Dow futures +0.28% at 33150
S&P futures +0.53% at 4013
Nasdaq futures +0.92% at 12193
FTSE +0.12% at 7920
Dax +0.65% at 15480
Q4 GDP & jobless claims due
US stocks are pointing to a stronger start, with the Nasdaq leading the way thanks to strong earnings from Nvidia and as investors look ahead to the release of the latest reading for Q4 GDP.
Investors also continue digesting the minutes from the February FOMC meeting, which showed that policymakers agreed that more hikes were necessary in order to tame inflation. While they agreed on the smaller rate hike, it is worth noting that the meeting was before January’s blowout jobs report and stronger than forecast retail and inflation data.
Recent data points to the US economy holding up well, which would support a more hawkish stance from the Fed. With this in mind investors will be watching the release of Q4 GDP data closely. Expectations of four a 2.9% annualized increase QoQ, down from 3.2% in Q3. Stronger than expected growth could prompt bets of the Fed acting more aggressively to fight inflation and pull stocks lower.
Also helping the market mood has been broadly encouraging corporate results from tech stocks Nvidia and Etsy, which offset weakness in Lucid and eBay.
Nvidia rises 7% pre-market after bullish guidance from the chip maker raises optimism that there are better times ahead for chip makers and amid speculation that artificial intelligence is the next hot ticket.
Alibaba jumps on an earnings beat, with the Chinese e-commerce firm reporting adjusted earnings per ADR of CNY 19.26, well above forecasts of 16.63. Revenue also beat forecasts, rising 2.1%. Expectations of a continued recovery in consumer sentiment is expected going forwards.
Where next for the Dow Jones?
The Dow Jones has broken out to the downside of a symmetrical triangle, taking out the 50 sma, which had offered support across the start of the month, before finding support on the 100 sma at 32950. Here the bears have paused for breath, but the RSI below 50 keeps sellers optimistic for further downside. A break below the 100 sma at is needed to extend the downtrend towards 32500, the December low. Should the 100 sma hold, buyers could look for a rise above 33500 to extend the recovery towards 34500, the February high.
FX markets – USD rises, GBP, EUR hold steady
The USD is rising for a third straight day as investors continue digesting the minutes from the February FOMC meeting, which supported the idea that interest rates would be higher for longer.
EUR/USD is holding steady after three days of losses as investors weigh up the latest inflation data from the region. Core inflation was upwardly revised to 5.3%, up from the preliminary reading of 5.2%. Headline inflation was confirmed at 8.6%. This, combined with strong recent data suggesting that the eurozone could avoid a recession, support near term policy the ECB’s near term policy stance.
GBP/USD is holding steady in quiet trade as the pound lacks direction amid the absence of fundamental drivers. Brexit concerns continue to play out in the background as the government tries to secure new terms for the Northern Ireland protocol. Separately the BoE’s Catherine Mann warned that businesses running who increase wages 6 to 7% in order to retain staff.
EUR/USD -0.01% at 1.0607
GBP/USD -0.08% at 1.2030
Oil rises but caution prevails ahead of stockpile data
Oil prices are rising, rebounding after 3% losses in the previous session. Fears of higher interest rates slowing economic growth and hurting the oil demand outlook pulled prices lower yesterday, along with an unexpected rise in US inventories.
Those demand concerns are already playing out, with inventories in the US rising by 9.9 million barrels, according to the API. Furthermore, Russia indicating it will cut supply further in March in order to boost prices is also supporting the price.
Today, oil, along with risk assets, is finding support from an improved market mood. However, the release of EIA inventory data could quickly reverse today’s rise. US oil inventories have risen every week since mid-December and are expected to rise again by 2.1 million barrels, according to the EIA.
WTI crude trades +1% at $74.86
Brent trades at +1.1% at $81.30
15:30 EIA oil inventories