Wall Street is edging higher after steep losses across September. Whilst the macro picture remains troubling bargain hunters are out once again. US ISM manufacturing and Michigan consumer confidence due next.
- Dow futures +0.46% at 34000
- S&P futures +0.25% at 4320
- Nasdaq futures +0.2% at 14720
- FTSE -0.73% at 7047
- Dax -0.5% at 15226
- Euro Stoxx +0.01% at 4047
Bargain hunters out in force
US stocks pointing higher as a slew of upbeat corporate updates help to calm investors nerves over rising inflation, slowing growth and the Fed tapering.
Bargain hunters are back on the scene for a second time this week after a combination of factors such as stagflation, the reining in of stimulus and setbacks for Biden’s spending plans sent stocks sharply lower on Thursday.
Its’ a bit of a relief to have September in the rear-view mirror. September is traditionally a poor month for equities and this September certainly didn’t disappoint there. US indices dropped sharply with the tech heavy Nasdaq taking the hardest hit as expectation rose that the Fed could move sooner to raise rates.
However, with many of the macro themes which have dragged on stocks set to rollover into October the outlook remains troubling.
Attention will now turn to US ISM manufacturing numbers along with Michigan consumer confidence.
Where next for the S&P500?
The S&P 500 closed below its 100 sma for the first time since November. Whilst the RSI points to further losses, the hammer candlestick formation is keeping the buyers optimistic. Any meaningful recovery needs to retake 4350 in order to target 4400. On the downside the next key level can be seen at 4230 the July low ahead of 4200 round number.
FX – USD eases, UK Mfg PMI beats forecasts
The US Dollar is falling lower but is still set to book its strongest week of gains since June. The Greenback traced treasury yields higher amid expectations that the Fed could start tightening monetary policy sooner than its peers as inflation remains stubbornly high. Fed Chair Powell acknowledged that inflation could remain elevated for longer than the Fed anticipated.
GBP/USD The Pound is capitalizing on the weaker USD, extending its recovery from the recent 9-month lows, finding support from better than forecast manufacturing PMI data, which slowed by less than expected in September to 57.1, down from 60.3, but ahead of the 56.3 forecast.
- GBP/USD +0.4% at 1.3540
- EUR/USD +0.25% at 1.1606
Oil falls on potential OPEC output increase
Oil lower on the day amid reports that OPCE+ producers could ramp up the planned increase in production in order to ease supply concerns. The OPEC+ group are to meet on Monday and could be considering a 400,000 barrels per day additional increase to supply each month.
Both benchmarks edged lower on the report. However, still continue to trade around recent highs and are set to book gains across the week, the sixth straight week of gains.
Demand is expected to outstrip supply by 1.5 million barrels per day for the next 6 months according to Citigroup, keeping prices buoyant. However, the stronger US Dollar has acted as a drag.
- WTI crude trades -0.34% at $74.63
- Brent trades -0.27% at $78.06
- 14:45 Markit Manufacturing PMI
- 15:00 ISM Manufacturing
- 15:00 Michigan consumer confidence
- 18:00 ECB Baker Hughes rig count