Tue, Jan 31, 2023 @ 22:48 GMT
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Stocks Rise But Set for Weekly Losses

US stocks are edging higher after a rough week.

US futures

  • Dow futures +0.35 % at 34707
  • S&P futures +0.22% at 4513
  • Nasdaq futures +0.18% at 14562

In Europe

  • FTSE +1.2% at 7635
  • Dax +1.22% at 14250
  • Euro Stoxx +1.4at 3856

Bargain hunters help lift stocks

US stocks are edging higher after modest gains in the previous session. As bargain hunters came out to snap up some deals. Even so, stocks are still set to fall across the week amid increased expectations of a more aggressive Fed, with the Nasdaq set to book the largest declines.

Oil prices are also stabilizing at around $100 which is also bringing a sense of calm to the markets after a volatile start to the week.

There is little in the way of economic data scheduled for today. Investors will start to look ahead to the earnings season which kicks off next week with Banks.

The big banks are expected to show a sharp decline in earnings as deal-making slowed and amid exposure to Russia. However, the prospect of higher net interest income could as banks benefit from higher interest rates could help to offset some weakness.

In corporate news:

Tesla rose 0.2% after the EV maker opened its $1.1 billion factory in Texas, home to the new headquarters.

Robinhood trades over 4% lower pre-market after Goldman Sachs downgraded its stance to sell from neutral owing to fading interest.

FX markets USD rises, EUR falls again

USD is rising as it continues to be boosted by hawkish Fed expectations. The US Dollar index hits 100 for the first time in 2 years as the market prices in a steeper path to policy normalization.

EUR/USD is falling for a seventh straight session ahead of the first round of French Presidential elections this weekend. While Macron is the favorite to win the market has suddenly realized that Marine Le Pen has closed the gap in the polls.

GBP/USD trades at the lowest level since mid-March as concerns rise that the BoE could tip the UK into recession if it acts too aggressively to hike interest rates.

  • GBP/USD -0.36% at 1.3030
  • EUR/USD -0.14% at 1.0863

Oil set for weekly losses

Oil prices are heading lower on Friday, marking the fourth straight day of declines. Oil prices are set to fall 3% across the week, after falling 15% across the previous week.

Supply concerns have eased considerably over the past two weeks after EIA countries announced the release of huge amounts of strategic reserves in order to plug the gap left by the absence of some Russian supply into the market. This combined with the ongoing lockdown in Shanghai is keeping oil below $100 per barrel.

Prices are likely to remain around these levels for the time being, while the market assesses whether the incoming supply and cooling demand is sufficient to offset the Russian oil shortfall.

It would take a move from Europe sanctioning Russian oil or gas to spark another strong move in oil and that doesn’t look likely for now.

  • WTI crude trades -0.3% at $96.08
  • Brent trades -0.6% at $1020.42

Looking ahead

  • 18:00 Baker Hughes stock piles
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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