US open: Earnings optimism lifts stocks higher, manufacturing PMI due
Fiona Cincotta November 1, 2021 1:11 PM
Encouraging earnings keeps sentiment buoyed. US ISM manufacturing PMI in focus.
Dow futures +0.37% at 35965
S&P futures +0.36% at 4621
Nasdaq futures +0.3% at 15900
FTSE +0.2% at 7261
Dax -0.62% at 15588
Euro Stoxx -0.47% at 4211
Encouraging earnings overshadow headwinds
US stocks are set to rise on the open amid optimism surrounding the economic recovery as global earnings continue to impress and European stocks hit record highs. Of the 280 S&P 500 companies that have reported 82% have exceeded expectations. Strong earnings are supporting the belief that the economy will be OK despite headwinds from rising prices, labour shortages and supply chain issues.
Stocks are looking to power higher even as inflation expectations remain high and the bets are rising that the Fed could move to hike rates sooner. Comments by US treasury secretary Janet Yellen, who expressed confidence in the economic recovery from the pandemic is also helping sentiment.
Attention will now turn to US manufacturing PMI which is expected to ease slightly in October but remain firm at 60.5.
Separately Biden’s economic agenda appears to be on track as Democratic law makers look to overcome difference and head for a vote on Tuesday on both the $1 trillion bipartisan infrastructure bill and the $1.85 trillion social safety net and climate bill.
Where next for Dow Jones?
The Dow Jones is extending its rebound from 33500 to fresh all-time highs. The price continues to hold above the previous all time high of 35630 and the RSI points to further gains whilst it remains out of overbought territory keeping buyers optimistic. Possible resistance could bee seen around 36150 the rising trendline. A fall below 35630 could see 35500 tested. A fal below here would negate the near term up trend. A fall below 35000 the 50 sma could see sellers gain traction.
FX – USD hold gains, GBP hit by Brexit
The US Dollar is edging a few pips lower but holds on to most of Friday’s gains. The USD jumped higher following the release of core PCE data on Friday which hit a 30 year high at 3.6%. The data prompted a sooner move by the Fed to hike rates.
GBP/USD is underperforming amid rising Brexit tensions, with headlines going from bad to worse. As the UK – French fishing row escalates. UK manufacturing PMI was revised higher to 57.8 from the flash reading of 57.7, prices rocketed higher.
GBP/USD -0.22% at 1.3663
EUR/USD +0.12% at 1.1576
Oil resumes uptrend
Oil prices are resuming their uptrend after losing ground last week for the first time in 9 weeks. Whilst WTI dipped just 0.2%, last week, those losses have already been pared.
The demand outlook remains strong for oil ahead of the OPEC + meeting later this week. The oil cartel is not expected to raise output further despite pressure rising from leaders such as Joe Biden to do so. Members Kuwait and Iran have voiced their support to keep output as it is.
Gains in oil are being capped by news that China has released gasoline and diesel reserves to increase market supply.
WTI crude trades +0.1% at $82.99
Brent trades +0.47% at $84.01
14:00 ISM Manufacturing PMI
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.