US open: Stocks rally, jobless claims fall, banks beat
Fiona Cincotta October 15, 2021 12:43 AM
US stocks look set to rise amid an upbeat market mood. Jobless claims fall to a post pandemic low & banks beat earnings forecasts.
Dow futures +0.83% at 34680
S&P futures +0.98% at 4407
Nasdaq futures +1.15% at 14950
FTSE +0.7% at 7195
Dax +1.06% at 15416
Euro Stoxx 0+0.5% at 4075
Banks rise on earnings beat, initial jobless claims hit fresh post pandemic low
US stocks are on the rise amid an upbeat mood in the market which is overshadowing concerns over supply chains and rising price pressures which could slow the global economic recovery.
Big banks Morgan Stanley and Bank of America are trading higher pre-market on the back of strong earnings as deal making and record levels of M&A boosted fees across the quarter.
Adding to the upbeat mood US initial jobless claims fall to a fresh post pandemic low below 300k to 293k, this was well down from the upwardly revised 329k the previous week and below forecasts of 319k. The data suggests that the recovery in the labour market is continuing, even if the NFP remains relatively weak in comparison.
PPI data rose by more than expected suggesting that the current uplift in CPI still hasn’t topped. However, the market is happy to shrug this off today in a similar fashion to yesterday.
Today’s move higher in equities indices is an extension of gains from the previous session. Yesterday stocks rose and the US Dollar declined despite CPI inflation increasing ahead of forecast to 5.4% and the Fed indicating that it will start tapering bond purchases. The market really appears to be buying back into the central bank’s expectation that the rise in inflation will be transitory. Furthermore, the Fed indicating that it will start tapering removes an element of the unknown from the market; we all know how much the market hates unknowns. The market has spent the past few months obsessing over the timing of the Fed’s taper. Now it is pretty much out in the open sentiment can move forward.
Where next for the Dow Jones?
The Dow Jones has experienced choppy trade across recent sessions. The rebound off 33500 on October 1st, failed at the 50 sma, dropping lower to yesterday’s low point of 34100. Today the price is on the rise again, pushing over the 20 sma at 34400 and heading back toward the 50 sma at 34890. A close above here could cement a bullish bias with 35000 a key level ahead of 35500. A move below the 20 sma could see 34120 tested drawing 33500 back into focus.
FX – USD lower, GBP rises on
The US Dollar is extending losses from yesterday in what appears to be a buy the rumor sell the fact trade following the higher than forecast CPI read and the FOMC minutes which point to tapering this year.
GBPUSD is extending gains amid Brexit optimism and expectations that the BoE could move to hike rates as soon as this year. The CME BoE watch tool indicates that a 72% probability of a rate hike in December is now priced in.
GBP/USD +0.38% at 1.3711
EUR/USD +0.11% at 1.1609
Oil resumes advance
After a slight dip lower in the previous session, oil prices are resuming the uptrend. The International Energy Agency raised its demand growth forecast for 2021 & 2022 saying that record natural gas prices will boost demand for oil. Oil demand is expected to rise by 500,000 barrels a day as industries switch away from more expensive sources of power, such as gas and towards oil.
Separately the API stockpile report revealed a rise in crude stockpile but a larger than forecast draw on gasoline inventories. The EIA stockpile report is due shortly.
WTI crude trades -0.8% at $79.43
Brent trades -0.8% at $82.38
15:30 EIA crude oil inventories
17:00 Fed Williams Speech
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels
- Place the trade.
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.