Nasdaq Leads the Rally, Jobless Claims Hit 3-Month High

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The tech heavy Nasdaq is set to lead the charge higher as Fed fears ease and ahead of Netflix earnings. Jobless claims unexpectedly rise to a 3-month high as Omicron cases surge.

US futures

• Dow futures +0.4% at 35170
• S&P futures +0.51% at 4554
• Nasdaq futures +0.94% at 15190

In Europe

• FTSE -0.15% at 7154
• Dax +0.23% at 15830
• Euro Stoxx +0.13% at 4274

Big tech leads the charge high ahead of Netflix earnings

US stocks are set to open of higher ground, boosted by a slew of upbeat earnings and softer than expected jobless claims.

US jobless claims unexpectedly climbed to 286k last week, up from 230k and well ahead of the 220k forecast. The data suggests that Omicron is impacting employers and has eased concerns over a more aggressive Fed, which had dominated a sell off in the equity market this week.

Surging yields had sent the high-tech Nasdaq tumbling across the week entering into bear market territory yesterday. Today, the Nasdaq is set to outperform its major peers. Big tech such as Microsoft, Alphabet, Amazon and Tesla were rising pre-market as investors look ahead to the release of Netflix earnings after the closing bell.

In corporate news:

American Airlines gains pre-market after the latest quarterly update beat forecasts. Total operating revenue more than doubled to over $9 billion as passenger numbers and freight load increased. Loss per share halved to $1.42. Capacity is expected to remain 8-10% below pre-pandemic levels in the coming quarter.

FX markets USD pauses, EUR held back by ECB minutes

The USD is edging a few points lower after weaker jobless claims and as the rally from earlier in the week runs out of steam. Instead, commodity currencies such as the AUD & CAD strengthened on optimism surrounding the global economic outlook.

EUR/USD trades under pressure despite German PPI inflation jumping 24.4% YoY in December, exceeding the 19.4% forecast. This was the 12th straight increase in PPI. Energy prices were the biggest contributor. Meanwhile the minutes from the latest ECB meeting contained few new surprises. The ECB is not looking to hike rates in 2022.

• GBP/USD +0.02% at 1.3615
• EUR/USD -0.05% at 1.1336

Oil eases from 7 year high, as oil inventories build

Oil prices are easing back from 7-year highs reached in the previous session as investors booked profits following a strong rally.

The API reported on Wednesday an unexpected build in oil inventories by 1.4 million barrels last week, rather than declining by 1.4 million.

However, the price remains well supported by short supply. Supply fears have deepened this week amid rising geopolitical tensions in Russia-Ukraine and in the Middle East following fresh attacks from Yemen’s Houthis on the UAE.

Furthermore, the OPEC+ group are failing to meet the upwardly revised output quota. The EIA said that the group production was around 800,000 barrels short of targets.

• WTI crude trades -0.4% at $85.29
• Brent trades -0.44% at $87.36

Looking ahead

• 15:00 Existing Home Sales
• EIA crude oil stockpiles