Dow futures -0.5% at 34758
S&P futures -0.4% at 4360
Nasdaq futures -0.01% at 14900
FTSE -0.93% at 7033
Dax -1% at 15624
Euro Stoxx -0.95% at 4060
Stocks roll off record highs
US futures were pointing to a broadly lower start after data revealed a slowdown in growth in China and as continue to weigh up Federal Reserve Chair Jerome Powell’s dovish stance even as inflation is surging and other central bank’s globally were turning more hawkish.
China’s GDP grew 7.9% in Q2 largely inline with forecasts. However, this was down considerably from 18.3% in the previous quarter suggesting that growth was slowing and that the V-shaped recovery was over in the world’s second largest economy.
US jobless claims came in as expected with 360,000 initial claims last week, down from 373k the previous week.
Fed Powell spoke yesterday before Congress saying that the US economic recovery was still a way off from where it needs to be for the Fed to tighten monetary policy. Recently the RBNZ and just today the BoE appear to be adopting a more hawkish stance which raises questions over the Fed’s ability to remain so dovish.
Where next for the s&p500?
The S&P500 refreshed its all time high in the previous session at 4392 and is edging lower today. The MACD formed a bearish cross over yesterday keeping the sellers optimistic. Any move lower would need to break below today’s low and the 50 sma on the 4 hour chart at 4353 in order to test the ascending trendline support at 4342. A break below here could negate the near term up trend and open the door to 4290 the July low. On the flip side should 4353 hold then buyers could look to take 4292 and on to fresh all time highs.
FX – USD eases, GBP shrugs off hawkish comments
The US Dollar is moving higher, rebounding after steep losses in the previous session. Fed Chair Powell battered away expectations of the Fed moving sooner after
GBP/USD – The pound is edging higher but not making impressive headway after UK jobs data. The numbers revealed 365,000 payrolls were added in June by the most since the pandemic began. The unemployment rate ticked up to 4.8% unexpectedly. However, wage growth surges to 7.3% up from 5.7%. The surge in wage growth comes as inflation hit 2.5% in June. BoE policy maker Saunders said that the BoE ay need to step in to curb inflation. Given the hawkish comments the Pound is very muted, most likely on concerns of rising covid cases as Freedom Day approaches.
GBP/USD +0.04% at 1.3860
EUR/USD -0.28% at 1.1809
Oil declines on OPEC progress
Oil prices are declining, extending losses from the previous session after Saudi Arabia and United Arab Emirates came to a compromise over oil supply, paving the way for more oil to enter the market and as investors digested the latest data which showed that demand had slacked off.
The latest EIA crude stock pile data declined again for an eighth straight week. However the overdraw was overshadowed by lagging gasoline demand.
News that more oil will be re-entering the market as fuel demand shows signs of slowing and covid cases rise is proving too much for the oil bulls to swallow today.
Despite the selloff the broader uptrend remains in tact. It would take a move below 7040 for a lower low to form.
US crude trades -0.6% at $71.51
Brent trades -0.53% at $73.24
14:15 US Industrial production
14:30 Fed Chair Powell Speaks