US open: Stocks rise, jobless claims fall

US futures

Dow futures +0.05 % at 34390

S&P futures +0.06% at 4480

Nasdaq futures +0.14% at 14582

In Europe

FTSE -0.11% at 7560

Dax +0.22% at 14100

Euro Stoxx  +0.1at 3828

Fed minutes as hawkish as expected

US stocks are edging higher after two days of steep losses. Treasury yields came off multi-year highs bringing some relief to battered high-growth tech stocks. Overall, the market mood was much calmer.

The US tech-heavy Nasdaq shed 4.5% over the past two sessions on hawkish Fed expectations. The minutes of the March Fed meeting showed that policymakers supported an aggressive tightening with one or more 50 basis point rate hikes and fast trimming of the balance sheet at $95 billion per month.

On the data front, US jobless claims dropped to 166k, well down from the 200k forecast, and the lowest level in over 50 years. The data highlights the tightness in the job market, supporting the Fed’s more aggressive approach.

In corporate news:

HP rallied over 12% after Warren Buffets’ Berkshire Hathaway disclosed a 4.2% stake in the company.

Levi Strauss is rising 2% pre-market after reporting better than expected Q1 results, as shoppers bought at higher prices and as the retailer confirms its 2022 outlook.

Where next for the S&P500?

The S&P 500 has been extending its decline from 4640 reached on March 29. The price falling below the 100 sma combined with the bearish crossover on the MACD points to more losses to come. 4420 the 50 sma and the March 3 high could offer support ahead of 4340 the 11 March high. On the upside, buyers will need to recapture the 100 sma at 4530  in order to look towards 4630 the March high.

FX markets USD falls, EUR rises.

USD is falling after reaching a 23 month high following the minutes of the Fed’s March meeting. The minutes showed the Fed is looking to get more aggressive, tightening monetary policy.

EUR/USD is rising after the ECB minutes showed that a large number of policymakers were adopting a more hawkish stance wanting to take immediate action to calm surging inflation. Eurozone retail sales rose 0.3% MoM in February, up from 0.2% in January but short of the 0.6% forecast.

GBP/USD  +0.01% at 1.3079

EUR/USD  +0.01% at 1.0915

Oil rises cautiously higher.

Oil prices are rising after booking steep losses of 5.5% in the previous session. Oil prices fell after EIA member countries said that they would release 60 million barrels of oil, in addition to the 180 million that the US had already announced.

The fact that oil prices are rising suggests that supply concerns persist despite the increase in supply. This will go some way to addressing the problem but won’t fully plug the Russian supply gap.

On the other side of the equation, demand concerns remain, limiting oil’s upside as Shanghai stays locked down and covid cases rise. The EIA stockpile data also revealed an unexpected rise in inventories, by 2 million against an expected draw of 2.4 million.

WTI crude trades +2.3% at $98.02

Brent trades +2% at $102.96

Looking ahead

19:00 Fed Bostic speech

19:00 Fed Evans speech

21:00 Fed Williams speech