U.S. FUTURES LOWER AS EARNINGS FLOW
U.S. stocks are set to edge lower at the open Tuesday, with investors turning cautious as the earnings season kicks into high gear ahead of a Federal Reserve meeting while uncertainty still exists over new fiscal stimulus.
S&P 500 Futures were trading 12.80 points or 0.40% lower, Nasdaq Futures declined 59 points, or 0.55% while the Dow Futures contract fell 123 points, or 0.46%, at the time of writing.
Senate Republicans on Monday proposed a $1 trillion coronavirus aid package, after securing agreement with the White House, paving the way for urgent negotiations with the opposition Democrats as expanded unemployment benefits for millions expire at the end of this week.
Meanwhile, the earnings season heats up, with this week set to see around a third of S&P 500 companies reporting. Pfizer and Raytheon Technologies have impressed with their quarterly results, while McDonald’s and 3M have disappointed.
The Federal Reserve’s Federal Open Market Committee begins the latest of its regular two-day meetings later Tuesday. Expectations are for the central bank to maintain rates near zero but there is speculation that the Fed may guide for a further relaxation of policy before too long.
Fed policymakers have become more downbeat on the economic outlook in recent weeks, with some cautioning that recent improvements in economic data such as job gains may be fleeting amid resurgence in the coronavirus pandemic.
Economic numbers will come in the form of house price data from S&P/Case Shiller at 7 AM ET, the Conference Board’s consumer sentiment index at 8 AM and the Richmond Fed’s regional business survey also at 8 AM.
Oil prices remained largely unchanged on Tuesday with U.S. crude futures traded 0.36% lower at $41.45 a barrel, while the international benchmark Brent contract rose 0.09% to $43.94.
Traders will be watching out for the U.S. inventory data due from the American Petroleum Institute industry group later on Tuesday.
Elsewhere, gold futures fell 0.04% to $1,930.25/oz after earlier hitting a record high of $1,974.40 per ounce, surpassing a peak touched in September 2011.
On the technical front, the RSI is at 52.85% and suggests that the market can move in an upward direction. The current price is trading above all the moving averages. The stochastic is forming a downside crossover.
Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion—DOW JONES—SHORT SELL at 26400 Take Profit at 25900 Stop Loss at 26750