Investors anticipate fresh earnings reports and a meeting of the Federal Reserve
Wall Street stocks saw a mixed finish in volatile trading on Monday as investors anticipate fresh earnings reports and a meeting of the Federal Reserve which ends Wednesday. Also, Biden’s party holds only the slimmest possible majority in the Senate, raising doubts about approval of his $1.9-trillion plan. As such, the S&P 500 rose 0.36%, the Dow Jones Industrial Average dipped 0.12%, and the Nasdaq Composite rose 0.69%.
In Asia, equities were lower across the board on Tuesday, retreating from record highs amid stimulus worries and the ongoing pandemic. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.7%. In China, the Shanghai Composite index dropped 1.51% after the central bank withdrew cash from the banking system.
European stocks opened mostly higher on Tuesday, as market sentiment has improved somewhat. Still, downside risks continue to persist in the short term despite a mild bounce in the US stock index futures. In Italy, Prime Minister Giuseppe Conte is expected to resign today after a morning cabinet meeting. In individual stocks, UBS reported a net income of $1.71 billion for the fourth quarter of 2020, a 137% jump on the year.
Meanwhile, the greenback climbed to one-week highs in recent trading amid a more downbeat tone surrounding risky assets. However, gains in the USD looks limited, with the euro getting flat during the European hours after an earlier decline to the 1.2100 area that acted as support. Still, bullish potential in the EURUSD pair is being capped by the 20-DMA that represents the key immediate resistance ahead of the two-day FOMC meeting.
Elsewhere, Brent crude is off intraday lows after an earlier dip. Oil prices continue to trade within a tightening range, struggling for direction these days. The futures continue to derive support from the 20-DMA that arrives around $54.55. The upside potential is now capped by a stronger dollar in combination with the prevailing risk-off tone in the global financial markets.