Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

U.S. Opening Bell: Global Stocks Seek Direction; Yields, Dollar Climb On NFP

By (Pinchas Cohen/ OverviewFeb 04, 2019 10:30
U.S. Opening Bell: Global Stocks Seek Direction; Yields, Dollar Climb On NFP
By (Pinchas Cohen/   |  Feb 04, 2019 10:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • European shares edge lower, U.S. futures waver amid lack of direction, Asian holidays
  • Treasury yields, dollar climb on upbeat nonfarm payroll data
  • Oil firms on OPEC supply cuts, Venezuela sanctions

Key Events

Equities in Europe and futures on the S&P 500, Dow and NASDAQ 100 slipped lower this morning, though U.S. contracts later managed to crawl back above neutral levels amid a general lack of market drivers.

The STOXX Europe 600 wiped out Fridays’ gains after the open—even after Shell (LON:RDSa) and BP (LON:BP) edged higher as Brent prices advanced for the fifth straight day. Rio Tinto (LON:RIO) and BHP (LON:BHPB), conversely, fell after a stock downgrade by JPMorgan.

During the earlier Asian session, equities firmed amid thin volume—as the region heads into Lunar New Year holidays—following a robust U.S. employment report on Friday as well as positive statements, over the weekend, from the U.S. Administration on trade negotiations with China.

Chinese markets will remain closed all week in observance of the holiday. Hong Kong's Hang Seng closed at midday, up 0.21 percent. South Korea’s KOSPI, which ended broadly flat (-0.06 percent), will be closed on Thursday. Australia’s S&P/ASX 200 gained 0.48 percent and Japan's Nikkei rose 0.46 percent, boosted by the weakest yen levels since December 28.

Global Financial Affairs

On Friday, U.S. stocks extended gains thanks to robust labor figures, where moderate wage growth did not threaten an inflation spike. A rise in broader prices would impact the Fed's recent shift in interest rates outlook, after Chair Jerome Powell said last week that the central bank will be “patient” and wait for data to make an informed decision on monetary policy, as well as “flexible” with unloading its spreadsheet.

UST 10-Year Daily Chart
UST 10-Year Daily Chart

Positive employment data boosted the yield on 10-year Treasurys, which had dropped over four straight session on the sudden shift in the Fed's rate outlook. Yields today extended the rebound, approaching the 2.7 percent level.

DXY Daily Chart
DXY Daily Chart

Upbeat nonfarm payrolls also pushed the dollar higher. The greenback is now advancing for the third day, after it slipped below the 200 DMA intraday on Thursday. The rebound came upon the potential neckline of a H&S top.

WTI Daily Chart
WTI Daily Chart

Meanwhile, oil prices moderately extended gains, as bullish traders support the advance from the $52 levels, helped by OPEC supply cuts in January as well as U.S. sanctions against Venezuela. Technically, the price completed a H&S bottom on Friday. However, with just a 1.65 percent penetration of the neckline, there is a reasonable chance of a bull trap.

Over the weekend, U.S. President Donald Trump told CBS that trade talks with Beijing are “doing very well” and sounded confident an agreement with North Korea was on the horizon. After a busy few days that included dovish Federal Reserve comments and U.S.-China trade talks in Washington, there’s a notable lack of drivers for markets on Monday, also due to Asian holidays. Investors may look to corporate earnings results—which have so far been a mixed bag—for direction.

As to U.S. equities, we have been bearish on the S&P 500 for quite some time, but have recently turned less assertive. The Fed’s tightening pace was the one single headwind that we consistently focused on for stock trend predictions, after historic central bank accommodation resulted in the longest bull market on record. We did say that should the tightening risk be removed, it would turn into a tailwind: last week's and last month's market performance confirmed this thesis. However, we do still think that the market has overstated the Fed's dovish tilt, and this begs for a meaningful downward correction, in the short term.

Furthermore, we are also concerned that the market is misinterpreting the Fed's—and particularly Chair Jerome Powell’s—statements altogether. Powell repeatedly said that the Fed is markedly data dependent, and since there is a lack of available data due to the partial government shutdown, the Fed cannot adequately fine-tune its policy path at present. We would argue that this doesn't represent a policy shift, as the market keeps claiming. It rather marks a pause on policy decisions. To clarify, we don’t know what the data will show when it becomes available, and it may very well support what the market already thinks, even if prematurely and therefore erroneously, in our opinion. On the other hand, the market might be shocked right back to the brink of a bear market, should it learn that it priced in a dovish turn that never occurred. Not only would it then return to the pre-Christmas levels, but it would price in yet more rate hikes, falling squarely into a full-on bear market.

