US open: Wall Street set for a quiet open with earnings back in focus

Congress building
Fiona Cincotta
By :  ,  Market Analyst

US futures

Dow futures -0.15% at 36103

S&P futures -0.08% at 4699

Nasdaq futures -0.01% at 16313

In Europe

FTSE -0.47% at 7299

Dax +0.08% at 16265

Euro Stoxx +0.04% at 4403

Learn more about trading indices

Inflation inspired sell off steadies

US stocks are set for a relatively flat open after a strong session on Tuesday. Today the economic calendar is looking quieter so investors' attention will naturally shift back towards earnings, particularly as there are some big names to draw their attention.

Target and Lowe will be under the spotlight today after reporting Q3 earnings. Lowe is set to rise after beating on top and bottom line. Target is under pressure amid squeezed margins.

 Yesterday all the major indices closed higher, boosted by upbeat numbers from retailers such as Walmart and Home Depot as well as impressively strong retail sales figures. Americans are ramping up their spending early into the holiday season. The data suggests that the economic recovery is gathering momentum.

Attention will be on Fed speakers later today who should shed some more light on whether the Fed are likely to move sooner to raise rates.

Yesterday St Louis Federal Reserve President James Bullard called for two interest rate hikes in 2022. Investors will be watching to see if today’s speakers follow suit.

 

Where next for S&P 500?

The S&P 500 is edging lower but continue to trade within a rising channel on the 4 hour chart. The price remains supported by the 50 sma at 4685. A break below here could see the S&P  fall out of the week old rising channel below 4675 and expose the 100 sma at 4645. However, it would take a move below 4630 the November 10 low for sellers to gain traction towards 4550. Meanwhile buyers are still looking for a move over 4720 for fresh all time highs.

S&P 500 chart

FX – USD hovers around 16-month high, GBP extends gains amid surging inflation

The USD is edging a few points lower but continues to hover around a 16 month high. Bets that the Fed could move sooner to raise rates increased following yesterday’s strong retail sales.

GBP/USD is advancing for a fourth straight day after UK inflation surged to 4.2% in October, up from 3.1% in September and ahead of the 3.9% forecast. The data comes following encouraging labour market data in the previous session, prompting speculation that the BoE could raise interest rates next month.

GBP/USD  +0.24% at 1.3460

EUR/USD  -0.05% at 1.1312

 

Oil extends losses

Oil prices are sliding lower after both the EIA and OPEC of a supply glut as COVID cases rise in the northern hemisphere. The EIA warned that high oil prices will see US production ramp up again in 2022. OPEC also said that they see an oil surplus building from as soon as December.

The warnings come as some countries in Europe, such as Austria and Holland have implemented new lockdown restrictions as COVID cases surge. Its too soon for this to be reflected in falling oil demand, however the risk is there and that is hurting the demand outlook.

Whilst headwinds are certainly building for oil prices, API data showed gasoline stocks fell by 2.8 million barrels significantly more than the 600,000 barrel decrease forecast.

EIA inventory data is due later today.

 

WTI crude trades -0.6% at $79.27

Brent trades -0.6% at $81.31

Learn more about trading oil here.

 

Looking ahead

14:10 Fed Williams

15:30 EIA Crude Stockpiles

16:00 Fed Bowman

17:40 Fed Bower

 

 

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