US stocks are edging higher with Russian developments in focus, as well as Twitter on the news that Elon Musk is now social media platform’s largest share holder.
- Dow futures +0.15% at 34855
- S&P futures +0.23% at 4555
- Nasdaq futures +0.44% at 14925
- FTSE -0.23% at 7546
- Dax -0.09% at 14460
- Euro Stoxx -0.04% at 3928
Russia, Twitter in focus ahead of FOMC minutes later in the week
Stocks are set to open broadly flat on Monday, as investors monitor the latest developments in Russia, look ahead to the release of the latest FOMC minutes on Wednesday and after Elon Musk buys a stake in Twitter sending the share price surging.
The market mood soured slightly in THE European session amid concerns that a peace talk failed to advance. Meanwhile, the horror of the atrocities committed by Russian troops in Bucha has prompted Western leaders to consider further sanctions against Moscow.
There is little on the economic calendar today. Investors will instead look ahead to the release of the FOMC minutes on Wednesday. The strong jobs report on Friday combined with inflation at a 40 year high supports expectations that the Fed will hike rates by 50 basis points at the next meeting.
In corporate news:
Elon Musk has built a 9.2% stake in Twitter worth around $2.89 billion on Friday’s close, making him the social media platform’s largest shareholder. Twitter shares have jumped 25% pre-market on the news.
The news comes after Elon Musk hinted last month about starting his own social media platform after criticizing Twitter over its policies and adherence to free speech. Musk is one of Twitter’s biggest personalities.
The move is likely to test Parag Agrawal who took over from Jack Dorsey as CEO in November and set ambitious targets such as growing to 315 million daily users and lifting revenue to $7.5 billion by the end of next year.
Where next for the Twitter share price?
The Twitter share price is expected to jump 20% on the open, a move that will take the price to around $47, a 2022 high. The move will bring the December ’21 high of $48.20 into focus, with a break above here exposing the 200 sma at 52.25. The RSI is supportive of further upside, although the move could push the RSI into overbought territory, which is worth watching for. Support can be seen around $44 a level which capped gains on several occasions in December.
FX markets USD rallies, EUR trades lower.
USD is rising after as it traces treasury yields higher and as the market mood starts to sour. Concerns over whether a diplomatic solution to Ukraine is possible is hurting sentiment, lifting safe-haven demand.
The euro trades lower after data shows the Eurozone investor morale tumbling to a 20 month low in April. The Sentix investor confidence index fell to -18, down from -7 in March and well short of the -9.2 forecast.
GBP/USD is falling as attention shifts to BoE speakers. While the BoE has hiked interest rates three times across the past three central bank meetings, there are doubts about how much more policy makers can tighten without tipping the economy into recession. BoE’s Cunliffe is due to speak shortly.
- GBP/USD -0.2% at 1.3100
- EUR/USD -0.4% at 1.1002
Oil steady after 13% fall
After falling 13% last week oil prices are stabilizing as investors remain concerned over tight supply and the stalling in Iran negotiations to revive the Iran nuclear deal.
Oil fell sharply last week after the US said that it would release 1 million barrels of oil a day over the next six months. Whilst it replaces some of the 1 – 3 million barrels of Russian oil absent from the market, it certainly doesn’t fully compensate. Even so, it was sufficient to bring prices back towards $100. The release of the reserves eases but doesn’t resolve the supply deficit.
The market is now searching for a where else new supply can come from. There had been hopes that the revival of the Iran nuclear deal would result in sanctions of Iran oil being lifted and more oil flooding back to the market. However, the talks have stalled with each side blaming the other.
- WTI crude trades +0.5% at $99.15
- Brent trades +0.4% at $104.50