Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Opening Bell: Futures, Global Stocks Rebound Despite U.S. Impeachment Vote

By Investing.com (Pinchas Cohen/Investing.com)Stock MarketsJan 12, 2021 12:14
uk.investing.com/analysis/opening-bell-futures-global-stocks-rebound-despite-us-impeachment-vote-200451911
Opening Bell: Futures, Global Stocks Rebound Despite U.S. Impeachment Vote
By Investing.com (Pinchas Cohen/Investing.com)   |  Jan 12, 2021 12:14
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Bitcoin rebounded to the $36,000 levels after Monday’s steep declines
  • Twitter plunged over 6% after permanently banning Trump
  • Facebook dropped 4%

Key Events

Futures contracts on the Dow, S&P, NASDAQ and Russell 2000 found their footing on Tuesday morning and global shares recovered from the last session selloff as the outlook for additional US fiscal support outweighed concerns on Wednesday's vote to impeach President Donald Trump or upcoming US earnings results.

Treasury yields continue their march north, while gold is starting to recover.

Global Financial Affairs

All four major US contracts were modestly higher, with those on the Russell 2000 in the lead, after the underlying index outperformed on Monday, when tech bulls dug in their heels during the Wall Street session, to endure a modest decline of less than 0.1%.

In Europe on Tuesday, the STOXX 600 Index advanced, driven by oil & gas and travel & leisure shares. These sectors took the worst hit during coronavirus lockdowns and therefore have the most to gain in the advent of a return to a normal economy. The rebound shows that investors are putting their eggs in the COVID-19 vaccine basket, disregarding the rampant virus infection rates that continue to stifle the recovery.

Oil producers BP (LON:BP), Royal Dutch Shell (LON:RDSa) and Total SA (PA:TOTF) rebounded from Monday’s selloff. The recovery was sparked by China, the world’s largest oil importer, enforcing a strict lockdown in areas surrounding Beijing, after there was a COVID-19 outbreak in the city of Langfang, in Hebei. Today’s gains were also on expectations of a US stockpile drawdown during today's weekly API release.

The fundamental narrative for this morning's European risk-on is that yesterday, traders cashed in profits they incurred after the Blue Sweep in Georgia's US Senate runoffs repaved the path to additional fiscal stimulus, the trigger for last week’s share price advances. However, the STOXX 600 may experience further pressure, based on the technicals.

Stoxx 600 Daily
Stoxx 600 Daily

On Monday, the pan-European gauge may have completed an Evening Star—a three-candle pattern reversal, backed by a peaking ROC following a negative divergence. Though bulls fought back bravely, by closing well off session lows—the top of Thursday’s first candle of the pattern—and today they picked up where they left off, pushing off the uptrend line. Friday’s highs will be the test of whether the bullish counterattack will prevail or whether bears are biding their time, ahead of a second attempt to push the price below its uptrend line since the Dec. 21 low.

Stocks in Asia were mixed on Tuesday, with China’s Shanghai Composite (+2.2%) outperforming among the major regional gauges. The blue-chip CSI 300 Index surged to a 13-year high, inching toward its October 2007 record. This benchmark is enjoying its best ever start to a year, now that its nemesis, US President Donald Trump is almost out of the picture.

Hong Kong’s Hang Seng jumped 1.3%, nearing a yearly high, boosted by continued capital inflows from the mainland.

US shares dropped Monday for the first time in five days. Investors seemed to experience a rare pang of consciousness as prices hovered near their most expensive in history, ahead of earnings season which starts in earnest on Friday when JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) all report. More likely the selloff was a healthy correction on profit-taking in the aftermath of last week’s strong performance. Still, investors could find more value at this point in the obvious place—the tech sector.

Real estate and consumer discretionary stocks weighed on the S&P 500 Index, while energy firms offset steeper losses. Eli Lilly (NYSE:LLY) propped up healthcare stocks after its shares jumped 12%, hitting a new record, after trials showed its Alzheimer's drug, "slowed the rate of decline in patients."

Twitter (NYSE:TWTR) plummeted 6.4% after the platform permanently banned President Trump on Monday following a riot caused by a mob of his supporters storming the Capitol. Facebook (NASDAQ:FB), which also suspended Trump’s account, dropped 4%. Without getting into the politics, this controversial decision—which angered conservatives—may be a breakthrough toward a discussion and regulations on social media platforms.

TWTR Daily
TWTR Daily

In terms of investing, Twitter’s decline, although exacerbated by politics, is within the normal path of a corrective move within an uptrend, while Facebook—already beset by antitrust problems—seems to be topping out.

Yields, including on the 10-year note, climbed for the sixth day, demonstrating that investors are comfortable with the direction of stocks.

Treasuries Daily
Treasuries Daily

This is the longest selloff in Treasuries since the 7-day yield advance, that ended on Oct. 22. Rates surpassed the 1.15 yield, the highest since mid-March.

The dollar, however, gave up a five-day advance, turning into a decline, despite support by elevated Treasury yields.

Dollar Index Daily
Dollar Index Daily

Technically, the greenback is trading within a downtrend since the currency's March peak.

Gold is showing signs of life today, as it rebounds despite risk-on. On Monday it rebounded from a steep selloff into gains, even as the dollar continued to strengthen. Finally, and even after much talk about Bitcoin siphoning capital away from gold, the yellow metal advanced. It rose yesterday as Bitcoin weakened, but is continuing to rise even as Bitcoin recovers today.

Gold Daily
Gold Daily

From a technical perspective, gold is building on yesterday’s hammer, as it climbs back over the 200 DMA, a support since May 2019 as it potentially trades along a complex H&S pattern.

Bitcoin has been wavering below the $36,000 level, slightly above yesterday’s close. On Monday, the digital asset suffered a 16.7% plunge but managed to close at less than half that, for a loss of 7.2%, respecting the Fibonacci’s minimum retracement and the price’s uptrend line.

Oil climbed above $53—and is trading at the very top of the session for good measure—for the first time since Feb. 21, ahead of Wednesday’s official report, which is expected to show a drawdown.

Oil Daily
Oil Daily

The price found resistance by the 200-week MA, a staunch support between May 2019 and January 2020, turning into resistance in February. The price is also nearing its downtrend line since the October 2018 high.

Up Ahead

Market Moves

Stocks

Currencies

  • The Dollar Index decreased 0.1% to 90.35.
  • The euro was little changed at $1.2158.
  • The British pound climbed 0.2% to $1.3547.
  • The Japanese yen strengthened 0.1% to 104.20 per dollar.

Bonds

  • The yield on 10-year Treasuries rose less than one basis point to 1.15%.
  • The yield on two-year Treasuries was unchanged at 0.14%.
  • Germany’s 10-year yield rose one basis point to -0.49%.
  • Britain’s 10-year yield climbed one basis point to 0.32%.

Commodities

  • West Texas Intermediate crude gained 0.8% to $52.60 a barrel.
  • Gold strengthened 0.7% to $1,857.30 an ounce.
Opening Bell: Futures, Global Stocks Rebound Despite U.S. Impeachment Vote
 

Related Articles

Opening Bell: Futures, Global Stocks Rebound Despite U.S. Impeachment Vote

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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.

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 (1)
Dirk Reynen
Dirk Reynen Jan 13, 2021 10:53
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just in: apparently F8, 7wi773r, 1n$7a,Y7, Wa and g00g have all t3$t3d + forCommunism1-9
 
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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email