US open: Stocks rise as earnings roll in, Disney impresses

US futures

Dow futures +0.73% at 34195

S&P futures +0.9% at 4154

Nasdaq futures +1.35% at 12666

In Europe

FTSE +0.71% at 7941

Dax +1.1% at 15413

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Jobless claims rise

US stocks are bounding higher after US jobless claims rise by more than expected and as entertainment giant, Walt Disney beats forecasts.

US jobless claims rose by 196,000 last week, up from 183,000 the week before this was ahead of the 190,000 forecast but remains below 200,000, suggesting that the labour market is still showing resilience.

Fed speakers this week have said suggested that the strength in the labour market could be a reason to keep hiking rates. Meanwhile, Fed governor Christopher Waller said he doesn’t see signs that inflation is declining.

The markets have seen high levels of volatility as Fed speakers have sounded hawkish across the week as the future path of inflation and interest rates remain a dominant theme. Given that the Fed got it so wrong with transitory inflation, maybe we see those errors back haunting the Fed.

Earnings continue to roll in with reports from PayPal, Unilever, Warner Music, Credit Suisse, PepsiCo and Disney.

Corporate news

Disney has jumped over 6% higher pre-market after better-than-expected Q1 results and as returning CEO Bob Iger laid out plans to cut costs. Disney posted EPS of $0.99 ahead of the forecasts of $0.79. Revenue came in at $23.51 billion, ahead of the $23.43 billion forecast. The company plans to slash 7000 jobs as part of a drive for efficiency.

Credit Suisse drops 7% after reporting an annual loss of CHF7.29 billion, its worst since the 2008 financial crisis and its second straight yearly loss. The bank blames challenging conditions and significant outflows.

Where next for the Nasdaq?

After a strong rally from the 10685 low, the price is consolidating above 12400. The rise above the 50, 100 & 200 sma & the multi-month falling trendline, combined with the RSI below 70, supports further upside. Buyers will look for a rise over 12900 to extend the bullish run towards 13200, the August 26 high. On the flip side, immediate support can be seen at 12400, the weekly low, with a break below here bringing 12200 the December high into play, ahead of the 200 sma at 11900.

FX markets – USD falls, GBP rises

The USD is falling, extending losses from yesterday, dragged lower by the improved market mood. As a result the USD has struggled to benefit from the hawkish Fed commentary.

GBP/USD is rising, pushing above 12150 as Bank of England policymakers aired their views on inflation before the Treasury select committee. Policymakers’ opinions varied greatly on how quickly inflation could fall. BoE governor Andrew Bailey sees inflation falling quickly in the second part of the year but said rates could well rise higher first. Meanwhile, Jonathan Haskel said that he remains ready to act forcefully to rein in inflation.

EUR/USD is rising, capitalizing on the softer USD and shrugging off German inflation data which showed that inflation unexpectedly fell in January to 9.2%, down from 9.6% in December and significantly below forecasts of 10%. Instead, the euro is finding support from the slew of hawkish ECB speakers this week, who have indicated more rate hikes are required.

GBP/USD +0.9% at 1.2184

EUR/USD +0.15% at 1.0787

Oil steadies after strong gains

Oil prices are edging lower after four straight days of gains as optimism over recovering Chinese demand is offset by rising U.S. oil inventories.

According to the EIA, oil stockpiles in the US rose to the highest level since June 2021 thanks to higher production. Meanwhile, rain and distillate inventories also rose last week, raising some doubts over demand in the world’s largest consumer of oil.

Still, demand from China is expected to ramp up in the coming months as the economy continues to reopen, which is expected to support the demand outlook and, the price.

on the supply side concerns over Turkey’s oil exports amid disruption following Monday’s earthquake have also underpinned the oil price, helping it gain 7% so far this week.

WTI crude trades -0.7% at $78.07

Brent trades at -0.6% at $84.23

Learn more about trading oil here.

Looking ahead

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