US open: Wall Street set for a mixed start amid rising covid concerns
Fiona Cincotta July 12, 2021 8:46 PM
Covid cases ae on the rise, raising concerns over slowing growth. Tech stocks are set to extend gains whilst the Dow & S&P500 head lower.
Dow futures -0.4% at 34472
S&P futures -0.14% at 4360
Nasdaq futures +0.31% at 14863
FTSE -0.5% at 7081
Dax +0.07% at 15686
Euro Stoxx -0.03% at 4065
Mixed start to a busy week
US indices are pointing to a mixed start on the open, after all three main Wall Street indices finished at all time highs on Friday.
Concerns grow over rising covid cases, as new daily infections in the US hit the highest level since May over the weekend, unnerving investors.
Covid concerns will add to nerves that peak growth has passed as recent US economic data has under-performed.
Whilst the Dow and the S&P futures are in the red, the high growth tech stock extends its rally as investors continue to rotate back into growth.
Whilst today is a quiet day for data and earnings there is plenty across the week to keep the markets busy. US CPI and PPI data on Tuesday and Wednesday, in addition to Fed chair Jerome Powell testifying before congress on Wednesday and Thursday, will keep inflation and the Fed’s next steps firmly in focus.
Tomorrow earning season is due to kick off with the Goldman Sachs, JP Morgan and PepsiCo updating he market.
Where next for the Dow Jones?
The Dow Jones hit a high of 34906 but failed to hold that level, slipping back below the level 34850 which had offered resistance on several occasions across the past month. The RSI is in bullish terrirory but points lower, giving mixed messages. Whilst the 50 sma on the 4 hour chart holds at 34600 buyers can be hopeful of another attack on 34850 and on towards 35000. A break through the 50 sma at 34600 could open the door to 34420 the ascending trendline support from ealy October and the 100 sma at 34350. Below here the sellers could gain momentum.
FX – USD rallies, EUR falls on dovish ECB Lagarde
The US Dollar is climbing higher at the start of the week, after steep losses at the end of last week. Safe haven flows into the US Dollar amid rising covid cases are lifting the greenback. Attention is also shifting back to inflation and the Fed’s next steps with CPI data, PPI data and Jerome Powell testifying before Congress coming up this week.
EUR/USD trades lower after ECB President Christine Lagarde Sid That forward guidance will be changed at the July 22 meeting. Lagarde hinted that the bond buying scheme could be extended beyond March 2022 albeit in a new format.
GBP/USD +0.24% at 1.3820
EUR/USD +0.1% at 1.1856
Oil falls on covid worries
Oil prices are slipping lower as concerns over slowing global growth overshadowed the prospect of tightening supply after OPEC+ talks to raise output failed earlier in the month.
The rapid spread of covid cases and unequal access to covid vaccines threaten to slow global economic recovery. According to Reuters, covid infections are rising in 69 countries. Parts of Asia are back under lockdown conditions.
This comes after OPEC+ group abandoned talks at the stat of the month amid infighting and failure to agree unanimously to raise output in order to satisfy the demand outlook
US crude trades -1.4% at $72.98
Brent trades -1.3% at $74.24
14:30 Fed Williams due to speak
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.