US open Stocks stabilize Elons aboutface

US open: Stocks stabilize, Elon’s about-face

US futures

Dow futures -0.3% at 33415

S&P futures +0.0% at 4060

Nasdaq futures +0.4% at 13054

In Europe

FTSE -1.7% at 6889

Dax -0.9% at 15020

Euro Stoxx -0.9% at 3911

Stocks stabilize after yesterday’s inflation rout

Major US indices are poised to open near flat after the Dow Jones Industrial Average saw its biggest decline since January on yesterday’s US CPI reading showING prices rose 4.2% over the same period last month, the highest reading since 2008. Sorting by market cap, every one of the 34 largest US stocks fell yesterday, and traders would have to scroll all the way down to Pfizer to find a large company that didn’t fall amidst the broad-based selling pressure.

After yesterday’s price action, readers should expect to hear traders, economists, policymakers, and pundits endlessly debate whether the unexpected spike in prices was due to short-term “transitory” factors or a secular rise in inflation until we get next month’s CPI report (June 10 for those following along at home).

Separately, European indices are on the back foot amid half-holiday trade with countries like Germany and France off for Ascension Day.

Initial jobless claims

The weekly report on new unemployed Americans showed “just” 473k new claimants. This is the lowest reading in more than a year, and combined with yesterday’s hotter-than-expected CPI report, signals that the US economy is fitfully returning to normal. Friday’s retail sales report will be the next major data point to watch out of the world’s largest economy.

Tesla’s about-face on Bitcoin

Mercurial billionaire Elon Musk surprisingly announced yesterday afternoon that Tesla Motors would no longer accept Bitcoin for payment for its vehicles, citing the environmental cost of the cryptoasset. The impact on Bitcoin was severe, with the cryptoasset falling a full $10,000 before recovering slightly to trade near $50,000 as of writing, but the traders seem to be cheering the move from Tesla’s perspective, with the EV manufacturer poised to open 1% higher.

Technically speaking, TSLA is trading near the bottom of its 6-month range, with potential support levels coming in at the 200-day EMA ($580), as well as previous support levels at $540 and previous-resistance-turned-support at $500.

Source: TradingView, StoneX

FX – CHF and EUR outperform, AUD lags

It’s been a relatively quiet day in the FX market so far, with the euro and Swiss franc topping the relative performance charts while the Australian dollar brings up the rear. Traders will tune into speeches from the heads of the Bank of Canada (at 11:00 EDT) and Bank of England (12:00 EDT) as possible risk events, but more generally, the FX market should take its cue from equities and general risk appetite following yesterday’s big risk-off move.

EUR/USD +0.2% to 1.2090

GBP/USD -0.1% at 1.4040

Oil slips on restoration of US supply, ongoing COVID hit to India’s demand

Oil is trading lower as the disrupted Colonial Pipeline resumed operations on the US East Coast. The pipeline operator stated that “all lines, including those lateral lines that have been running manually, will return to normal operations.”

Seperately in India, the world’s third largest importer of oil, fuel consumption fell nearly 10% in April relative to March. With the ongoing COVID crisis continuing unabated, the demand shock to India may take longer to resolve and keep oil prices under pressure in the near-term.

US crude trades -2.0% at $64.76

Brent trades -1.7% at $67.86

The complete guide to trading oil markets.

Looking ahead

15:00 GMT – BOC Governor Macklem speech

16:00 GMT – BOE Governor Bailey speech

17:01 GMT – 30-year US bond auction

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.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.