CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

US open: Stocks rise as China eases COVID restrictions

Article By: ,  Senior Market Analyst
June 28, 2022 2:00 PM

 

 

US futures

Dow futures +0.43% at 31548

S&P futures +0.85% at 3825

Nasdaq futures +0.27% at 12033

In Europe

FTSE +1% at 350

Dax +0.5% at 13282

Euro Stoxx +0.7% at 3567

Learn more about trading indices

Consumer confidence data due

US stocks are set to open higher after booking mild losses in the previous session and upbeat China COVID reports.

China has reduced its quarantine requirements for international travelers, boosting optimism that the worst has passed. Easing COVID restrictions, investors hope will improve global supply chain issues and help lower the possibility of a global recession.

Commodity prices rose on the news with iron ore and copper reversing losses while oil gained. Mining and energy stocks are likely to be the largest gainers as well as airlines, following in the footsteps of European trade.

Looking ahead attention is on US consumer confidence, which is expected to fall again in June to 100.4, down from 106.4. The data comes after Michigan consumer confidence dropped to a record low. Surging prices and the growing risk of a recession are taking their toll on US consumer morale.

Even so, the Federal Reserve will continue with the rate hike program irrespective of consumer sentiment. Whilst Americans have voiced increasing dissatisfaction with their personal economic situation, however, so far, their spending habits are little changed. This would be expected to change soon.

The US economy could well be heading for a recession. The weaker consumer confidence is in June, perhaps the more likely that the US will be heading for a recession

In corporate news:

Nike is falling premarket after forecasting Q1 revenue below estimates. The sportswear retailers expect to discount more and deal with further pandemic-related disruptions in China, its most profitable market.

Major banks are rising after passing the Federal Reserve’s stress test, which has prompted some to hike their dividends.

Where next for the S&P 500?

The S&P500 continues to extend its rebound from 3635 the 2022 low. The rise over the 20 sma combined with the bullish crossover on the MACD is keeping buyers hopeful of further upside. Resistance can be seen at 4025 with a break above here opening the door to 4100 the February low ahead 4200 the June high. Should the 20 sma fail to hold, the price could fall to test support at 3800 the May low ahead of 3635 the 2022 low.

FX markets – USD edges lower

USD is rising ahead of key data after falling for the past three days. Recession fears and expectations that the Fed won’t be able to hike rates aggressively had pulled the greenback lower. Investors are looking at consumer confidence data for clues over the health of the US economic outlook

EURUSD is edging mildly lower after data showed that German consumer sentiment fell to an all-time low in July. The GFK index saw consumer sentiment fall to -27.5, down from -26 as the surging cost of living and rising risks of a recession hurt morale.

GBP/USD is falling as the pound is dragged lower by Brexit and political woes. Attention will be on BoE’s Bailey who is duet o speak later. Hawkish commentary from Bailey could see the pound rebound.

GBP/USD  -0.18% at 1.2237

EUR/USD  -0.07% at 1.0574

Oil extends gain on supply concerns

Oil prices are rising gains today, extending gains from the previous session. Oil prices rose yesterday after G7 leaders announced plans to extend sanctions on Moscow to include a price cap on Russian oil. Rather than bringing the price down, it is likely to drive Russian oil increasingly towards China and India, tightening supply in Europe.

As attention turns towards OPEC+ which meets to discuss output later this week concerns over spare capacity are ramping up. Reports suggest that Saudi Arabia and the UAE are unable to boost production much more as they are already close to capacity limits. These are the only two countries which could potentially make up for lost Russian supply and weak output from other OPEC countries.

WTI crude trades +0.8% at $109.56

Brent trades +0.8% at $113.22

Learn more about trading oil here.

Looking ahead

15:00 US consumer confidence

21:30 API crude oil stock piles

 

 

 

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024