US open: Nasdaq tumbles on rising yields, oil shoots higher

US futures

Dow futures -0.9% at 35607

S&P futures -0.99% at 4614

Nasdaq futures -1.43% at 15350

In Europe

FTSE -0.55% at 7571

Dax -0.98% at 15790

Euro Stoxx -0.81% at 4268

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Big tech falls, Goldman disappoints

US stocks are set to fall lower with the tech heavy Nasdaq leading the charge lower as traders returned from the long weekend as readied for a more hawkish Fed.

Soaring oil prices, which hit a 7-year high are underscoring concerns over high inflation and expectations of an aggressive round of monetary policy tightening from the Fed across 2022.

Treasury yields pushed higher with the 2- and 10-year yields reaching levels last seen 2 years ago. Surging yields hit demand for high growth tech stocks with the likes of Alphabet, Meta, Amazon and Microsoft all facing losses o between 1.5% - 2.4% on the open.

Adding to the big tech woes, concerns are rising over a Senate panel which is due to debate later in the week a bill to rein in app stores of companies, such as Apple and Amazon, which some law makers say exert too much market control.

Disappointing numbers from US banks are adding to the downbeat mood in the market.

In corporate news:

Goldman Sachs falls 2% pre-market after missing Q4 profits estimates as weak trading activity overshadowed a stellar year for mergers and acquisitions. The more stable economy resulted in less volatility in the markets resulting in a slowdown in trading revenue. EPS fell to $10.81 down from $12.08 a year earlier. This was short of the $11.76 forecast. Investment banking revenue increased 45% to $3.80 billion.

Where next for the Nasdaq?

The Nasdaq has been trending lower, forming a series of lower highs since the end of December last year. The price trades below the 50 & 200 sma on the 4 hour chart. The 50 sma also crossed below the 200 sma in a bearish signal. The RSI is supportive of further losses whilst it remains out of oversold territory. Sellers will look for a break below 15280 yesterday’s low to open the door to 15170 last week’s low. Buyers will look fir a move over the 50 sma this week’s high at 15675 to negate the near term down trend and head towards 16000 the 200 sma last week’s high.

FX markets USD rises, GBP falls despite upbeat jobs data

The USD is tracing yields higher. Yields hit a two year high as traders’ position for a more hawkish Fed ahead of next week’s policy meeting.

GBP/USD trades lower despite encouraging jobs data and record job creation. UK unemployment ticked lower to 4.1% down from 4.2% whilst labour shortages deepened. The data boosts the chances of a rate hike by the BoE in February.

 

 

Oil hits 7 year high

Oil prices have jumped higher hitting a 7 year high amid escalating tensions and possible supply disruptions in the middle east. An attack by Yemen Houthi on the UAE have ramped up this week with fuel trucks being hit. The group have warned of more attacks to come. These disruptions ate coming at the same time that supply is already tight and failing to meet strong demand.

There are growing expectations from the likes of Goldman Sachs that oil prices could reach $100.

API oil stockpile data is due later today.

WTI crude trades +0.7% at $84.27

Brent trades +0.8% at $86.73

Learn more about trading oil here.

 

Looking ahead

21:30 API Crude Oil Inventories

23:30 Australian Westpac Consumer Confidence