US open: Stocks rebound Nike, Micron lead the charge

US futures

Dow futures 0.8% at 35210

S&P futures +0.85% at 4608

Nasdaq futures +1.05% at 15800

In Europe

FTSE +1.05% at 7270

Dax +1.2% at 15417

Euro Stoxx +1.43% at 4168

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Stocks rebound in holiday trade

US stocks are set for a higher open today, paring Omicron inspired losses from the previous session. Strong corporate earnings from the likes of Nike and Micron are helping stocks rebound. However, Omicron concerns linger.

The thin holiday trade is resulting in flakey sentiment driving the stocks lower then higher as the markets struggle to concrete the risk attached to Omicron. The new COVID variant is now the dominant strain in the US. However, it is still too early to conclude whether hospitalizations and deaths are up because of the variant. News from the CEO of Moderna that an Omicron vaccine could be developed quickly is helping lift stocks, which have been see-sawing in recent sessions.

Indices also fell in the previous session on the failure of President Biden’s $1.75 trillion spending bill to pass through the senate, which ultimately could mean slower growth prospects for the US.

In corporate news:

Given the lack of macro data, attention is firmly on earnings from big names such as Nike and Micron.

Nike is on the rise pre-market after strong direct sales and a 12% jump in North American sales offset a 20% slump in sales in China.

Micron trades over 8% higher pre-market after a solid start to the financial year thanks to strong demand for its memory and storage chips.

Where next for the S&P500?

The S&P500 has rebounded off the 100 sma at 4531 and heading higher towards the 50 sma. Buyers will be looking for a close over the 50 sma to cement further gains towards 4700 round number and 4752 the all time high. Meanwhile sellers could look for a move below the 100 sma to confirm further losses.

FX – USD falls, EUR takes advantage

The USD is falling lower on Tuesday although remains above 96.00 against a basket of currencies after the Fed opened the door to three rate hikes in 2022.

EUR/USD is rising despite GFK German consumer sentiment plunging lower. The closely watched index dropped to -6.8 in January, down from -1.8 in December and significantly worse than the -2.5 that analysts’ forecast. Surging COVID cases and inflation is hurting morale.

 

Oil rebounds, although Omicron fears cap the upside

Oil prices are heading higher, recovering some of the steep losses from the previous session as risk sentiment in the market improved. Although investors remained cautious amid the rapid spread of Omicron across the globe.

It would seem that much of the COVID fears have now been priced in. That said, should we start seeing more lockdown restrictions imposed, the price could yet fall further. The upside is being limited by these concerns.

Looking ahead API inventory data is expected to show that oil inventories have fallen for a fourth straight week, whilst gasoline and distillate are expected to have risen.

WTI crude trades +1.2% at $69.53

Brent trades 1% at $72.41

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Looking ahead

15:00 Eurozone consumer confidence

21:30 API weekly crude oil stock piles