US open: Futures trade mixed, treasury yields, oil rise
Fiona Cincotta September 27, 2021 11:02 PM
US stocks are pointing to a mixed start. Cyclicals and oil stocks are in favour as treasury yields rise and oil trades at a three year high.
Dow futures +0.04% at 34825
S&P futures -0.26% at 4444
Nasdaq futures -0.86% at 15197
FTSE -0.03% at 7050
Dax +0.3% at 15570
Euro Stoxx +0.15% at 4165
Stocks are set to open mixed with Fed speakers in focus this week.
US stocks are set for a mixed open on Monday, as futures pared earlier gains and investors questioned whether global growth can survive a slowdown in Chinese growth, an energy crunch and the Fed tapering support.
US treasury yields have jumped to a three month high ahead of Fed speeches and expectations that the Fed will look to rein in bond purchases before the end of the year. As a result, investors are rotating into cyclicals at the expense of the high growth tech stocks, keeping the Dow Jones in the red which the tech heavy Nasdaq slumps on the prospect of tighter policy from the Fed. Industrials such as Caterpillar and 3M tend to benefit from an economic rebound are on the rise,
US durable goods orders came in better than forecast, rebound by 1.8% MoM in August, up from -0.1% in July. The upbeat data supports the view that the US economy is recovering well and ready for bond purchases to be tapered.
Energy stocks are also firmly in demand as oil trades at a 3 year high.
Where next for the S&P
The S&P broke out of the rising channel within which it had been trading since mid-May. The price found support on the 100 sma and pushed higher retaking the 50 sma. The RSI is neutral. However, the shooting star candle suggests that reversal could be on the cards. Immediate support is being tested at 50 sma 4450. A break below here could see 4400 horizontal support tested before exposing the 100 sma at 4350. Any move higher would need to retake 4494 last week’s high to target 4550.
FX – USD rebounds, EUR slips post election
The US Dollar is trading higher despite the upbeat mood in the market. The greenback is tracing treasury yields higher after last week’s FOMC.
EUR/USD – The Euro is struggling to rise after the German elections. The SPD centre left party narrowly won the elections. However, coalition talks are starting and could go on for some time. The prospect of lengthy coalition negotiations is weighing on demand for the Euro. A speech by ECB President Christine Lagarde is eyed later today.
GBP/USD +0.2% at 1.3704
EUR/USD -0.15% at 1.1706
Brent trades at 3 year highs
Oil prices are rising for a fifth consecutive session and trading at fresh three year highs amid supply tightness and draws on inventories. US inventories are at the lowest level for over two years.
Surging gas prices are also driving oil prices higher as oil becomes a comparably cheaper alternative for power generation.
OPEC members are also struggling to raise output owing to under investment or maintenance delays from the pandemic.
Goldman Sachs has upwardly revised its oil outlook to $90 per barrel.
WTI crude trades +1.05% at $74.79
Brent trades +1.05% at $78.28
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels
- Place the trade.
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.