stocks rise with earnings in focus and despite GDP Q1 surprise contraction.
Share this:
US futures
Dow futures +0.8 % at 33450
S&P futures +1.42% at 4243
Nasdaq futures +1.9% at 13240
In Europe
FTSE +0.6% at 7437
Dax +1.8% at 14020
Euro Stoxx +0.24% at 3730
Learn more about trading indices
GDP contracts
US stocks are set to jump higher on the open with the Nasdaq outperforming its peers following an encouraging update from Facebook owner Meta, which is overshadowing weaker than forecast GDP data.
The US economy contracted by -1.4% Q1 on an annualized basis, this was down from the 6.9% recorded at the end of last year and below the 1.1% growth forecast. This eas the first contraction since 2020 amid a widening trade deficit and lower government spending. The markets have barely treated and that’s because the consumer side to the economy is still holding up well, with solid household demand and business investment.
In corporate news:
Meta is trading firmly higher pre-market after calming market fears and returning to user growth. The stock trades over 15% higher, despite posting its slowest revenue growth in over a decade.
Heading into earnings season the market seemed particularly nervous about how companies would hold up, and broadly speaking the numbers have been broadly speak encouraging. The market seemed to be bracing itself for some really disappointing numbers from Meta, sending the stock down some 48% from the start of the year. The relief that this appears to be more of a bump in the road rather than the start of a worrying new trend has lifted the stock 17% pre-market.
More news on the stocks to watch
Where next for the Nasdaq?
The Nasdaq ran into resistance at the 100 sma before rebounding lower. The break below the 50 sma combined with the bearish RSI are keeping sellers optimistic of further downside. The price found support at 12800 and has since moved higher, but sellers will be looking for a move below support at 13000 ahead of 12800. A break below this level will create a lower low and could see sellers gain momentum. On the flipside, buyers will be looking for a move over 13750 to expose the 50 sma at 14050.
FX markets USD rises, and EUR falls to a five-year low.
USD is extending gains, with USD bulls showing few signs of slowing, The US Dollar index rose to a 5 year high, boosted by a combination of safe haven flows and higher interest rate expectations.
GBP/USD has fallen below 1.25 to a fresh 18 month low on US dollar strength and amid concerns over the outlook for the UK economy. Company insolvencies in the UK hit a 10 year high in Q1 as COVID support was withdrawn.
EUR/USD is extending losses for a sixth straight session amid the escalation of Russian- EU energy crisis. Higher energy prices come after Germany slashes it growth outlook, fearing the cost of living crisis could spark a recession. German inflation shows no signs of slowing, rising to a record 7.4% YoY in April.
GBP/USD -0.9% at 1.2435
EUR/USD -0.6% at 1.0493
Oil remains steady for another session
Oil prices are holding steady for a second straight session as investors continue to weigh up both supply and demand concerns. Whilst concerns over Russian supply are keeping the bulls engaged, fears over further lockdowns in China and the impact on the demand outlook mean sellers are offsetting buyers right now.
It would take a move by the EU to restrict Russian oil imports to really drive prices higher again. After the ramping up of tensions between Russia and the EU this week, that timeline could have been moved forward.
Data released yesterday revealed that crude oil stock piles rose by 692,000 barrels per week, below forecasts but inventories for jet fuel smf diesel fell to the lowest level since May 2008.
Looking ahead, OPEC meet next week. However, the group is not expected to raise output at a faster pace than that already agreed. The groups consider the shortage of oil supply to be a geopolitical issue rather than a supply issue.
WTI crude trades -0.3% at $101.20
Brent trades -0.4% at $104.52
Learn more about trading oil here.
Looking ahead
N/A
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index 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.
US futures
Dow futures +0.8 % at 33450
S&P futures +1.42% at 4243
Nasdaq futures +1.9% at 13240
In Europe
FTSE +0.6% at 7437
Dax +1.8% at 14020
Euro Stoxx +0.24% at 3730
GDP contracts
US stocks are set to jump higher on the open with the Nasdaq outperforming its peers following an encouraging update from Facebook owner Meta, which is overshadowing weaker than forecast GDP data.
