US open: Futures mixed after Powell re-nomination, PMIs due

US futures

Dow futures +0.06% at 35648

S&P futures -0.04% at 4681

Nasdaq futures -0.21% at 16348

In Europe

FTSE -0.06% at 7260

Dax -0.73% at 16017

Euro Stoxx -0.5% at 4315

Learn more about trading indices

Rotation out of high growth tech after Powell re-nomination

US stocks are set for a mixed open on Tuesday with the Nasdaq underperforming its major peers following the re-nomination of Fed Chair Powell for another 4 years at the head of the US central bank.

News of the announcement yesterday sent bond yields higher on expectations that Powell and the Fed could adopt a more aggressive approach to tightening monetary policy, with possibly 2 interest rate hikes next year.

Whilst such a move is supportive of cyclical stocks, high growth stocks which are particularly sensitive to higher interest rates plummeted lower. The Nasdaq closed yesterday -1.2% lower whilst the Dow Jones, which is more closely associated to cyclicals closed on higher ground.

The rotation out of high growth and into cyclicals is seeing some follow through today.

Attention is now turning towards US PMI data which is due shortly. Expectations are for business activity in November to tick higher to 59 for both the manufacturing and services sector. If European data is anything to go by then expect some upbeat numbers. A strong reading could add to speculation of a more hawkish Fed, lifting the USD whilst hurting the high growth Nasdaq.

Stocks in focus

In corporate Zoom is under the microscope whilst falling over 9% pre-market. The video-conference platform provider added fewer large clients and saw revenue growth slow to 35% in Q3, down from 360% this time last year as people returned to work in offices.

Where next for the Nasdaq?

After reaching an all time high of 16768 yesterday the Nasdaq was then slammed lower. The price broke below support at 16450 negating the near-term uptrend and broke below the month old rising trendline. The price is currently testing the 50 sma on the 4 hour chart at 16325. The RSI is bearish territory supportive of further downside. A move below the 50 sma is needed to expose the 100 sma at 16220. A move below 15900 would see the bias change to bearish. Should the 50 sma hold buyers will look to regain 16450 for a chance to target the all-time high.

FX – USD extends gains, EUR rises from 20-month low

The USD is edging higher, building on yesterday’s gains following the re-nomination of Fed Chair Powell and a potentially more hawkish Powell as the recovery gathers speed.

EUR/USD is rebounding off a 20-month low after better-than-expected PMI data. The Eurozone composite PMI unexpectedly rose in November to 55.8, up from 54.2 and ahead of the 35.1 forecast. The data suggests that the Eurozone still saw decent growth in November despite rising headwinds. Price pressures have continued to mount in the survey which is prompting bets that the ECB could move to start tapering bond purchases soon.

GBP/USD -0.37% at 1.3350

EUR/USD -0.02% at 1.1236

Oil extends declines on supply & demand concerns

Oil prices are heading lower after the US announced that it will release 50 million barrels of oil from its emergency reserves over the coming months in a bid to cool market prices. The move comes after OPEC shrugged off repeated requests by global leaders to increase output amid surging demand. President Biden had seen his popularity slip as petrol prices increased.

The question now is how will OPEC respond? The oil cartel has said that they are concerned of an oil glut next year and have already downgraded their demand outlook for Q4. Could OPEC consider reining in supply in light of Biden’s actions? For that we will need to wait until the next OPEC meeting at the start of December.

For now, API inventory data will be in focus.

WTI crude trades -0.3% at $76.40

Brent trades -0.1% at $79.01

Learn more about trading oil here.

Looking ahead

14:45 Manufacturing & services sector PMIs

21:30 API crude oil inventories

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 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.