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Opening Bell: Futures, Global Stocks Rise Ahead Of Biden Speech On Stimulus

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJan 14, 2021 06:45AM ET
www.investing.com/analysis/opening-bell-futures-global-stocks-rise-ahead-of-biden-speech-on-stimulus-200555887
Opening Bell: Futures, Global Stocks Rise Ahead Of Biden Speech On Stimulus
By Investing.com (Pinchas Cohen/Investing.com)   |  Jan 14, 2021 06:45AM ET
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  • Stimulus announcement expected
  • US cyclical rotation back in play

Key Events

Futures on the Dow, S&P and Russell 2000 are trading in the green on Thursday while contracts on the tech sector are under pressure with NASDAQ futures down ahead of the US market open.

President-elect Joseph Biden is expected to announce a $2 trillion coronavirus relief plan at a speaking event after the US market closes today, which has lifted sentiment and boosted Treasury yields.

Global Financial Affairs

Reports that Biden and his advisers have discussed the cost of the fiscal stimulus package with Congress set in motion a cyclical rotation, boosting futures on the Russell 2000, whose listed small caps are more sensitive to the economic cycle.

Contracts on the NASDAQ were the only ones slightly in the red, as they do better when there are increased rates of COVID-19 infections or additional lockdowns are announced. Technology shares have significantly benefited from the work-from-home environment.

The STOXX 600 Index advanced today with both sides of the cyclical rotation. Banks rallied on the outlook for higher inflation, and automakers rose with the expectation that an end to lockdowns will put cars back on the road. Unlike the US market, European tech shares advanced as well.

French retailer, Carrefour (PA:CARR) fell 7%, halving yesterday’s 13.4% surge after reports that the French government suggested it would not approve its sale to Canadian Couche-Tard (TSX:ATDb). The worst pandemic in 100 years has turned the European country toward protectionism as it realizes the importance of domestic control of its food supply.

Asia was mixed, with Japan’s Nikkei 225 (+0.8%) outperforming despite reports the country’s government is set to expand the state of emergency to another seven prefectures including Osaka and Aichi.

China’s Shanghai Composite fell 0.9% after China reported its first COVID-19 death since April and an accelerating rate of contagion.

Stocks advanced Wednesday on Wall Street, while yields receded for the second session, posting the sharpest decrease in five weeks, amid optimism the economy will be boosted by ongoing Quantitive Easing from the Federal Reserve. Oil surprisingly declined after data demonstrated shrinking stockpiles in the US.

However, incongruent with the view that the recovery will pick up pace, the NASDAQ 100 was the leader of the pack. Intel (NASDAQ:INTC) surged 7% after the chipmaker named Pat Gelsinger as its new CEO, which will come into effect on Feb. 15.

However, investors should stay vigilant on the potential for a significant reversal, based on the technicals.

INTC Monthly
INTC Monthly

The stock is forming a massive H&S top, which started mid-2018 and would complete with a fall below $43.

Treasuries, including the 10-year, returned to a selloff after the report of potential additional government aid.

Treasuries Daily
Treasuries Daily

Yields are struggling with the top of a rising channel, which demonstrated its resistance when an attempt at breakout turned into a shooting star.

The dollar continues to hammer against a resistance level, which flipped from a support in December.

Dollar Index Daily
Dollar Index Daily

The greenback may be forming a small H&S bottom that would attempt to storm the downtrend line since the March highs.

Gold is caught in the crossfire of a variety of technical forces.

Gold Daily
Gold Daily

The yellow metal is confined within the stream of a falling channel since its August record, pushing it below the 200 DMA. But it's also within a rising range, which could prove to be a bearish flag, even while it may be forming a H&S bottom. Navigating these crosscurrents could be tricky and requires risk-tolerance.

Bitcoin accelerted for the second day and is back above $38,000.

WTI dropped for the second day on profit taking. Traders should take note of four significant oil market developments.

Up Ahead

Market Moves

Stocks

Currencies

  • The Dollar Index was down less than 0.1% at 90.29.
  • The euro was little changed at $1.2153.
  • The British pound jumped 0.2% to $1.3665.
  • The onshore yuan was little changed at 6.466 per dollar.
  • The Japanese yen weakened 0.1% to 104.01 per dollar.

Bonds

  • The yield on 10-year Treasuries jumped two basis points to 1.10%.
  • The yield on two-year Treasuries increased less than one basis point to 0.15%.
  • Germany’s 10-year yield declined one basis point to -0.53%.
  • Britain’s 10-year yield advanced one basis point to 0.312%.
  • Japan’s 10-year yield climbed less than one basis point to 0.041%.

Commodities

  • West Texas Intermediate crude gained 0.5% to $53.20 a barrel.
  • Brent crude increased 0.4% to $56.31 a barrel.
  • Gold weakened 0.2% to $1,841.92 an ounce.
Opening Bell: Futures, Global Stocks Rise Ahead Of Biden Speech On Stimulus
 

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Opening Bell: Futures, Global Stocks Rise Ahead Of Biden Speech On Stimulus

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Comments (3)
Arunas Nasvytis
Arunas Nasvytis Jan 18, 2021 6:37PM ET
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There’s more demand for computer chips than supply and availability we’re buying Micron immediately tomorrow
Richard Basehart
Richard Basehart Jan 15, 2021 7:59AM ET
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Whoa, Biden promises a TRILLION + plus stimulus package and the market is trending down?  Where are the articles slamming Biden?  Or did you only do that for President Trump?  smh
trevor isle
trevor isle Jan 14, 2021 9:06AM ET
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Always a good overview. appreciate that every morning...and the occasional subtle humor.
Pinchas Cohen
Pinchas Cohen Jan 14, 2021 9:06AM ET
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So subtle I missed it. Was there something humorous in today's post?
 
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