US open: Futures mixed in cautious trade, ISM services data in focus
Fiona Cincotta July 6, 2021 8:49 PM
US stocks are pointing to a cautious start to trade after the extended 4th July weekend. Rising oil prices threaten to undermine the global economic recovery. Nasdaq trades at record high. ISM services PMI in focus.
Dow futures -0.27% at 34750
S&P futures -0.02% at 4348
Nasdaq futures +0.2% at 14740
FTSE -0.18% at 7150
Dax -0.4% at 15606
Euro Stoxx -0.28% at 4078
Nasdaq hits fresh record high
US stocks are pointing to a mixed start after the holiday lengthened weekend. Cautious trade dominates after the OPEC+ group failed to agree to curb output cuts, sending oil prices to almost three year highs. Rising oil prices are positive for oil majors. However, the good news stops there. Rising oil prices add to lingering concerns over rising inflationary pressures and could undermine the global economic recovery.
Tech stocks are firmly in favour with the Nasdaq hitting fresh all-time highs. Meanwhile the Dow is edging lower as investors ditch value stocks reflecting concerns over the economic recovery.
Attention will now turn to the ISM services PMI, which is expected to show a slight dip lower in June to 63.5, down from 64. This would still be a very robust number. The employment subcomponent is expected to rise, whilst prices paid are due to ease slightly to 79.3 down from 80.6 in May.
Where next for the Nasdaq?
The Nasdaq continues to trade within its ascending channel dating back to mid-May. The index charged through previous resistance at 14050 the all time high reached in April with buyers looking to target 15000 the key psychological level. The RSI has moved into overbought territory suggesting the price could be vulnerable to a pull back. It would take a move below 14050 to negate the near-term uptrend.
FX – Euro trades lower on mixed data
The US Dollar is charging higher, paring some losses from Friday following the NFP numbers on safe haven flows. Attention will turn to the ISM services data, ahead of tomorrow’s release of the minutes from the latest FOMC meeting.
EUR/USD trades lower after a mixed bag of data. Whilst Eurozone retail sales numbers were better than expected, the good news stopped there. German factory order unexpectedly declined in May by -3.7%, down from -0.2% in April and well below the 5% rebound expected. German ZEW economic sentiment also fell by more than forecast to 63.3 in July, down from 79.8 in June and short of the 75.4 forecast. The data comes following impressive PMI numbers on Monday.
GBP/USD +0.07% at 1.3850
EUR/USD -0.31% at 1.1846
Oil surges as OPEC+ talks collapse
Oil prices trads around 3-year highs after the OPEC+ group failed to agree to increase oil production. After 3 days of intense talks, the group abandoned the meeting meaning that the expected increase in oil output won’t be happening as expected.
The oil market remains tight. Demand is rising as economies reopen but supply remains limited by OPEC+. Inventories are being drained and the situation is only expected to worsen as demand picks up further across the summer months. As a result, oil prices jumped higher. WTI crude hit a high of $77 whilst Brent hit $77.80.
US crude trades +1.4% at $76.22
Brent trades 0.0% at $77.17
14:45 US Markit Services PMI (June)
15:00 ISM Services PMI
How to trade with City Index
Follow these easy steps to start trading with City Index today:
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.