US Stock Futures Rally on US/Iran Optimism
Stocks Rally on Monday
US stocks are bouncing back today after both the US and Iran agreed to end the military strikes which took place over the weekend and resume negotiations aimed at delivering a peace deal. While there is still need for caution given how precarious the situation is, softer oil prices and a weaker US Dollar on Monday are feeding into better sentiment for sticks with the S&P futures up sharply on the day, reversing the heavy selling we saw on Friday.
Fresh Peace Talks
The US has proposed a new round of talks to take place in Doha this week, potentially as early as tomorrow. If confirmed and talks go ahead this should help further bolster risk sentiment near-term, with any positive headlines on the back of those talks set to push stocks firmly higher. However, if those talks don’t go ahead or if negative headlines emerge on the back of them, this could see stocks shifting lower again as oil and USD creep higher on fears of fresh military action materialising.
Warsh to Speak
Traders will also be watching Fed chairman Warsh’s Sintra speech on Tuesday ahead of the NFPs on Thursday. This will be one of the first opportunities to hear from Warsh since the June FOMC and any hawkish sentiment poses big risks for stocks near-term. However, Warsh’s comments are more likely to remain neutral, putting the bigger focus on Thursday’s jobs data where again there are bearish risks for stocks if we see any upside surprises in the data.
Technical Views
ES (Mini S&P Futures)
The correction lower has stalled for now into the 7.362 level and bull channel lows with price now bouncing again. While that floor remains intact, focus is on a fresh test of the 7,537.75 level and a return to YTD highs. If we reverse below that level, however, 7,240.25 will be the next support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.