US Open: Stocks edge higher ahead of housing & consumer confidence data

US futures

Dow futures +0.17% at 32950

S&P futures +0.14% at 3990

Nasdaq futures +0.15% at 12109

In Europe

FTSE +0.17% at 7939

Dax +0.34% at 15464

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Stocks fall across February

US stocks pointing to a mildly stronger start, extending gains from the previous session. However, the upside looks limited and US stocks are set to register a monthly loss.

Investors remain concerned that the resilient economy and strong jobs market will mean that the Federal Reserve will need to raise interest rates higher and for longer in order to tame inflation, which is proving sticker than expected. Both the CPI and US core PCE came in ahead of forecasts in January.

Similar concerns exist in Europe after France and Spain’s inflation came in ahead of forecasts.

Looking ahead there is still plenty of data for investors to be focusing on, including house price index which come amid cautious signs of a revival in the housing market. Recent new and pending home sales were stronger than expected.

Consumer confidence data will also be in focus and is expected to rise again to 108.5, up from 107.1. This will continue an improving trend that has been in place since July. Strong consumer confidence could raise concerns of further inflationary pressures from a consumer happy to spend.

Corporate news

Zoom surges after Q4 earnings and revenue beat estimates. The video communication company posted revenue of $$1.12 billion and EPS of $$1.22, beating forecasts of $1.10 billion and $0.81, respectively.

Target shares slip pre-market after posting better than expected Q4 earnings but waned over a slowdown as consumers continue to prioritize necessities. Target posted EPS of $1.89 on revenue of $31.4 billion, beating expectations of $1.40 on revenue of $30.65 billion.

Where next for the Nasdaq?

The Nasdaq found support on the 200 sma and is currently trading in consolidation mode, capped on the downside by 11900 the 200 sma and on the upside by 12215 the December high and Thursday 23^rd high. The RSI is neutral at 50. A break below the 200 sma would extend the fall away from the February high of 12900, exposing the 50 sma at 11775 and the 100 sma at 11575. On the flip side a rise above 12215 could be the start of a recovery in the price, which could then look towards 12750, last week’s high.

FX markets – USD steadies, GBP, EUR rise

The USD is holding steady amid a cautious market mood and after more hawkish commentary from Federal Reserve Governor Philip Jefferson, who said that inflation remains stubbornly high, fueling bets of further rate hikes.

EUR/USD is after both Spanish and French inflation came in higher than expected. Spanish CPI rose to 6.1%YoY in February, and France’s CPI rose to a euro-era record of 7.2% as food and services costs increased. The data piles pressure on the ECB to continue hiking rates aggressively to tame inflation.

GBP/USD is rising, boosted by the Northern Ireland post-Brexit trade agreement between the UK and the EU. The deal should improve relations with the EU whilst also reducing the probability of a trade war with the EU. This means business investment is likely to increase which is good news for economic growth.

EUR/USD +0.08% at 1.0610

GBP/USD +0.28% at 1.2095

Oil rises ahead of API data

After prices are heading higher, reversing losses from the previous session as hopes of a solid economic recovery in China overshadowed concerns of further US rate hikes slowing growth and dampening the oil demand outlook.

Investors are looking toward key Chinese economic data, which is due to be released over the coming days, which could highlight the rebound in economic activity since strict zero-Covid rules were ended in December.

Attention will also be on the API inventory report, which is expected to show that crude stockpiles grew by 400,000 barrels in the week to February the 24^th. This would mark the 10th straight week of inventory builds and could cap the upside on oil prices.

WTI crude trades +1.5% at $76.84

Brent trades at +1.2% at $83.06

Learn more about trading oil here.

Looking ahead

14:00 US housing price index

15:00 US consumer confidence

15:30 Fed Goolsbee speech