Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Opening Bell: U.S. Futures, Europe Advance As Markets Await Interest Rate Hikes

Published 07/19/2022, 07:04 AM
Updated 07/09/2023, 06:31 AM
  • Markets expect US Fed to hike rates 75 basis points
  • Dollar slides
  • Oil slips on recession concerns
  • On Tuesday, futures on the Dow, S&P, NASDAQ, and Russell 2000 moved higher, along with European stocks which recovered after opening in the red on recession fears.

    The STOXX 600 Index opened 0.3% lower as the ongoing energy crisis in Europe reduced the outlook for economic growth. However, the index recovered as Energy sector and Utilities climbed after shares in Électricité de France (EPA:EDF) surged over 50%, following the news that the French government will pay 12 euros per share to nationalize the nuclear energy provider.

    The S&P 500 lost 0.84% of its value yesterday after Apple (NASDAQ:AAPL) announced plans to slow hiring, another sign that high US inflation is slowing growth. The news ties in nicely with the technicals.

    Apple Index Daily

    The stock found resistance below the neckline of a top for the second time since June 1. Considering how close the price is to resistance, I consider this an ideal short entry, with an implied target of $125, but the price has to break first the June 16 low's support.

    The 10-2 year Treasury yield curve remains inverted.

    10-2 year Treasury Yield Weekly

    It is pricing in a second consecutive 75 basis point interest rate hike at the July 26-27 FOMC meeting.

    The dollar fell for the third straight day after extending far above its trendline.

    Dollar Index Daily

    A return to a trend line may offer a buying opportunity along the uptrend. Each rising trend line will provide another risk grade, with the closest being aggressive and the flattest one being conservative.

    Gold was flat, which is surprising considering the greenback is falling, and the market narrative that investors are nervous. Perhaps, investors earmarked capital to bonds, and maybe technicals are weighing on the yellow metal.

    Gold Monthly

    On the monthly chart the price is the lowest since the March 2020 crash. It may be topping out, which could send gold crashing.

    Bitcoin fell, paring about almost a third of yesterday's 8% advance, its biggest hike since June 19.

    Bitcoin Weekly

    After completing a gigantic top, the cryptocurrency found resistance at the top of a short-term rising channel, a Return Move. According to the principles of technical analysis, Bitcoin should crash, which I have been forecasting since the start of this year.

    Oil opened lower, ending a four-day advance which saw it hit $100 on tight supply concerns and a weakening dollar. Nevertheless, the black gold fizzled, perhaps on the technicals, reinforcing the recession story.

    Oil Daily

    The price cannot climb above the triangular pattern, cementing its resistance. I expect oil to fall into the $60s. 

    Up Ahead

    Disclaimer: The author currently does not own any of the securities mentioned in this article.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.