US Open: Stocks rise cautiously with all eyes on Powell's testimony

US futures

Dow futures +0.07% at 33440

S&P futures +0.13% at 4052

Nasdaq futures +0.25% at 12335

In Europe

FTSE -0.17% at 7930

Dax 1% at 15470

Learn more about trading indices

Powell testifies before Congress

US stocks point to mild gains in cautious trade as investors shy away from taking out big positions ahead of Federal Reserve Chairman Jerome pounds congressional testimony this week.

Today the ahead of Federal Reserve will appear before the Senate Banking Committee he will face the House Financial Services committee. Powell will likely be grilled on the Fed’s steep rate hiking cycle and the US economy’s ability to withstand the hikes without tipping the economy into recession or the likelihood of a recession in the US.

The timing of this testimony more crucial after a series of stronger-than-expected data across February has seen more hawkish commentary from Fed speakers and investors ramping up their rate hike expectations. Investors will be looking for any clues over the potential size of the rate hike, with the market now pricing in around a 30% probability of a 50 basis point rate hike. This is up from a 0% likelihood just over 1 month ago.

A hawkish-sounding Powell could drag stocks and Gold lower while boosting Gold. Meanwhile, should Powell focus on the disinflation process, as he did in the previous Fed conference, then stocks could head higher, with Gold while bringing the USD lower.

These testimonies, combined with Friday’s jobs report, will likely set the tone for trading over the coming weeks until the FOMC.

Corporate news

Meta rises pre-market on reports that the social media platform plans to cut thousands more jobs as soon as this week. The reports come just a few months after Meta announced 11,000 job cuts amid a move to flatten its structure and reorganise and downside efforts.

Where next for the Nasdaq?

After rebounding off the 50 sma the Nasdaq is testing resistance at the 20 sma 12275. The 50 sma is set to cross above the 200 sma in a bullish signal. The RSI is also supportive of further gains. However, buyers would need to rise above 12467, yesterday’s high, to extend gains towards 12900 the February high, creating a higher high. Should buyers fail to defend the 20 sma, sellers could look to take out 12000 round number and test 11920, the golden cross level, ahead of 11835 the March low. A fall below here creates a lower low.

FX markets – USD rises, EUR falls

The USD is Rising after losses in the previous session as investors look ahead to Powell’s testimony later today. The greenback is rising despite treasury yields falling away from 4%, the 3-month high reached last week.

EUR/USD is easing Back from a two-week high of 1.07 reached on Monday amid renewed U.S. dollar strength, the euro is shrugging off German factory orders, which unexpectedly rose by 1% in January ahead of expectations of a 1% decline. The euro has broadly remained supported by hawkish ECB comments with policymakers pointing to further rate hikes beyond the expected hike in March.

GBP/USD Is heading lower as investors shrug off data that showed that house prices jumped unexpectedly in February, Reflecting improvements in consumer confidence and the mortgage market. house prices rose 1.1% MoM, after a 0.2% rise in January.

EUR/USD -0.19% at 1.0660

GBP/USD -0.14% at 1.20

Oil steadies ahead of API data & Powell’s testimony

After rising over 1% in the previous session oil prices are holding steady on Tuesday as investors supply concerns offset any worries ever China dim and on certainties.

The Chevron CEO yesterday said that there's not a lot of swing capacity in oil markets, His remarks appeared to spark a rally in oil prices.

the reality is that supply from Russia remained a wild card and is the big unknown for 2023. Russia has said that it will cops apply by 25% this month keeping the supply side tight.

Meanwhile oil trade data from China showed that crude oil imports during anyway and February fell by 1.3% YoY to 109.4 million barrels. However imports have been accelerating in February pointing to a recovery in fuel demand.

looking ahead the API oil inventory data will be in focus as well as the comments from Fed Chair Powell. Hints of higher interest rates for longer could hurt the oil demand outlook.

WTI crude trades -0.2% at $80.30

Brent trades at -0.3% at $85.82

Learn more about trading oil here.

Looking ahead

15:00 Fed Powell speech

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.