US pre-open: Stocks likely to wane as State of the Union address falls flat

Price: 87.26

Chg: -0.00

Chg %: -0.00%

Date: 12:25

Price: 2,035.85 Chg: 13.30 Chg %: 0.66% Date: 12:29

Markets look set to fall on Wednesday after the State of the Union address on Tuesday night failed to excite Dow Futures.
IG analyst Alastair McCaig said: “Last night’s State of the Union address from Barack Obama was a little baffling as he chose to highlight a number of policies that, due to Republican outlooks, already seem doomed to failure. As a platform to announce new directions or objectives this feels like a missed opportunity and left the impression of ‘as you were’.”

According to Jasper Lawler from CMC Markets, “A mixed bag of earnings and uncertainty over future monetary policy in Europe is keeping volatility in US markets supressed this week with the S&P 500 capped at around 2,030 and 17,540 an issue for the Dow Jones Industrial Average.”

Spreadex analyst Connor Campbell said: “The initial panic caused by this shock SNB decision slowly turned to optimism as equity markets took this as a further signal that the ECB would embark on its own QE scheme in the near future.

McCaig continued: “As much as the US banking sector might have underperformed, there is still time for an improvement and today’s US Bancorp, American Express and eBay results will be first up to improve sentiment.”

Campbell added: “With it almost time for the ECB to face the music tomorrow, the Eurozone indices were struck by less than reassuring comments by the Central Bank’s Ewald Nowotny, who warned the markets to check their expectations for tomorrow, whilst downplaying the potential of a euro break-up. This caused the Eurozone markets to appear flat as investors become more wary over the chances of disappointing news arising from the ECB meeting on Thursday.”

Oil prices were slightly up, early on Wednesday, with WTI rising 0.5% at $ 46.69 a barrel and Brent increasing 1.1% to $ 48.52 a barrel.

Over on COMEX, gold futures were advancing 0.43% to $ 1,299.80 while the dollar was advancing against the pound while falling against the yen and the euro.