The US economy contracted by -1.4% Q1 on an annualized basis, this was down from the 6.9% recorded at the end of last year and below the 1.1% growth forecast. This eas the first contraction since 2020 amid a widening trade deficit and lower government spending. The markets have barely treated and that’s because the consumer side to the economy is still holding up well, with solid household demand and business investment.
In corporate news:
Meta is trading firmly higher pre-market after calming market fears and returning to user growth. The stock trades over 15% higher, despite posting its slowest revenue growth in over a decade.
Heading into earnings season the market seemed particularly nervous about how companies would hold up, and broadly speaking the numbers have been broadly speak encouraging. The market seemed to be bracing itself for some really disappointing numbers from Meta, sending the stock down some 48% from the start of the year. The relief that this appears to be more of a bump in the road rather than the start of a worrying new trend has lifted the stock 17% pre-market.
More news on the stocks to watch
Where next for the Nasdaq?
The Nasdaq ran into resistance at the 100 sma before rebounding lower. The break below the 50 sma combined with the bearish RSI are keeping sellers optimistic of further downside. The price found support at 12800 and has since moved higher, but sellers will be looking for a move below support at 13000 ahead of 12800. A break below this level will create a lower low and could see sellers gain momentum. On the flipside, buyers will be looking for a move over 13750 to expose the 50 sma at 14050.
FX markets USD rises, and EUR falls to a five-year low.
USD is extending gains, with USD bulls showing few signs of slowing, The US Dollar index rose to a 5 year high, boosted by a combination of safe haven flows and higher interest rate expectations.
GBP/USD has fallen below 1.25 to a fresh 18 month low on US dollar strength and amid concerns over the outlook for the UK economy. Company insolvencies in the UK hit a 10 year high in Q1 as COVID support was withdrawn.
EUR/USD is extending losses for a sixth straight session amid the escalation of Russian- EU energy crisis. Higher energy prices come after Germany slashes it growth outlook, fearing the cost of living crisis could spark a recession. German inflation shows no signs of slowing, rising to a record 7.4% YoY in April.
GBP/USD -0.9% at 1.2435
EUR/USD -0.6% at 1.0493
Oil remains steady for another session
Oil prices are holding steady for a second straight session as investors continue to weigh up both supply and demand concerns. Whilst concerns over Russian supply are keeping the bulls engaged, fears over further lockdowns in China and the impact on the demand outlook mean sellers are offsetting buyers right now.
It would take a move by the EU to restrict Russian oil imports to really drive prices higher again. After the ramping up of tensions between Russia and the EU this week, that timeline could have been moved forward.
Data released yesterday revealed that crude oil stock piles rose by 692,000 barrels per week, below forecasts but inventories for jet fuel smf diesel fell to the lowest level since May 2008.
Looking ahead, OPEC meet next week. However, the group is not expected to raise output at a faster pace than that already agreed. The groups consider the shortage of oil supply to be a geopolitical issue rather than a supply issue.
WTI crude trades -0.3% at $101.20
Brent trades -0.4% at $104.52
Looking ahead
N/A
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
AUD/USD outlook: Aussie slips despite hawkish RBA ahead of key data
The AUD/USD was unable to benefit from the Reserve Bank of Australia’s 25-basis-point rate hike overnight. The RBA lifted the cash rate to 4.60%, in line with expectations. However, the Australian dollar weakened following the decision, with much of the Bank’s hawkish stance seemingly priced in ahead of the announcement. The US dollar has also remained largely supported following the recent turmoil in the bond markets.
RBA delivers 25bp hike, Bullock now the main event
The RBA delivered the expected 25bp hike, but Bullock’s press conference now looms as the bigger volatility risk for AUD/USD and the ASX 200.
Gold outlook: XAU/USD hammered, stretched and vulnerable to a sharp rebound
Gold is getting hammered for solid fundamental reasons, but history suggests extreme four-hourly oversold conditions can produce violent countertrend rallies.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.