Opening Bell: U.S. Futures, Stocks Slide As Broader Rally Ends; Dollar Falls

• European equities drop on earnings outlooks, dispelling hopes of continued profits amid lockdowns
• Tech recovers after sell-off triggered by vaccine news
• Global virus fatalities reach fresh record

Key Events

A global rally that was losing momentum turned negative on Thursday on the view that equity valuations may be stretched as economies continue to suffer from the persistent pandemic. Although many European countries are locked down, infections are continuing to spread there, while in the US new infections and hospitalization numbers keep hitting new highs.

Contracts on the Dow, S&P, and Russell 2000 were all trading in the red, though futures on the tech heavy NASDAQ were positive at time of writing.

Gold rallied as the dollar remained under pressure.

Global Financial Affairs

US futures have been falling since Wednesday’s rebound of the underlying indices when the S&P and NASDAQ posted gains. Shares in Europe, including on the Stoxx 600 opened lower on earnings news.

Europe’s largest industrial manufacturing company, Siemens (DE:SIEGn) slumped even though it posted a moderate increase after providing softer than expected guidance for 2021 because of the coronavirus.

British Legal & General Group (LON:LGEN), which provides financial services, slumped after announcing its final 2020 dividend may remain the same.

Iconic British luxury brand Burberry (LON:BRBY) jumped 5.8% thanks to a less-than-expected decline in sales.

Most Asian indices were in the red this morning, with the Nikkei 225 notably in the green, up 0.7%, as traders rotated back into tech stocks after a selloff made valuations more palatable.

US stocks climbed to 10-week highs on Wednesday during the Wall Street session, boosted by a massive return into technology shares, with Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) leading the charge, while small caps ended a two-day surge.

The S&P 500 Index advanced to its highest level in over ten weeks, finishing the day less than a quarter-of-a-percent from the record high.

S&P Daily

The index extended Tuesday’s rebound off the top of a symmetrical triangle, increasing the odds of bulls having taken over from bears when breaking the pattern’s topside. Monday’s oversized shooting star still looms above with a potential bearish stronghold of unknown magnitude.

Yields, including for the 10-year Treasury note, ended a five-day advance.

Treasuries Daily

The RSI provided a negative divergence.

The dollar retreated after reaching a weekly high.

Dollar Index Daily

The greenback is finally making progress climbing back over the neckline of a H&S continuation pattern, bearish within the downtrend. The price closed below the 50 DMA for the sixth straight day.

Gold advanced in a fifth day of zig-zag trading, on the dollar’s slight weakness and a decline in futures and stocks.

Bitcoin climbed for the second day, nearing the $16,000 level, its highest point since early January 2018.

Oil fell, confirming Wednesday's powerful shooting star.

Oil Daily

However, it remains above the top of a falling channel, guarded by the 100 DMA. In reality, the supply and demand picture for oil in the fourth quarter of 2020 and first quarter of 2021 isn't positive.

Up Ahead

• European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and US Federal Reserve Chairman Jerome Powell are among the speakers at an online ECB Forum entitled, Central Banks in a Shifting World on Thursday.
• US CPI data for October is due on Thursday.
• On Friday, finance ministers and central bankers from the Group of 20 hold a meeting ahead of next week's G20 summit, to discuss bolder action to help poor nations struggling to repay their debts.

Market Moves

Stocks

• The Stoxx 600 Index sank 0.7% as of 8:24 a.m. London time.
• NASDAQ 100 Index futures decreased 0.4%.
• Futures on the S&P 500 Index sank 0.6%.
• The MSCI Asia Pacific Index was up 0.6%.

Currencies

• The Dollar Index receded 0.2%.
• The British pound dipped 0.3% to $1.3181.
• The Japanese yen fell 0.1% to 105.30 per dollar.
• The Indian rupee was up 0.22% to 74.599 per dollar.

Bonds

• Germany’s 10-year yield decreased one basis point to -0.52%.
• Britain’s 10-year yield declined two basis points to 0.394%.
• France’s 10-year yield fell one basis point to -0.276%.
• Japan’s 10-year yield fell one basis point to 0.03%.

Commodities

• West Texas Intermediate crude gained 0.4% to $41.61 a barrel.
• Gold was little changed at $1,865.17 an ounce.
• Soybeans increased 0.07% to $11.51 a bushel.
• Iron ore increased 1.07% to $121.59 per metric ton.