US open: Wall Street mixed as retail sales unexpectedly rebound
Fiona Cincotta September 16, 2021 2:47 PM
US retail sales unexpectedly rebound lifting Dow futures out of the red.
Dow futures +0.2% at 34730
S&P futures -0.4% at 4465
Nasdaq futures -0.4% at 15443
FTSE -0.02% at 7028
Dax +0.31% at 15680
Euro Stoxx +0.7% at 4173
Cyclicals gains as retail sales rebound
US stocks have opened mixed following a surprise jump in US retail sales. Retail sales unexpectedly jumped 0.7% MoM in August, up from -1.1% in July and well ahead of the -0.8% decline forecast. The upbeat sales data shows that consumers are resilient despite concerns over the rise in Delta covid cases. Whilst travel and leisure sales stagnated, back to school sales overshadowed this.
For the markets the data all links back to what the Fed will do in the meeting next week. The resilience seen in consumers has boosted bets that the Fed could fire the tapering gun in September. The US Dollar is charging higher and cyclicals, which are closely tied to the health of the economy, are outperforming high growth stocks. Dow futures managed to quickly reverse losses
There were few surprises from jobless claims which rose from the previous week’s 310k to 332k, just slightly above forecasts.
Where next for the Dow Jones?
The Dow Jones continues to trade below its 50 sma a key support across the year. It is now approaching the 100 sma at 34700. A break below here will bring 34500 into play, this is the weekly low and also the August low. It would take a move below this level for the bears to gain traction, possibly sparking a deeper sell off to 34750 the July 20 low. Any recovery would need to retake 35000 the round number, 50 sma. It would take a move over 25200 for the bulls to gain traction.
FX – USD rallies EUR trades sub 1.18
The US Dollar is on the rise as attention turns to the Fed meeting next week. Expectations are building that the Fed will taper which is lifting the US Dollar.
EUR/USD – the Euro is bearing the brunt of the stronger US Dollar. The common currency shrugged off upbeat Eurozone industrial production numbers yesterday and more hawkish commentary from the ECB. All eyes are on Christine Lagarrde who is due to speak shortly.
GBP/USD +0.07% at 1.3839
EUR/USD -0.36% at 1.1772
Oil rises on as stockpiles decline
Oil prices are holding steady around multi-week highs hit in the previous session. A huge draw on US inventories lifted the price. US crude stockpiles fell by 6.4 million barrels last week, well over the 3.5 million forecast as offshore facilities continue to recover from Hurricane Ida. The recovery to output has taken longer than expected.
Oil is also finding support from the surge in European power prices. The energy crisis in Europe is like to deteriorate before it gets better.
This week could be a key week for oil which is expected to see global oil demand rise to over 100 million barrels a day – last seen in 2019.
WTI crude trades -0.12% at $72.15
Brent trades -0.13% at $74.90
15:00 US Business Inventories
23:30 NZ Business PMI
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.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.