US open: futures point lower jobless claims, oil, Tesla in focus
Fiona Cincotta February 18, 2021 9:25 PM
US futures point lower ahead of jobless claims data, consolidating recent gains. The Nasdaq underperforms on rotation out of growth stocks into value trade and oil remains well supported as the cold freeze in Texas continues.
Dow futures -0.5% at 31382
S&P futures -0.5% at 3903
Nasdaq futures -0.7% at 13606
FTSE -1.2% at 6631
Dax +0.04% at 13916
Euro Stoxx -0.30% at 3689
Stocks consolidate, Nasdaq underperforms
US stocks are set to open lower as the recent rally which drove indices to record highs earlier in the week pauses for breath.
Nasdaq futures are notably underperforming amid growing expectations that investors will rotate out of growth stocks, such as those tech giants which drove the markets higher across the pandemic and move into value stocks which are more closely tied to the performance of the US economy, such as banks and energy stocks.
Telsa trades -1.7% pre-market after cutting the price of the cheaper variants of its Model 3 and Model Y vehicles. The move to undercut other EV’s on the market comes as competition in the electric vehicle sector starts to ramp up. The move also comes after Elon Musk promised to make a $25,000 electric car within 3 years.
Facebook is expected to be in focus this session as a row between the tech giant and the Australian government escalates. Facebook, along with Google is locked in a battle with the Australian government over proposed laws to make digital businesses pay for news. Overnight Facebook announced that all Australian news publishers have be stopped from posting on its site. The stock is down just -0.7% although the backlash is growing on social media.
Walmart -5% pre-market after Q4 earnings missed Wall Street’s expectations. Same store sales grew by 8.6% in the US whilst e-commerce sales grew 69%. Whilst this is a high number it is the slowest growth since the pandemic started. Walmart warned that it expected sales to slow in the coming year and EPS to decline slightly as the tailwinds from the pandemic fade. Walmart reported EPS of $1.39 vs $1.51 expected on revenue of $152.1 billion.
GameStop hearing on Capitol Hill
In an attempt to get to the bottom of what drove GameStop and AMC Entertainment sharply higher a few weeks ago, the Financial Services Committee is expected to hear testimonies from leaders of Melvin Capital, Citadel, Robinhood and Reddit. The regulator is looking for signs of market abuse or market manipulation.
FX -USD eases
The US Dollar is edging lower whilst riskier currencies rise after the minutes from the Fed’s latest meeting showed that the US central bank was in no rush to taper support.
The US Dollar Index (DXY) -0.2% at the time of writing paring some of the 0.5% gains from the previous session.
GBP/USD trades +0.6% at 1.3933
EUR/USD trades +0.25% at 1.2065
Oil remains elevated but eases back from fresh 13 month high
Oil prices are retreating from fresh 13 month highs struck overnight as the big freeze in Texas continues and the state keeps around 40% of its output offline. These supply side concerns are keeping prices buoyed.
API data showed a draw of 5.8 million barrels on crude stockpiles significantly more than the 2.1 million expected.
EIA inventory data is due at 15:30 UTC.
Analyst Fiona Cincotta looks at the price action of oil here
US crude trades +0.5% at $61.50
Brent trades +0.5% at $64.65
US jobless claims 13:30 UTC
US jobless claims data is due later today. Analysts are anticipating weekly jobless claims decline slightly to 765,000 from 793,000 the week before. Even so, jobless claims are still high suggesting that business are struggling after the resurgence of covid.
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.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital 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), GAIN Capital Singapore 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 GAIN Capital Singapore 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 GAIN Capital Singapore 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.
GAIN Capital Singapore 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.