US open Futures mixed consumer spending falls oil rises

US futures

Dow futures +0.3% at 32732

S&P futures +0.2% at 3922

Nasdaq futures -0.1% at 12765

In Europe

FTSE +0.6% at 6717

Dax +0.9% at 14741

Euro Stoxx +0.3% at 3825

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Biden pledges a faster vaccine rollout

US stocks are pointing to a mixed start, with the Dow and S&P set to extend gains from the previous session, whilst the Nasdaq points to a weaker start as the rotation into value and out of growth continues.

Two Fed speakers giving a bullish outlook, an upwardly revised Q4 GDP, the lowest initial jobless claims for a year and Biden pledging to accelerate the US vaccine programme are giving risk assets a shot in the arm on Friday.

Biden announced that he is now targeting 200 million jabs in his first 100 days in office after the initial 100 million was reached.

Whilst the US economy appears to be firmly on the right path to recovery, this is in stark contrast to the EU where cases are on the rise and lockdown restrictions tightening. Cases are also on the rise in India & South America.

Stocks in focus

Banking stocks are expected to be in focus after the Fed announced later yesterday that financial institutions can resume buybacks and raise dividends in the second half of the year, pending June’s stress test. The move is another sign that the US economy is moving in the right direction.

Morgan Stanley trades +1.8% pre-market

JP Morgan Chase trades +0.9% pre-market

Citigroup trades +0.9% pre-market

Nio ADR trades -7.9% pre- market after announcing that it will halt manufacturing for 5 days at its Hefei plant due to a shortage of semiconductor chips. It also cut its quarterly delivery forecast to 19,500 vehicles compared with 20,000 and 20,500 previously expected.

Where next for NIO ADR price?

Nio share price rallied to a all time high at 67.00 at the start of the year. The stock has been trending steeply lower since early February.

It trades below its 50 & 100 sma on the daily chart and below its 6 week descending trend line indicating a bearish trend.

The RSI is also supportive of further downside, below 50 but still above the oversold level of 30.

However, the bears need to break through support at 34.80 the low March 8 and today’s low. A break below this level could see the sellers gain momentum towards 30 round number and 29.15 resistance from October 15.

Failure to break below 35.00 could see the price retrace towards the descending trendline at 40.00 before targeting 46.00 high March 15, 11. A move above here could negate the brearish trend.

US consumer spending falls

US consumer spending fell by more than expected in February amid a cold snap and as the boost from January's stimulus check faded. The decline is expected to be temporary given that further stimulus checks are coming.

Personal Consumption Expenditure (PCE) the Fed’s preferred measure of inflation missed forecasts rising 0.2% MoM in February, missing forecasts of 0.5% and down from January’s 0.3%. Core PCE rose 1.4% YoY also missing forecasts.

Personal income came in better than expected -7.1%, after a 10% rise in January following the latest round of stimulus checks.

FX – US Dollar eases back from 4 month highs

The US Dollar is easing back from 4 month high as the risk on mood sees safe haven outflows.

GBP/USD – is pushing higher for a second day following upbeat retail sales. Retail sales rose 1.2% in line with expectations after rebounding from -8.2% in January. Data shows consumers are starting to spend ahead of the UK economy reopening.

Investors will now look ahead to the release Michigan consumer confidence.

GBP/USD +0.25% at 1.3766

EUR/USD trades +0.16% at 1.1780

Oil rises on Suez blockage

Oil trades higher paring some losses from the previous session, with volatility remaining high. The continued blockage of the Suez Canal is lifting oil prices higher. Experts believe it will take until Thursday next week to remove the wedged vessel.

Oil markets have been weighing up the Suez Canal block against rising demand concerns as covid cases rise in Europe and key developing countries.

US crude trades +2.5% at $60.02

Brent trades +2.2% at $63.36

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

14:00 Michigan consumer confidence

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