US open: Stocks surge as inflation drops
US futures
Dow futures +2.35% at 33270
S&P futures +3.6% at 3868
Nasdaq futures +4.2% at 11252
In Europe
FTSE +0.9% at 7285
Dax +2.41% at 14000
Learn more about trading indices
Inflation & core inflation fall
US stocks are surging higher after inflation falls by more than expected and jobless claims rise by more than expected.
US CPI dropped to 7.7% YoY, down from 8.2% in September, as it continues to trend lower from August’s 9.1% peak.
Core inflation which strips out the more volatile items, such as food and fuel, fell to 6.3%, down from 6.6% in September.
The market is now pricing in a probability of the Fed hiking rates by 50 basis points in the meeting on December 14th by 80%, up from 52% prior to the data.
Looking at the labour market, jobless claims also rose by more than expected to 225k, up from 218k.
This is the data that the market has been waiting for: a strong sign that price pressures are falling and weakness could be seeping into the labour market.
Corporate news:
Rivian trades 8% higher pre-market after reporting a smaller-than-forecast loss and a larger-than-expected number of pre-orders whilst reiterating its full-year outlook.
Meanwhile, NIO, is falling pre-market after the Chinese EV maker reported a wider net-loss Q3 as input costs rose sharply, squeezing margins.
Where next for the Nasdaq?
The Nasdaq remains capped by the 20 sma, trading caught between the 20 sma at 11100 and 10640 on the lower band, the November low. The RSI is just below 50. Sellers could look for a breakout below support at 10600, the November low, ahead of 10430 the 2022 low. Should buyers push over the 20 sma, the 50 sma at 11540 comes into focus ahead of 11700 the October high.
FX markets – USD drops GBP surges
The USD is falling sharply as the market digests the cooler-than-forecast inflation, and re-prices expectations for a less aggressive Federal Reserve
EURUSD is surging on the back of the weaker USD. The price has surged back over parity as the ECB is expected to hike by 75 basis points in the next meeting.
GBPUSD is rising to rebound after steep losses yesterday; even so the outlook for the UK remains bleak. Data shows that the housing market is starting to show cracks and consumer confidence is on the floor. On a positive note, reports that the UK and Europe are close to a breakthrough in a long-running spat.
GBP/USD +2.1% at 1.16
EUR/USD +1% at 1.0115
Oil falls as China COVID fears rise
Oil prices are falling for a fourth straight day amid rising concerns over the COVID picture in China.
Mass testing in Guangzhou, the manufacturing hub, is making the market nervous. This is often the precursor for lockdowns in the country, which continues with its strict zero-COVID policy. Recent rumors that Beijing could be considering exiting the strategy have pretty much been put to bed now, which has been reflected in the falling oil price. This combined with the recent dollar revival, are keeping oil prices under pressure and could continue to do so.
WTI crude trades -0.7% at $84.60
Brent trades -0.5% at $91.6
Learn more about trading oil here.
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