US open: Stocks steady as earnings ramp up, FOMC eyed

US stocks hold steady near record highs ahead of a deluge of earnings including Microsoft and Apple. Caution ahead of tomorrow's FOMC is keeping investors on the sidelines.

USA (2)

US futures

Dow futures -0.5% at 33097

S&P futures +0.07% at 4192

Nasdaq futures +0.16% at 14049

In Europe

FTSE -0.2% at 6950

Dax -0.26% at 15261

Euro Stoxx  -0.1% at 4014

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US stocks point to a mixed open

US stocks are heading for a relatively flat open as earnings season gathers pace and as investors look ahead to the Fed’s rate decision tomorrow.

The S&P500 struck a fresh record high on Monday whilst the tech heavy Nasdaq also hit its first record high since February.

A strong earnings season is underpinning US indices. Over 80% of the companies which have reported have surprised to the upside.

Tech stocks in focus

Tesla reported after the bell, beating on earnings but just falling short on revenue. The stock trades around -2% pre-market after vague deliveries guidance and the reliance of Bitcoin sales to turn a profit.

Microsoft is due to report after the close, with strong number expected on the back of laptop sales and cloud services amid WFH.

On the sidelines ahead of FOMC

Despite solid earnings, indices are muted as investors await the Fed rate decision tomorrow. The US central bank is not expected to move on policy. However, the US economic recovery is looking more convincing so Fed Powell is likely to face questioning surrounding the Fed next move. The following meeting is in June. By then the Fed will have a clearer picture of the recovery, meaning that meeting is likely to be more significant.

Where next for the Nasdaq?

The main trend is bullish as the Nasdaq trades above 50 & 100 EMA, in the rising channel and the RSI is supportive of further gains. The price is testing resistance at 14050 its all time high. A move beyond here could open the door to 14200 round number. On the flip side immediate resisyance is seen at 13700. A fall below the mid point of the ascending channel at 13600 could see the sellers gain traction.

FX – US Dollar looks to consumer confidence data

FX markets are trading in a muted fashion. The US Dollar is trading flat, giving back earlier gains. US consumer confidence data is expected to rise. The pandemic is in retreat, the labour market is recovering and retail sales soared last month on stimulus checks. Americans appear to have many reasons to feel upbeat. A strong reading could lift the USD.

European currencies are trading quietly as investors across the board sit on the fence ahead of the Fed.

The Euro trades flat despite Germany looking to offer the covid vaccine to all adults by June

GBP/USD  +0.03% at 1.3901

EUR/USD -0.01% at 1.2083

Oil rises with OPEC coming into focus

Oil is edging higher paring some losses from the previous session. Concerns over covid  cases in India are likely to keep any gains capped.

Investors are looking towards the OPEC+ meeting tomorrow when the cartel will discuss production policy. The OPEC technical committee yesterday acknowledged potential demand concerns brought by the deteriorating picture in India. However, OPEC is likely to maintain its forecast for oil demand growth, predicting it to rise by 6 million barrels a day in 2021. The big question is whether concerns over India will see the group pushing back on planned output increases?

API data is due later today.

US crude trades +0.5% at $62.26

Brent trades +0.5% at $65.44

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

15:00 US Consumer confidence

21:30 API crude oil stockpiles

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