US open: Stocks head higher ahead of consumer sentiment data
Fiona Cincotta June 11, 2021 2:10 PM
US futures head higher as investors remain upbeat despite yesterday's 5% YoY inflation print. US consumer sentiment data is in focus.
Dow futures +0.2% at 34573
S&P futures +0.2% at 4248
Nasdaq futures +0.04% at 13973
FTSE +0.68% at 7133
Dax +0.6% at 15680
Euro Stoxx +0.7% at 4126
Stocks see follow through buying post CPI
USA futures are trading mildly higher, hovering around record levels as investors shrug off rising prices.
US CPI data rose by more than expected in May, jumping to a 5% increase YoY. However, there was sufficient evidence of one off factors to support the Fed’s belief that the spike in inflation is transitory.
The Fed has been extremely consistent with its view that high inflation will pass. Given that stocks rose even though inflation shot higher, suggests that inflation fears are almost fully priced in for now. The market is comfortable that the Fed won’t move too soon to taper. The data does naturally bring next week’s Fed monetary policy announcement very much into focus.
All three major US indices finished higher on Thursday with the S&P breaking to a fresh record high.
The US labour market continuing its steady recovery also helped risk sentiment. US initial jobless claims fell to the lowest level since the pandemic.
Looking ahead US consumer confidence data will be under the spotlight. Expectations are for
Meme stocks are likely to be in focus again as the volatility continues. The likes of GameStop, Clover Health and AMC Entertainment all experienced heavy losses on Thursday after recent strong rallies.
Where next for the S&P 500?
The S&P 500 trades around its all time high of 4249.5 reached in the previous session. The trend remains in place and the RSI is supportive of further upside, whilst is remains out of overbought territory. Buyers could target 4300 ahead of 4350. It would take a move below 4170 for the near term uptrend to be negated.
FX – USD edges higher, GBP falls as GDP misses forecast
The US Dollar is bounding higher, recouping losses from the previous session as the stronger than forecast CPI prints brings next weeks’ FOMC into focus.
GBP/USD trades lower versus after UK GDP data missed forecasts. GDP in April MoM rose 2.3% in a sign that the UK economy was gaining momentum as shops, hairdressers and inside hospitality reopened. This was up from 2.1% in March. However, it was just below the 2.4% growth forecast, which took the edge off sterling.
GBP/USD-0.2% at 1.4150
EUR/USD -0.4% at 1.2124
Oil rallies 10% over three weeks
Oil prices are edging higher on Friday and are set to book gains of over 1% this week, marking the third straight week of gains. Oil has rallied over 10% over the past three weeks as optimism surrounding the demand outlook grows.
Traffic data has revealed that traffic levels in the US and Europe are returning to pre-pandemic levels in an encouraging sign.
Goldman Sachs expects oil prices to reach $80 the barrel thanks to the rising vaccination rates leading to higher mobility in the US and Europe.
Oil already trades at a 2 year high.
US crude trades +0.13% at $70.27
Brent trades +0.27% at $72.40
15:00 Michigan Consumer Sentiment
18:00 Baker Hughes Rig Count
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.