US open: Futures mixed in cautious trade, ISM services data in focus

US stocks are pointing to a cautious start to trade after the extended 4th July weekend. Rising oil prices threaten to undermine the global economic recovery. Nasdaq trades at record high. ISM services PMI in focus.

USA (2)

US futures

Dow futures -0.27% at 34750

S&P futures -0.02% at 4348

Nasdaq futures +0.2% at 14740

In Europe

FTSE -0.18% at 7150

Dax -0.4% at 15606

Euro Stoxx -0.28% at 4078

Nasdaq hits fresh record high

US stocks are pointing to a mixed start after the holiday lengthened weekend. Cautious trade dominates after the OPEC+ group failed to agree to curb output cuts, sending oil prices to almost three year highs. Rising oil prices are positive for oil majors. However, the good news stops there. Rising oil prices add to lingering concerns over rising inflationary pressures and could undermine the global economic recovery.

Tech stocks are firmly in favour with the Nasdaq hitting fresh all-time highs. Meanwhile the Dow is edging lower as investors ditch value stocks reflecting concerns over the economic recovery.

Attention will now turn to the ISM services PMI, which is expected to show a slight dip lower in June to 63.5, down from 64. This would still be a very robust number. The employment subcomponent is expected to rise, whilst prices paid are due to ease slightly to 79.3 down from 80.6 in May.

Where next for the Nasdaq?

The Nasdaq continues to trade within its ascending channel dating back to mid-May. The index charged through previous resistance at 14050 the all time high reached in April with buyers looking to target 15000 the key psychological level. The RSI has moved into overbought territory suggesting the price could be vulnerable to a pull back. It would take a move below 14050 to negate the near-term uptrend.

FX – Euro trades lower on mixed data

The US Dollar is charging higher, paring some losses from Friday following the NFP numbers on safe haven flows. Attention will turn to the ISM services data, ahead of tomorrow’s release of the minutes from the latest FOMC meeting.

EUR/USD trades lower after a mixed bag of data. Whilst Eurozone retail sales numbers were better than expected, the good news stopped there. German factory order unexpectedly declined in May by -3.7%, down from -0.2% in April and well below the 5% rebound expected. German ZEW economic sentiment also fell by more than forecast to 63.3 in July, down from 79.8 in June and short of the 75.4 forecast. The data comes following impressive PMI numbers on Monday.

GBP/USD  +0.07% at 1.3850

EUR/USD  -0.31% at 1.1846


Oil surges as OPEC+ talks collapse

Oil prices trads around 3-year highs after the OPEC+ group failed to agree to increase oil production. After 3 days of intense talks, the group abandoned the meeting meaning that the expected increase in oil output won’t be happening as expected.

The oil market remains tight. Demand is rising as economies reopen but supply remains limited by OPEC+. Inventories are being drained and the situation is only expected to worsen as demand picks up further across the summer months. As a result, oil prices jumped higher. WTI crude hit a high of $77 whilst Brent hit $77.80.

US crude trades +1.4% at $76.22

Brent trades 0.0% at $77.17


Looking ahead

14:45 US Markit Services PMI (June)

15:00 ISM Services PMI



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