US open: Stocks move higher, jobless claims hit 8-week high

US stocks extend gains and USD continues to fall. Jobless claims are at the the highest level since mid-November.

USA (2)

US futures

Dow futures +0.26% at 36396

S&P futures +0.2% at 4735

Nasdaq futures +0.3% at 15953

In Europe

FTSE +0.28% at 7561

Dax +0.39% at 16057

Euro Stoxx +0.25% at 4328

Learn more about trading indices

Inflation, jobless claims and rate hike in focus

US stocks are set to open higher after booking mild gains in the previous session. The debate over inflation and interest rates continues after CPI rose to 7% in the previous session. Today PPI inflation rose to 9.7% in December, up from 9.6% but short of the 9.,8% forecast.

Jobless claims unexpectedly rose to 230k, up from 207k, marking the highest number of initial claims since mid-November. The increase comes as COVID cases surged. However, the rate of initial jobless claims is still reflective of a rapidly tightening labour market. Let’s not forget that there were still 10.6 million job vacancies in the US at the end of November.

The broad expectation is that the Fed will hike 4 times across the coming year starting in March. The data this week has been consistent with this expectation so no additional Fed fears have shown up in the market

In corporate news:

Boeing is trading 2.5% higher pre-market on reports that the troubled 737 MAX jet could begin service in China as soon as this month.

Taiwan Semiconductor Manufacturing rose 4.4% after the chip maker reported a record quarterly profit amid surging demand.

Where next for the Nasdaq?

The Nasdaq continues to extend its rebound from 15165 reached earlier in the week. The move above above the 100 sma is keeping buyers hopeful. However, the RSI is in neutral territory. Buyers might look for a move over 50 sma at 16150 in order to look towards 16760. Sellers could watch for a move below the 100 sma. It would take a move below 15165 for sellers to gain tracton.

 

Nasdaq chart

FX markets USD falls, GBP rises

The USD is falling for a third straight session. DXY has dropped 1.2% in 3 days even as CPI hits a 40 year high. PPI rises less than expected and jobless claims rise, hurting demand for the greenback.

GBP/USD has risen above 1.37 as senior cabinet ministers have rallied around Boris Johnson, who has so far managed to cling onto power

 

GBP/USD  +0.20% at 1.3727

EUR/USD  +0.34% at 1.1463

 

Oil eases but remains around its two month high

Oil prices are edging mildly lower but stays close to two-month highs after booking solid gains over the past two sessions. The weaker USD is helping the greenback priced commodity in addition to the improved demand outlook, even as Omicron cases rise. Any impact from Omicron is expected to be short lived.

EIA inventory data revealed that crude oil supplies fell by 4.6 million barrels, significantly more than the 1.6 million decline forecast. This came after the API report reported a 1.1 million barrel decline.

However, the EIA also reported an 8 million barrel increase in gasoline inventory, most likely owing to the Omicron impact.

WTI crude trades -0.3% at $81.73

Brent trades -0.12% at $84.11

Learn more about trading oil here.

 

Looking ahead

15:00 Fed Brainard speech

 

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.

 

 

 

 

Disclaimer

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.