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: Wall Street opens higher despite a sharp slowdown in Q3 GDP

Article By: ,  Senior Market Analyst
October 28, 2021 1:54 PM

US futures

Dow futures +0.23% at 35580

S&P futures +0.31% at 4566

Nasdaq futures +0.54% at 15680

In Europe

FTSE -0.2% at 7233

Dax -0.25% at 15657

Euro Stoxx +0.19% at 4227

 

Manufacturers earnings reflect supply bottleneck, except Ford

US stocks are set to open higher on Thursday as investors weighed up more corporate earnings against the latest growth data.

On the earnings from Ford trades 10% higher pre-market after an earnings beat and raising its guidance for the year. The car maker actually attributed its stronger Q3 results to increased availability of semiconductor chips. This update is in stark contrast to other manufacturers earlier in the week. General Motors for example saw a 40% drop in profits owing to supply chain bottlenecks and chip shortages.

On the data front, economic growth slowed significantly in the third quarter. The reopening boom has been dampened by supply chain issues, labour shortages and rising energy prices in the July – September period. The Q3 GDP came in at 2% QoQ, down sharply from the 6.7% in the second quarter and well short of estimates of 2.7%.

On a more upbeat note the labour market improved again with jobless claims dropping to a fresh post pandemic low of 281k, down from 290k the previous week.

The mixed data plus weaker energy prices have pulled Dow futures off overnight highs, although they remain in positive territory. The tech heavy Nasdaq look set to outperform. Earnings season so far has been a tale of 2 sectors. Whilst tech continue to power higher on strong earnings, manufacturers are likely to miss forecasts, and lower guidance reflecting the supply chain issues.

Where next for the Nasdaq?

The Nasdaq continues to trade above the rising trendline with the RSI supporting further gains. Bulls are looking for a break above 15700 for fresh all time highs. Support can be seen at 15525, 15230 the 50 sma. A move below 15000 100 sma could see sellers gain traction.

FX – USD tip toes higher

The US Dollar has dropped sharply lower after weaker than forecast Q3 GDP. Sell off suggests that investors expect the Fed to hold off on rate hikes.

EUR/USD trades mildly higher after the ECB, as expected, kept monetary policy on hold. All eyes are on the ECB press conference where Christine Lagarde is expected to comment on bond buying as inflation sits at a 13 year high.

GBP/USD +0.08% at 1.3750

EUR/USD +0.22% at 1.1626

Oil extends losses on Iran talks, rising inventories

Oil prices are heading extending losses and hit a two week low after Iran announced that talks regarding its nuclear programmme would resume by the end of November and after US crude inventories by much more than expected.

A deal between Iran and the West could pave the way for the removal of oil sanctions imposed by Trump. This isn’t the first time that talks between the West and Iran have caused a sell off in the oil markets. Even if talks went well, it could be a long time until before Iranian oil reaches the markets again. Investors are using this as a good excuse to book profits after an incredible rally in oil prices.

Separately crude oil stocks rose by 4.3 million more than double the 1.9 million barrels forecast. Meanwhile gasoline inventories fell to their lowest in almost three years.

WTI crude trades -2.18% at $80.60

Brent trades -1.92% at $82.31

 

Looking ahead

14:00 US Pending home sales

 

 

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.

 

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