Dow Jones Outlook: Stocks edge lower after last week's gains
US futures
Dow futures -0.28% at 34444
S&P futures -0.06% at 4503
Nasdaq futures +0.12% at 15591
In Europe
FTSE -0.36% at 7290
Dax -0.2% at 16020
- US indices ease after strong gains last week
- US earnings season in focus
- USD steadies around a 15-month low
- Oil falls after weak China GDP data
China GDP hurts sentiment
US stocks are set to fall at the start of the week after China’s GDP data hurt sentiment and after a strong rally in the previous week.
US indices jumped last week, boosted by softer-than-forecast inflation data supporting views that the Fed’s rate hiking cycle is reaching its peak soon.
China data showed that growth missed forecasts with GDP rising 6.3% on an annual basis in Q2, below the 7.3% forecast, raising worries of a slowing recovery in the world’s second-largest economy. While industrial output was robust, retail sales the property sector disappointed.
The US economic calendar is quiet today, with just NY state manufacturing index, which unexpectedly rose to 1.1 in July from 6.3 in June, beating forecasts of -4.3.
Attention is now turning towards earnings season, which kicked off on Friday with the likes of Citibank, JP Morgan, and Black Rock. This week sees big names such as Tesla, Netflix, IBM, Goldman Sachs, and Bank of America update the market.
Corporate news
Activision rises 4% pre-market and Microsoft 0.1% after the latter agreed to keep Call of Duty on Sony’s PlayStation console, a move that could overcome a key hurdle in an antitrust investigation in Europe.
Tesla rises 2.2% after announcing that it had built its first Cybertruck in China after a 2-year delay.
Dow Jones outlook – technical analysis
The Dow Jones hovers just below 34600 last week and is hovering just below here as the new week begins. The price trades at the upper end of a rising triangle, which combined with the RSI above 50 keeps buyers hopeful of further upside. A rise above 34600 creates a higher high and open the door to 34940 the December high. Failure to break above 34600 could see the price test support at 34100 the 20 sma ahead of 33600 the July low.
FX markets – USD falls, GBP, EUR holds steady
The USD is falling, extending losses from last week as the market prices in just one more rate hike this year.
EURUSD is holding steady at 1.1230 in a quiet start to the week. The market has been unmoved by speeches by ECB President Christine Lagarde and ECB chief economist. The price remains supported by expectations of two more rate hikes from the ECB.
GBPUSD is hovering around $1.31 at the start of the week after rising to $1.3144 last week as the market bets that the BoE will keep hiking rates to tame inflation which remains elevated. CPI data is due on Wednesday and is expected to show that CPI remains sticky at 8.2%
EUR/USD +0.7% at 1.1235
GBP/USD +0.1% at 1.3080
Oil falls after weaker China GDP data
Oil prices are falling on Monday, extending losses after China’s GDP data raised concerns over the health of the economic recovery and as Libya resumed production this weekend after output cuts last week.
China’s Q2 GDP rose 0.8% QoQ, down from 2.2% growth in Q1 raising concerns that the recovery in China, the world’s largest importer of oil, is losing steam.
Earlier in the session, oil prices briefly spiked higher after an announcement from Saudi Arabia that it would cut oil production. The announcement was quickly withdrawn, noted as a repeat of the June 4th oil output cut announcement.
The fall in oil prices comes after strong gains last week. Oil booked the third straight week of gains amid a weaker USD, on hopes that a less hawkish Federal Reserve could lower the risk of a recession in the US and as Libyan output fell.
Two of the three Libyan oilfields that were shut last week resumed production over the weekend.
WTI crude trades -1.5% at $74.25
Brent trades at -1.5% at $78.63
Looking ahead
N/A
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 www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024