Overall, U.S. shares are up in the short term and down in the medium term. The medium term would reverse if it posts an ascending series of peak and trough prices. Till then, we will maintain our bearish stance.

Up Ahead

  • Markets across Asia, including China, Hong Kong, Singapore, Taiwan, South Korea, Malaysia and Vietnam, will close for part or all of this week to mark the start of the Year of the Pig.
  • The Office for National Statistics in the UK releases its Services PMI for January. The manufacturing and construction readings have both come in lower than forecast.
  • Donald Trump delivers a delayed State of the Union address on Tuesday.
  • On Tuesday, the Reserve Bank of Australia sets monetary policy.
  • On Wednesday, Federal Reserve Chairman Jerome Powell hosts a town hall meeting with educators in his first public appearance after last week's FOMC meeting and rate decision.
  • On Thursday, the Bank of England sets interest rates and updates its economic forecasts. No change in policy is expected.
  • Also Thursday, the Reserve Bank of India unveils a rate decision.
  • With less than two months to go before the UK leaves the European Union, investors will be watching as Theresa May visits Brussels and Northern Ireland in the hope of making progress in Brexit negotiations.


  • Alphabet (NASDAQ:GOOGL) is slated to release its corporate results after market close, with forecasts for EPS at $10.88 and revenues at $38.91 billion, from $9.7 and $32.32 billion respectively the same quarter last year. The tech giant is facing some challenges to step up and diversify its revenue base.
  • Ryanair (NASDAQ:RYAAY) is scheduled to release earnings today, with EPS expected to fall to $0.02 from $0.45 for the corresponding quarter last year, while revenue is likely to have increased to $1.77 billion, from $1.468 billion last February.
  • Walt Disney (NYSE:DIS) is due to publish its results Tuesday after market close, with a $1.54 EPS forecast, down from $1.89; revenue is expected to have edged down to $15.07 billion, from $15.35 billion for the same quarter last year.
  • MetLife (NYSE:MET) is due to report earnings Wednesday after market close, with an EPS of $1.28, double last year’s number, while revenue is expected to edge down to $15.89 billion from $15.75 for the same quarter last year.
  • Twitter Inc (NYSE:TWTR) is scheduled to report earnings Thursday before market open, with an EPS forecast of $0.25 and $868.24 million revenue, compared to $0.14 EPS and $686.06 million last year.
  • Philip Morris (NYSE:PM) will publish corporate results Thursday before market open. EPS is expected to be $1.17, down from 1.27 for the same quarter last year, on $7.39 billion revenues, down from $8.29 billion revenue last year.
  • Hasbro (NASDAQ:HAS) is expected to publish its earnings report Friday before market open. Analysts expect an EPS of $1.68, down from last February’s $2.3, and revenues of $1.52 billion, down from $1.716 million for the same quarter last year.

Market Moves



  • The British pound climbed 0.1 percent to $1.3086.

  • The Dollar Index rose 0.12 percent, adding 0.35 percent in its third-day rally.
  • The euro slipped 0.1 percent to $1.1442.
  • The Japanese yen dropped 0.3 percent to 109.85 per dollar, the weakest in more than five weeks.
  • The MSCI Emerging Markets Currency Index fell 0.2 percent.


  • Britain’s 10-year yield climbed two basis points to 1.268 percent, the biggest increase in more than a week.

  • The yield on 10-year Treasuries increased one basis point to 2.70 percent.
  • Germany’s 10-year yield climbed less than one basis point to 0.17 percent.
  • The spread of Italy’s 10-year bonds over Germany’s advanced three basis points to 2.6138 percentage points to the widest in almost three weeks.


  • The Bloomberg Commodity Index climbed less than 0.05 percent to the highest in more than a week.
  • West Texas Intermediate crude advanced 0.4 percent to $55.48 a barrel, the highest in 11 weeks.
  • LME copper gave up 0.1 percent to $6,131.50 per metric ton.
  • Gold slid 0.4 percent to $1,313.29 an ounce, the largest decrease in more than two weeks.
U.S. Opening Bell: Global Stocks Seek Direction; Yields, Dollar Climb On NFP

Related Articles

U.S. Opening Bell: Global Stocks Seek Direction; Yields, Dollar Climb On NFP

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’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
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)
Muhammad Khan
Muhammad Khan Feb 05, 2019 11:44
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Intrested in Nasdaq any recommendation for a year
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
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'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
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
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.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email