US open: Wall Street points to a mixed start as retail sales disappoint

Retail sales miss forecasts -2.7% MoM on harsh weather conditions. The Fed's rate decision tomorrow is now in focus. Yields have eased back for now supporting gains in tech.

USA (2)

US futures

Dow  futures -0.05% at 32833

S&P futures +0.1% 3960

Nasdaq futures +0.5% at 13150

In Europe

FTSE +0.8% at 6802

Dax +0.7% at 14559

Euro Stoxx +0.4% at 3847

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US retail sales worse than expected

US retail sales February -2.7% down from the 5.3% surge in January and lower than the -0.5% decline forecast.  

Retail sales fell faster than expected in part owing to the harsh weather conditions in the US last month and following January's jump in sales thanks to the stimulus checks received.

US treasury yields continue to slip lower to 1.59% as the weaker retail sales data helps ease inflation fears.

Attention will now turn to the Federal Reserve monetary policy announcement tomorrow. The Fed are expected to keep policy on hold and remain accommodative. Growth and inflation forecasts are expected to be revised higher.

Learn more about the Fed

Stocks point to a mixed open

US equities are set to open mixed and trade in a narrow range as investors look ahead to tomorrow’s Federal Reserve monetary.

Investors are pausing for breath after the Dow and S&P 500 rallied to fresh all-time highs.

Where next for the Dow Jones?

The Dow has traded within an ascending channel since early November. The price broke out above the ascending channel at 32,500 to power higher to a fresh all time high of 32976. 

The RSI is not yet in overbought territory but is close. There could be scope for more gains prior to any consolidation. However, the bulls ned to break through the all time high of 32976 in order to target 33,000 round number prior to setting its sights on 34,000. 

Failure to hold above the upper band of the ascending channel could see the seller test 31850 the 20 sma before 31320 the 50 sma. A move below the lower band of the ascending channel could see bears gain momentum. 

Stocks in focus

Facebook  - trades +0.3% pre-market after reaching a deal with News Coro to pay for news in Australia. This is a move which is likely to have consequences in other countries as well.

AstraZeneca + 2.8% pre-market after Canada approved the AZN covid vaccine for over 65's. Australia also said that it plans to distribute the vaccine,

Rising covid cases & AZN vaccine suspensions in Europe

Covid cases are on the rise again in parts of Europe. France, Germany and Italy are reporting rising daily covid cases. This comes at a time when a growing number of countries in the EU are suspending the use of the AstraZeneca vaccine of safety fears, even tjough the European Medicines Agency repeated its opinion that the benefits outweigh the risks.

Despite these issues AstraZeneca is topping the FTSE 100 index +3.4%

FX – BoE & Brexit weigh on GBP, ZEW sentiment boosts EUR

GBP/USD – The Pound is among the weakest major peers. GBP trades under pressure as post Brexit trading relations between the UK & EU hit a fresh low and after BoE’s Andrew Bailey affirmed that the central bank would continue purchasing bond across the year, pouring cold water on any hopes to the BoE moving early to tighten policy.

EUR/USD - is pushing higher following upbeat German ZEW sentiment data. The data revealed a jump to 76 vs 71.5 in February and above forecasts of 74.

GBP/USD -0.25% at 1.3868

EUR/USD  trades +0.15% at 1.1947

Oil extends losses ahead of stock pile data

Oil prices are heading southwards for a third consecutive session amid growing concerns over the resurgence of covid in Europe and ahead of stockpile data later.

Fears regarding future demand are on the rise as Europe’s covid situation appears to deteriorate. With cases rising and the vaccine programme going from one obstacle to another, tighter lockdown restrictions seem unavoidable.

The American Petroleum institute (API) is expected to release weekly stockpile data later today. Stockpiles in the US experienced a sharp rise in recent weeks following cold snap in Texas. Oil prices remain under pressure as inventories are still expected to show significant gains.

Analyst Fiona Cincotta looks at the price action of WTI and levels to watch here.

US crude trades -1.3% at $64.50

Brent trades -0.1% at $67.94

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

13:15 US Industrial production

20:30 API oil inventories

23:30 AUS Kent speech

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