US open: Wall Street opens mixed as virus concerns linger
Fiona Cincotta August 9, 2021 9:57 PM
Wall Street opens mixed after Friday's strong jobs report. COVID concerns hover over the market as cases rise in China.
Dow futures -0.24% at 35119
S&P futures -0.1% at 4431
Nasdaq futures +0.05% at 15119
FTSE -0.07% at 7120
Dax -0.2% at 15727
Euro Stoxx +0.3% at 4173
Jobs data and covid cases in focus
US stocks are trading mildly lower on the open but remain close to all time highs as investors continue to digest Friday’s impressive jobs report and concerns grow over the spread of the delta variant COVID variant, particularly in China and the US.
Virus fears are predominantly being played out in the oil market, but that naturally leads to oil majors coming under pressure. Firms such as ChevroN, Exxon Mobile and Halliburton traded under pressure.
Stocks are being under pinned by a strong earnings season which saw a record number of companies beat on earnings. Whilst comparisons will last year were broadly flattering, guidance has also been strong boding well for the bull market to continue.
Today there is little in the way of fresh data to drive trading, investors will look ahead to the release of CPI data on Wednesday for further clues as to whether the Fed is likely to make an announcement on tapering support at the Jackson Hole economic forum later this month.
Where next for the Dow Jones?
The Dow Jones closed at a new record high on Friday after breaking through resistance at 34760 – 35000. The price is consolidating gains today between 35000 and the new all time high at 35250. It worth noting the RSI bearish divergence in play since late April which often suggests that momentum is slowing. It would take a move below 34760 for sellers to gain traction.
FX – USD consolidates gains, EUR shrugs off decline in confidence
Broadly speaking the FX markets are quiet today after a volatile end to last week.
USD is consolidating gains from Friday. The greenback trades flat after booking strong gains on Friday following the better than forecast NFP. The all-round strong report boosted bets that the Fed could taper bond purchases sooner rather than later.
EUR/USD has trades roughly flat even as Sentix investor confidence drops sharply in August. The index dropped to 22.2, down from 29.2 in July, whilst marking the third straight month of declines. Concerns over more lockdown restrictions in the Autumn are unnerving investors.
GBP/USD +0.02% at 1.3875
EUR/USD +0.02% at 1.1760
Oil skids a further 4% lower
Oil prices are tumbling lower at the start of the week. After falling over 7% last week, both oil benchmarks are down over 4% at the start of the week. Chinese covid restrictions and a dire UN climate warning have sent oil sliding.
Demand expectations are once again taking a hit after China imposes travel curbs in 46 cities amid the spread of delta COVID. The second largest oil consumer is seeing covid cases rise quickly which is becoming an important factor in the clouding of the oil demand outlook.
The UN gave a dire warning over climate change as global warming nears its limit.
US crude trades -3.7% at $6561
Brent trades -3.6% at $6803
No major releases
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.