Dow futures +0.03% at 30961
S&P futures -0.05% at 3820
Nasdaq futures -0.17% at 11618
FTSE -0.16% at 7320
Dax -1.5% at 13034
Euro Stoxx -1% at 3518
GDP worse than forecast, Powell next
US stocks are set to open mixed after steep losses in the previous session as the market continues to weigh up growth fears.
Data yesterday showed that consumer confidence fell to a 16-month low as rising prices and recession concerns dampened the outlook for many Americans. The data, plus rising oil prices, unnerved investors sending stocks lower.
Today’s push higher could be limited as several Federal Reserve policymakers show support for steeper rate hikes to bring down inflation. Fears that an aggressive Fed could tip the US into recession have been lingering since the FOMC meeting in June, when the Fed hiked by 75 basis points.
Cleveland Fed President Loretta Mester supported another 75-basis point hike in July. She followed in the footsteps of San Francisco Fed President Mary Daly and NY Fed President Williams, who also backed a 75 basis point hike.
Federal Reserve Chair Jerome Powell is due to speak later today, and investors will listen closely to see whether there are any changes to the Fed’s hawkish stance.
On the data from US GDP, the 3rd estimate was downwardly revised to -1.6% contraction, annualized, down from -1.5%.
In corporate news:
Tesla falls pre-market after the EV maker shut down its San Mateo, California office, laying off around 200 employees in a move that is seen as accelerating cost-cutting.
Bed Bath & Beyond fell 13% after posting a larger than expected loss and announcing that CEO Mark Tritton would be leaving.
Where next for the Nasdaq?
The Nasdaq failed to retake the multi-month falling trendline resistance and rebounded lower. The fall below the 20 sma and support at 11700 keeps the bears hopeful of further downside, as does the RSI below 50. Sellers will need a move below 11490, the May low, to extend losses towards 11035 the 2022 low. Buyers will look for a move over 12225, the weekly high, to create a higher high and expose the 50 sma at 12315. A move above here opens the door to 12630, the mid-June high.
FX markets – USD rises, GBP falls
USD is edging higher after solid gains in the previous session. Aggressive Fed bets lifted the greenback yesterday. Today treasury yields are moving lower as recession fears rise. However, the USD is finding some safe-haven support ahead of the Policy Panel.
EURUSD is holding steady as the euro finds support from hawkish commentary from ECB policymakers and better-than-expected European economic sentiment. German inflation unexpectedly fell to 7.6% YoY, down from 7.9%; this is unlikely alter the ECB’s decision to hike rates.
GBP/USD is falling for a second straight session and trades at a two-week low in risk-off trade amid rising concerns over the ability of the BoE to raise interest rates much further, given the increasing likelihood of a recession. Brexit concerns add to the downbeat mood toward sterling.
GBP/USD -0.18% at 1.2237
EUR/USD -0.07% at 1.0574
Oil extends gains for the fourth day
Oil prices are rising for a fourth straight day as supply worries overshadowed concerns of a global economic slowdown.
Oil has jumped over 8% across the past few days as the market has become increasingly concerned over tight supplies amid Western sanctions on Russian oil and on reports that Saudi Arabia and UAE, the only suppliers who could potentially make up for lost Russian oil, would, struggle to increase output.
Supply worries outweighed fears of a deteriorating demand outlook in a potential future recession. Not even the risk-off mood and the stronger dollar have prevented oil prices from rising, highlighting the strength of bullish momentum.
WTI crude trades +0.8% at $111.67
Brent trades +0.8% at $114.72
14:30 EIA crude oil stock piles
15:00 ECB Lagarde’s speech