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Opening Bell: U.S. Futures, European Stocks Rise On Earnings, Data; Gold Up

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewMay 03, 2021 08:23AM ET
www.investing.com/analysis/opening-bell-us-futures-european-stocks-rise-on-earnings-data-gold-up-200577058
Opening Bell: U.S. Futures, European Stocks Rise On Earnings, Data; Gold Up
By Investing.com (Pinchas Cohen/Investing.com)   |  May 03, 2021 08:23AM ET
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  • Russell 2000 futures point to resumption of Reflation Trade
  • Oil’s improving demand outlook has reversed its technical trajectory

Key Events

Shares in Europe followed US contracts for the Dow Jones, S&P 500, NASDAQ and Russell 2000 higher on Monday after strong earnings last week boosted bullish sentiment along with improving economic prospects, offsetting concerns of rising inflation and higher taxes in Europe. The UK market is closed today for a bank holiday.

This morning, all four major US futures were in the green, with the reflation trade appearing to be back on track. Contracts on the Russell 2000 outperformed, including by 3:1 for those on the NASDAQ 3:1 at time of writing.

The dollar was flat but gold gained.

Global Financial Affairs

Consumer products and technology stocks buoyed the STOXX Europe 600 Index which was up as much as 0.6% earlier this morning, snapping a four day decline. Slowing the advance was Siemens Gamesa Renewable Energy (F:GAM) after Citi wrote the company’s guidance disappointed.

The pan-European benchmark has gained 10% so far this year, supported by economic recovery hopes across the region accelerated by vaccines and ultra-loose fiscal and monetary policy. Restarting growth has been overshadowing a double-dipped contraction. The outlook is the most optimistic since COVID disrupted the free flow of the continental economy.

Still, geopolitics and the coronavirus resurgence in some developing countries has kept investors cautious, stalling momentum in the last couple of weeks since the primary European benchmark hit its Apr. 19 all-time high, ten sessions after the index surpassed its pre-pandemic, Feb. 19 record high.

From a technical perspective, the STOXX 600 looks ready for new highs.

STOXX 600 Daily
STOXX 600 Daily

The price bounced off the bottom of a continuation pennant pattern, which was a rest-stop after the price beat the Feb. 19 record. This also coincided with the uptrend line since the Nov. 2 bottom. A topside breakout would target the 450.00 level.

Earlier Monday, Asian stocks declined in a sluggish session with the Tokyo and Shanghai exchanges closed for holidays. Regional shares seemed to track Friday’s Wall Street decline while missing out on today’s advances by US futures and European shares. Hong Kong’s Hang Seng underperformed, falling 1.4%

US stocks fell from a record on Friday after Robert Kaplan, president of the Dallas Fed, broke ranks with Fed Boss Jerome Powell, saying he wants to talk about tapering and has a shorter view for rising interest rates.

The dollar was little changed on Monday, but gold pushed higher.

Gold Daily
Gold Daily

The precious metal is struggling against the top of a falling flag. An upside breakout would add fuel to the preceding flag that helped complete a double-bottom, as the price heads toward the top of a falling channel.

Bitcoin appears to be trading along a sharply rising flag, bearish after completing a rising wedge, whose downside breakout will return the price toward the $40K levels. Has the cryptocurrency's parabolic move gone too far?

Oil rebounded from a decline to a small gain.

Oil Daily
Oil Daily

The rebound occurred at the top of a blown out, descending triangle, as the outlook for demand reversed with optimism of the reflation trade amid a reopening economy. All of which overshaded concerns of the lingering virus and earlier worries about a US green initiative.

Up Ahead

Market Moves

Stocks

Currencies

  • The Japanese yen was at 109.63 per dollar, down 0.3%
  • The offshore yuan was at 6.4798 per dollar
  • The Dollar Index dipped 0.15%
  • The euro traded at $1.2022

Bonds

  • The US 10-year Treasury yield is up 0.90%
  • Australia’s 10-year bond yield was little changed at 1.76%

Commodities

  • West Texas Intermediate crude fell 0.6% to $63.20 a barrel
  • Gold was at $1,774.25 an ounce, up 0.3%
Opening Bell: U.S. Futures, European Stocks Rise On Earnings, Data; Gold Up
 

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Opening Bell: U.S. Futures, European Stocks Rise On Earnings, Data; Gold Up

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Comments (3)
Amie Inconnue
Amie Inconnue May 03, 2021 9:05AM ET
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Thank you, Pinchas! PMI is out: 64.7. Everything everywhere I look indicates higher prices.
Doctor Goodman
Doctor Goodman May 03, 2021 8:40AM ET
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Hey,My name Doctor can I ask you some questions...
Gloria Obiajulu
Gloria Obiajulu May 03, 2021 8:23AM ET
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Hello my name Gloria can I make money here please tell me please
VIKNESWARAN ILAYATHAMBI
VIKNESWARAN ILAYATHAMBI May 03, 2021 8:23AM ET
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i think yes
 
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