US open: Wall Street rises as Powell remains dovish, Biden & Xi Speak
Fiona Cincotta February 11, 2021 9:41 PM
Wall Street points higher ahead of jobless claims data as Fed Chair Powell remains supportive,
Stocks on Wall Street hit fresh all time highs on Wednesday. The Dow closed at record levels whilst the S&P & Nasdaq hit record intraday highs. Further gains are expected on the open after Federal Reserve Chair Jerome Powell reaffirmed a supportive stance.
Dow futures trade +0.2% at 31450
S&P futures +0.2% at 3918
Nasdaq futures +0.3% at 13715
FTSE flat at 6525
Dax +0.6% at 14024
Euro Stoxx +0.5% at 3666
Biden and Xi speak
On the eve of the Lunar New Year, President Biden and China’s Xi Jinping spoke for the first time. Biden spoke of his concern over China’s “coercive and unfair economic practices” in addition to human rights abuses in the Xinjiang region.
Taiwan was also specifically mentioned as one of Biden’s top three concerns, although China pushed back considering such affairs to be internal.
Relations and particularly economic relations between the two powers are expected to remain a key factor for market performance. Whilst it is still early days markets will be watching carefully going forwards to see whether Biden makes any substantial changes to US – Sino policy or whether he just adopts a more friendly tone.
Dovish Powell talks down the US Dollar
Federal Reserve Chair Jerome Powell reiterated that the Fed’s monetary policy will remain supportive. Speaking to the Economic Club of New York yesterday, Jerome Powell said that the US jobs market was still a long way fully recovered. He added that the Fed isn’t considering lifting interest rates from their current near zero level.
Powell’s comments kept pressure on the US Dollar with DXY continuing to hover around 2 week lows.
DXY trades flat at 90.37
GBP/USD trades +0.05% at 1.3835 after hitting a fresh multi year high of 1.3860.
EUR/USD trades +0.2% at 1.2140
Analyst Fiona Cincotta looks at the price movement of GBP/USD here
US equities are pointing to a stronger start on the open, boosted by the prospect of an accommodative Federal Reserve for longer. Any expectations that the Fed would be tapering support early were quashed following the weaker than forecast CPI data yesterday.
Earnings continue to come through with PepsiCi and Heinz Kraft reporting ahead of the open and Disney reporting after the close.
My colleague Matt Weller looks at what to expect from Disney’s Q4 results here.
UBER misses on revenue
UBER trades -5% pre-market after disappointing Q4 results after food delivery growth failed to offset the decline in ridesharing & the pandemic continued to drag on revenues. Whilst revenues from the food delivery surged 224% Revenue from rideshare plunged 52% yoy, which was more than forecast. The overall effect was a 20% drop in revenue compared to a year earlier to $3.17 billion, well short of the $3.58 billion forecast.
Oil snaps 8 day winning streak
Oil prices are slipping lower amid profit taking after an impressive 8-day rally and despite a larger than expected decline in US crude supplies.
US EIA data recorded a draw 6.643 million barrels for the week 5th Feb, plunging crude stocks to their lowest level since March.
US crude trades -0.8% at $58.20
Brent trades -0.8% at $60.95
US initial jobless claims expected to show 757k vs 779k last week.
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.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital 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), GAIN Capital Singapore 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 GAIN Capital Singapore 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 GAIN Capital Singapore 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.
GAIN Capital Singapore 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.