US indices recoup losses; Boeing in focus

Summary:

• US benchmarks to begin little changed

• Indices bounce after 60 pt decline for US500

• Boeing shares called to open lower following tehran crash

Those who have not checked the US indices for the last 18 hour may think little has changed, with the major benchmarks trading not far from the levels seen on last night’s cash close. Shortly after the opening bell however, it is important to look at the price action seen out of hours where the markets swooned following Iran retaliatory strikes against the US, before recouping the losses in their entirety.

US indices are back in the green after some large selling overnight. Source: xStation 

This remarkable rebound could be attributed to a feeling that Iran’s retaliation seems to have been at the milder end of the scale and all eyes will now be on US president Donald Trump who is set to give a press conference at 4PM (GMT). The recovery in markets and corresponding drop in both the Oil price and Gold suggests that investors believe the worst of this could be behind them. As always though, Trump has the potential to be extremely unpredictable and until he states that the US won’t escalate this further there is still scope for downside shocks. 

The US500 has completed a round-trip from the sharp drop seen on news of Iran’s retaliation and traders will now be watching closely to see if price can get back above 3247 and have another tilt at 3263. Source: xStation 

On the data front the ADP employment change comfortably beat forecasts with a sizable upwards revision to the prior reading to boot and this will likely serve to ramp up expectations ahead of Friday’s NFP report.

One stock gaining attention on the open is Boeing, with the Aerospace firm starting lower by around 2% after one of its planes crashed in Tehran in an incident unrelated to the recent geopolitical tensions. It is also worth noting that Boeing has a sizable weighting on the US30 (circa 8%) and this explains why the index is lagging its peers somewhat. 

Boeing shares have begun a little lower after the crash in Tehran, with the price holding below the 100 SMA on W1. The region from 290-320 could be seen as highly significant longer term. Source: xStation