US open: Stocks steady ahead of Fed announcement
Fiona Cincotta November 3, 2021 12:57 PM
US stocks hold steady near record highs ahead of the Fed.
Dow futures -0.15% at 36000
S&P futures -0.09% at 4628
Nasdaq futures +0.11% at 15992
FTSE -0.43% at 7243
Dax +0.42% at 15961
Euro Stoxx +0.20% at 4303
It’s all about the Fed
US stocks are pointing to a broadly flat open, hovering near record highs with all eyes towards the Fed. The Fed is widely expected to begin tapering bond purchases from November. The markets have been focused on this announcement for many months. However, given the forward looking nature of the markets this announcement is not likely to be a catalyst for future direction. Instead, commentary surrounding inflation expectations and any clues on the timing of the first rate hike will be key.
Prior to the Fed there is plenty of data for investors to wade through including ISM services PM and factory orders.
US jobless claims surprised to the upside with 571k jobs added in the private sector which bodes well to Friday’s non farm payroll report, which is playing second fiddle to the Fed this month. The upbeat numbers suggest that the labour market recovery is on track. However, let’s not forget that we have several months recently when the ADP has beaten forecasts only for the non farm payroll to disappoint.
Corporate earnings will continue to pour in with Marriott International, Esty, Qualcomm and MGM Resorts all in focus.
Lyft will also be under the spotlight after reporting better than expected Q3 numbers.
Where next for Dow Jones?
The Dow Jones reached a fresh all time high in the previous session of 36087 the rising trend line resistance. The price is still hovering around key 36000 level, whilst the RSI is supportive of further upside. Even if the price did dip lower it could be a buy the dip scenario. It would take a move below 35650 and 35500 to negate the near term uptrend and for sellers to pick up the pace towards the 50 sma at 35000. Meanwhile buyers are looking for a move above 36087 for fresh all time highs.
FX – USD edges lower, GBP rebounds on strong PMIs
The US Dollar is ticking a few pips lower as investors await the latest Fed monetary policy decision. Prior to that there is plenty of data for USD traders to digest including ISM services PMI.
GBP/USD is rebounding firmly after three straight days of declines. UK services sector activity grew by more than expected in October. The PMI came in 59.1, well up from 55.4 in September and beating forecasts of 58. Given the dominance of the service sector in the UK economy the data bodes well for economic growth. It’s worth noting that the faster growth came despite a record growth in operating costs, which the BoE could fear will be passed on to the consumer lifting inflation.
GBP/USD +0.32% at 1.3654
EUR/USD +0.07% at 1.1587
Oil looks to API data as supply remains tight
Oil prices are falling lower for a second straight session following a larger than expected build in oil inventories. According to the API industry report US crude stock piles grew by 3.6 million barrels, following a build of 2.3 million in the previous week. Expectations had been for a build of 1.6 million barrels. Meanwhile gasoline inventories fell by 552,000 barrels. This marked the sixth straight week crude oil inventory build.
Attention will now turn to the EIA inventory report due shortly and the OPEC meeting tomorrow. OPEC are widely expected to stick to the output plan that was agreed in July.
WTI crude trades -2.15% at $81.33
Brent trades -2% at $82.82
13:45 Markit Services PMI
14:00 ISM Services PMI
14:00 Factory Orders
14:30 EIA Crude Oil Stocks
18:00 Fed Rate Decision
18:30 Fed Press Conference
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.