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Stocks are pointing to a muted open as investors weigh up the abolished mutiny in Russia over the weekend and look ahead to inflation data at the end of this week.

US futures

Dow futures -0.06% at 33710

S&P futures -0.06% at 4346

Nasdaq futures -0.02% at 14902

In Europe

FTSE -0.09% at 7453

Dax -0.14% at 15782

• Russia keeps traders wary
• Friday’s inflation data in focus after hawkish Fed comments
• USD falls as treasury yields fall
• Oil rises on Russia supply concerns 
   

Russia keeps trades on edge ahead of Friday’s inflation data

US stocks are set to open relatively flat after losses last week as investors weigh up developments in Russia and look ahead to US inflation data at the end of the week.

Stocks fell last week after a significant rally in recent weeks after Federal Reserve Chair Jerome Powell made it clear that more rate hikes were needed in order to tame inflation. In line with the FOMC meeting earlier in the month, Powell guided towards two more hikes, but that the Fed will remain data dependent.

Looking ahead, Friday’s core PCE print will be key in setting expectations for the future path of rate hikes from the Federal Reserve. Core PCE, the Fed’s preferred gauge for inflation, is still well above the central bank’s 2% target.

Meanwhile, investors will keep an eye on developments in Russia after an aborted rebellion by a group of mercenaries over the weekend. The market reaction has been limited, but investors will be watching to see to what extent Putin’s grip on power has been loosened.
 

Corporate news

Tesla falls after yet another broker downgrade. Goldman Sachs downgrades the stock from Buy to Neutral after a 38% rally in the past month alone.

Alphabet is falling after UBS downgraded the stock to neutral from buy, saying there are better risk-reward ratios elsewhere, such as with Meta.

Lucid jumps 11% on news of a deal with Aston Martin, of cash payments totaling $232 million in exchange for battery-electric powertrain components.
 

Nasdaq 100 outlook – technical analysis

The Nasdaq has broken back into its ascending channel dating back to early 2023, bringing the RSI out of overbought territory. The doji candle highlights the market’s indecision. Sellers need to break below 14785, last week’s low, and bring 14230, the June low, into play, ahead of 14000 round number. Meanwhile, on the upside, a rise back above 14965, the rising trendline support could give bulls fresh legs to attack 15287 and fresh year-to-date highs.

(Click on image to enlarge)

FX markets – USD falls, EUR rises

The USD is falling, tracking yields lower as investors buy into treasuries on safe-haven flows. The US 10-year treasury yields trade -1% at 3.7. The move lower in the USD comes after solid gains last week after hawkish commentary from Fed Chair Powell.

EURUSD is holding up despite German business morale falling by more than forecast in June. The IFO business climate index dropped to 88.5, down from 91.5 in May. The data supports the view that the German recession could be deeper than initially thought. ECB President Christine Lagarde will speak later as the ECB annual central bankers forum kicks off.

GBPUSD is falling, extending losses from last week, despite USD weakness. According to the CBI, retail sales fell for a second month in June, falling -9 from -10 in May. Households continue to struggle amid high inflation and rising interest rates. Last week the BoE surprised the market with a 50 basis point hike.

EUR/USD -0.7% at 108.78

GBP/USD -0.16% at 1.2720
 

Oil rises on Russia supply worries.

Oil prices are edging higher amid rising concerns over political stability in Russia and the potential impact on supply.

Over the weekend, a revolt by Russian mercenaries raised questions about President Putin's grip on power and concerns about possible disruptions to the Russian oil supply. Given that this was a short-lived incident, the impact on oil prices and isn't expected to be lasting; however, markets note that geopolitical risk amid instability in Russia has increased.

This comes after oil prices fell 3.6% last week amid concerns about slower economic growth and a weaker demand outlook as central banks remain hawkish.

According to the Baker Hughes rig count on Friday, the number of oil and natural gas rigs operated by US energy companies fell for the eighth straight week. This is often used as an early indicator of future oil output.

WTI crude trades -1.99% at $71.15

Brent trades at -1.8% at $75.74
 

Looking ahead

15:30 Dallas Fed Manufacturing Index

18:30 ECB President Lagarde speaks

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