Stocks Rise as Oil Heads Lower, Big Tech in Focus

US stocks are heading higher adding to gains from yesterday, as oil prices continue to fall. Fed speakers and big tech will be under the spotlight.

US futures

  • Dow futures +0.3% at 34799
  • S&P futures +0.3% at 4534
  • Nasdaq futures +0.4% at 14823

In Europe

  • FTSE +0.2% at 7490
  • Dax +0.7% at 14450
  • Euro Stoxx +0.8% at 3900

Stocks set for weekly gains

US stocks are set to open modestly higher on Friday after strong gains in the previous session, as Biden’s trip to Europe continues.

Wall Street three main Bourses posted gains of over 1%, with the Nasdaq surging 2.2% yesterday, finding relief from falling oil prices. Both the Nasdaq and the S&P500 are on track for a second straight week of gains.

Stocks have managed to push higher despite Federal Reserve speakers sounding increasingly more hawkish this week. Fed officials have been out in force expressing the need for a steeper path to policy normalization. The fact that stocks are rising despite expectations of a 50 basis point rate hike in March, will surely to make Powell feel more comfortable.

Two more Fed speakers are due today, Tom Barkin and John Williams, who are expected to continue with the hawkish guidance.

Looking ahead, US consumer confidence data for March, the final reading, is expected to confirm a slowdown from February to 59.7. Pending home sales are expected to rise 1.5% after falling sharply in January.

In corporate news:

Big tech will be under the spotlight after EU antitrust chief Margrethe Vestager said that there would be strict new rules aimed at big tech coming in October.

Separately news that Apple is looking at changing a subscription for its hardware has not impacted the stock pre-market.

Where next for the Nasdaq?

The Nasdaq is extending its rebound from the 2022 low of 12950. The rise above the 50 sma, in addition to the bullish RSI, keeps buyers optimistic of further gains. Having pushed over 14700 the February 15 high, buyers are now targeting 15070 the 10 February high with a break above here exposing the 100 sma at 15220. Immediate support can be seen at 14700 with a break below here brings 14400 into play the March 3 high and the 50 sma at 14300.

FX markets USD falls, GBP holds steady.

USD is falling today after two days of gains but is still on track to rise across the week. The greenback has been supported by hawkish Fed commentary and upbeat US economic data across the week.

GBPUSD is holding steady despite retail sales unexpectedly falling in February. Sales dropped 0.3%, after rising 1.9% in January. Expectations had been for a rise of 0.8%. Sales fell as the cost of living hit a 30 year high of 6.2% in February. Online sales also fell to pre-covid levels.

  • GBP/USD +0.06% at 1.3213
  • EUR/USD +0.18% at 1.1017

Oil steadies as more sanctions on oil are unlikely for now

Oil prices are falling, extending losses from the previous session, but is still on track for weekly gains of around 5%.

Oil prices have come under pressure as the EU remains split over whether to impose sanctions on Russian oil. While the divide remains, Russian oil will keep flowing to Europe, easing supply fears.

Additionally, the US and its allies are considering releasing more oil reserves, which will help alleviate supply concerns in the very short term.

Kazakhstan supply concerns that plagued the market at the start of the week have eased with the partial resumption from the Kazakhstan CPC crude terminal, which a storm had damaged.

WTI crude trades -2.5% at $109.56

Brent trades -1.58% at $113.85

Looking ahead

  • 14:00 US Michigan consumer feeling
  • 14:00 US Pending home sales
  • 17:00 Baker Hughes oil rig count

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