Dow Jones Forecast: DJIA eases from a record high, earnings are in focus

US futures

Dow futures -0.17% at 37960

S&P futures +0.11% at 4855

Nasdaq futures 0.17% at 17393

In Europe

FTSE -0.17% at 7476

Dax -0.16% at 16625

US muted after record highs yesterday
Earnings season ramps up this week with NFLX after the close
Oil gives back yesterday's gain

Stocks ease back from record highs

U.S. stocks point to a subdued start as investors look to a slew of quarterly corporate earnings and wait cautiously for key economic data later in the week.

The muted start comes after record highs in the previous session, which saw the Dow Jones rise above 38,000 for the first time and the S&P 500 book its third straight positive close for the first time this year.

After a weak start to 2024, stocks have rebounded strongly thanks to optimism over a soft landing and a strong performance in AI and chip-related stocks. The turnaround has come despite the market pushing back on rate cut expectations and pricing in less than a 50% probability of a rate cut in March, down from 85% late last year.

With no high-impacting economic data in focus today, all eyes are on corporate earnings with several big names due to report including Johnson and Johnson Procter and Gamble, 3M and Netflix and chipmaker Texas Instruments after the close.

Corporate news

United Airlines is flying around 6% higher after the airline posted 4Q results that beat estimates and despite the airline saying it expects a wider than forecast loss in the current quarter owing to the grounding of the Boeing 737 Max 9 jets. United Airlines posted EPS of $2.00 on revenue of $13.63 billion thanks to its busiest-ever travel period in the last two weeks of December.

Netflix is set to report after the close, and expectations are upbeat as the streaming giant continues to crack down on password sharing and thanks to the ad-supported tier. Expectations are for another quarter of surging subscriber numbers, which is set to rise by another 9 million, whilst EPS is expected to come in at $2.20 on revenue of $8.71 billion.

Dow Jones forecast – technical analysis

After a period of consolidation, the Dow Jones rose to a record high of over 38,000. The upside remains intact whilst buyers keep the price above 37,800, the previous high. A break below here could bring 37130, last week’s low, into focus.

FX markets – USD rises EUR/USD rises

The USD is rising after a weaker start as investors look ahead to key U.S. data at the end of the week. US GDP and core PCE Could provide further cues over the timing of the first-rate cut from the Fed.

EUR/USD is struggling against the stronger U.S. dollar as investors look cautiously ahead to the ECB interest rate decision later in the week. Consumer confidence is due to be released today and is expected to improve slightly. While this won't directly impact the ECB interest rate decision, it could be a signal or a sign that the economic slowdown in the eurozone has started to bottom out.

GBP/USD is showing resilience against the stronger U.S. dollar after UK government borrowing was significantly lower than expected at £7.77 billion, down from £13.2 billion a year earlier. This gives the government some wiggle room to cut taxes in the March budget should inflation continue falling towards 2%

Oil gives back yesterday’s gains.

Oil prices are falling after a 2% rally on Monday as investors continue to assess supply and demand factors.

An escalation in tensions in the Middle East supports the price as US and UK forces conducted further strikes on Houthi targets in Yemen.

Meanwhile, severe cold weather in the US is hitting supply. North Dakota's oil output remained impacted by the extreme weather conditions.

On the demand side, concerns over the health of the Chinese economy continue hurt the demand outlook for oil.

Crude inventories are due later and are expected to decline with the API report anticipated show fall of roughly 3,000,000 barrels.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.