Breaking News
Investing Pro 0
💎 Access the Market Tools Trusted by Thousands of Investors Get Started

Opening Bell: Fed, Earnings Boost U.S. Futures, European Stocks As Yields Rally

By Investing.com (Pinchas Cohen)Market OverviewApr 29, 2021 07:14AM ET
www.investing.com/analysis/opening-bell-fed-earnings-boost-us-futures-european-stocks-as-yields-rally-200576232
Opening Bell: Fed, Earnings Boost U.S. Futures, European Stocks As Yields Rally
By Investing.com (Pinchas Cohen)   |  Apr 29, 2021 07:14AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
US10Y...
-0.05%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
+0.78%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
RTYZ3
-0.29%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
1YMZ3
-0.31%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NQZ3
+0.05%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IXIC
-0.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
  • Fed believes inflation will only be temporary
  • Promises to warn ahead of any rate hikes
  • Apple, Facebook report blowout earnings

Key Events

Yields on US Treasuries jumped along with futures on the Dow, S&P, NASDAQ and Russell 2000 as well as European stocks on Thursdsay, ahead of the New York open. The confirmation by the Federal Reserve that it would continue its accommodative policy was compounded by strong earnings which sealed the case for a resurgent American economy.

For the second consecutive day, Bitcoin dropped. 

Global Financial Affairs

Contracts on the NASDAQ were outperforming at the time of writing, ahead at one point by almost a full percent after earnings from Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) beat expectations, giving long positions a big win.

In European trading the STOXX 600 Index rose to within a whisper of its Apr. 16 record close. Finnish telecom network equipment producer Nokia (HE:NOKIA) catapulted higher by almost 14%, due to an increase in sales of network and 5G equipment. 

Consumer goods behemoth Unilever (AS:ULVR) climbed over 3% thanks to strong sales in China, which has been enjoying a robust economic recovery; adding to that was increased demand for home cooking supplies during global lockdowns. The Dutch headquartered giant announced it will be buying back shares to the tune of up to 3 billion euros (US$3.6 billion)

Oil majors Royal Dutch Shell (LON:RDSa) and Total (PA:TOTF) both jumped about 1.5%, after posting strong quarterly results. UK based Shell also raised its dividend. Sshares in France-based Total have rebounded and are now close to pre-COVID levels.

French plane maker Airbus (PA:AIR) climbed 3%, also thanks to quarterly results, displaying higher core earnings.

On Wednesday, US stocks ended a rocky session by closing lower, with the Russell 2000 the only index in the green, 0.28% higher. The NASDAQ declined in the precise symmetrical proportion of 0.28%—demonstrating a clear negative correlation, as each index represents a side of the reflation trade. However, following Apple and Facebook reporting after the closing bell, the NASDAQ ETF (QQQ) jumped aftermarket. 

Stocks had hit session highs earlier in the trading day after the Fed delivered a positive message about the strength of the economy, while downplaying inflation risk. The US central bank reaffirmed its continued support, implying it is prepared to allow the economy to continue running hot, and also promised to give a substantial heads up before hiking rates.

Traders optimism on the US economic recovery received a boost from President Joseph Biden's speech to Congress on Wednesday evening, in which he unveiled a $1.8 trillion spending plan that included childcare, education and paid leave.

Despite this, rates on the 10-year Treasury note are headed for their biggest weekly increase since Mar. 19, but could face resistance.

10-year Treasuries Daily
10-year Treasuries Daily

Yields got stuck when hitting the neckline of a double top from below, confirming the resistance of yesterday’s shooting star. While the RSI is on a downward path, having provided a negative divergence to rising rates since late February, the momentum gauge may have found support, bouncing off its lowest levels in late-September. The MACD triggered a bullish cross. We expect declines in yields, unless they close above 1.7%.

The dollar seems to have found its footing after the Federal Reserve clobbered it over the head by promising that any interest rate hikes are a way in the future.

Dollar Index Daily
Dollar Index Daily

The greenback found support by its uptrend line (red) since the bottom. The US currency had been falling after completing a rising wedge, but now it is nearing the massive falling wedge since the 2020 peak.

Gold completed a second straight bullish flag, after completing a double-bottom. It's therefore expected to rise until it retests its falling channel. 

Gold Daily
Gold Daily

In the short-term, the yellow metal is bullish, but remains bearish in the medium-term.

Despite the boost Bitcoin should have received as an inflationary hedge, the cryptocurrency is falling for a second day.

Bitcoin Daily
Bitcoin Daily

The slide could be because it completed its return-move, after completing a rising wedge. We expect it will now to return to the $40,000 levels, before continuing higher.

Crude oil extended gains on a confident outlook on demand from OPEC and its allies, despite the threat from India’s COVID-19 crisis.

Oil Daily
Oil Daily

Oil has provided a topside breakout to a descending channel. Should the price remain above the pattern, it will blow out the bearish pattern, potentially turning into a bullish one.

Up Ahead

  • On Thursday, US GDP is forecast to show growth accelerated in the first quarter.
  • US oil majors, Exxon (NYSE:XOM) and Chevron (NYSE:CVX) report results ahead of the US open on Friday. 

Market Moves

Stocks

  • Futures on the S&P 500 Index advanced 0.6% as of 8:35 a.m. London time.
  • The STOXX 600 Index increased 0.5%.
  • The MSCI Asia Pacific Index climbed 0.4%.
  • The MSCI Emerging Markets Index gained 0.5%.

Currencies

  • The Dollar Index rose 0.2%.
  • The euro was little changed at $1.212.
  • The British pound advanced 0.2% to $1.3964.
  • The onshore yuan strengthened 0.2% to 6.468 per dollar.
  • The Japanese yen weakened 0.2% to 108.82 per dollar.

Bonds

  • The yield on 10-year Treasuries advanced four basis points to 1.65%.
  • The yield on two-year Treasuries climbed one basis point to 0.17%.
  • Germany’s 10-year yield increased one basis point to -0.22%.
  • Britain’s 10-year yield advanced two basis points to 0.817%.
  • Japan’s 10-year yield gained one basis point to 0.098%.

Commodities

  • West Texas Intermediate crude increased 0.4% to $64.09 a barrel.
  • Brent crude gained 0.4% to $67.54 a barrel.
  • Gold weakened 0.1% to $1,779.65 an ounce.
Opening Bell: Fed, Earnings Boost U.S. Futures, European Stocks As Yields Rally
 

Related Articles

Opening Bell: Fed, Earnings Boost U.S. Futures, European Stocks As Yields Rally

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Amie Inconnue
Amie Inconnue Apr 29, 2021 9:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thank you, a great article as usual! I believe many people are also interested in SLV: an important and relatively scarce industrial material + inflation hedge, looks like a win-win, but the price behaves... erratically day-to-day.
Pinchas Cohen
Pinchas Cohen Apr 29, 2021 9:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You're welcome, and thank you, Arnie. If ZI gets over $27, I expect it will keep going up to $30.
Notvery Goodathis
Peteymcletey Apr 29, 2021 8:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fed only believes inflation will be temporary. Then they won't surprised next year when it's not. Or they'll claim to not have seen it coming.That or they just change how they measure inflation again. Seems to be a way to fix it - hide it.
Amie Inconnue
Amie Inconnue Apr 29, 2021 8:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Agreed. Isn't that what all governments always do?
Pinchas Cohen
Pinchas Cohen Apr 29, 2021 8:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No argument here.
pyae phyo
pyae phyo Apr 29, 2021 8:03AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Mark Brian Sinang
Mark Brian Sinang Apr 29, 2021 7:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
pyae phyo
pyae phyo Apr 29, 2021 7:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email