US open: Stocks to head lower in worst weekly performance in 2 months
Fiona Cincotta August 20, 2021 1:26 PM
Stocks look set to resume losses putting the Dow & S&P500 on track for the worst performance since mid May. Risk off dominated this week amid fears that the Fed could start tapering support as rising covid cases globally start to hamper the economic recovery.
Dow futures -0.4% at 34743
S&P futures -0.36% at 4390
Nasdaq futures -0.15% at 14906
FTSE +0.03% at 7052
Dax -0.32% at 15698
Euro Stoxx -0.08% at 4120
Risk off dominates
US stocks are pointing to lower open on Friday putting the SP500 & Dow Jones on track for the worst weekly performance in 2 months.
Risk aversion has dominated across the week amid fears that the Fed will start tapering bond purchases as covid cases rise globally. The prospect of the Fed reining in support as new covid restrictions in some countries slow the global economic recovery is proving too much for the market to handle.
Safe havens have outperformed across the week whilst riskier assets such as stocks have tanked. Cyclicals have underperformed tech stocks.
Adding to the downbeat mood China continues with its regulatory crack down. The Hang Seng tumbled another 1.8% hitting a 10-month low. Chinese stocks listed in the US will be under the spotlight.
Safe havens have outperformed across the week whilst riskier assets such as stocks have tanked.
Where next for the S&P 500?
The S&P 500 is resuming losses after a mild bounce in the previous session. Yesterday’s move higher saw the S&P500 close over its 200 sma on the 4 hour chart which could bring some optimism to the buyers, as well as well as the receding bearish bias on the MACD. For now, the price is back testing the 200 sma at 4400. A break below this level could open the door to 4350 yesterday’s low before 4230 the July low comes into focus. On the upside resistance at 4440 the 50 sma with a push above here opening the door to 4475 and fresh all-time high.
FX – USD at 9 ½ month highs, GBP tumbles as retail sales fall
The US Dollar is on the rise extending gains from the previous session and hitting a fresh 9 ½ year high against major peers as investors seek safety. Fears are growing that the rise in COVID cases could dampen the economic recovery just as central banks are starting to rein in stimulus.
GBP/USD- the Pound trades under pressure after weaker than forecast retail sales data. UK retail sales unexpectedly fell -2.5% MoM in June, well below the 0.3% growth forecast. Retail sales tumbled as covid cases rose and Pingdom sent more and more people into isolation.
GBP/USD -0.22% at 1.3606
EUR/USD -0.06% at 1.1670
Oil moves lower for a fourth straight session
Oil prices have picked up off three-month lows but are still trading down around 5% across the week. Rising covid cases, tougher lockdown restrictions particularly in China Japan, Australia and New Zealand is raining concerns over the health of the economic recovery and weighing on the demand outlook.
US crude trades -0.92% at $62.90
Brent trades -0.88% at $65.70
18:00 Baker Hughes rig count
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.