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Stocks rebound on US open

US stock markets opened higher on Thursday, recovering some of Wednesday's losses on the back of some encouraging economic data shortly before the bell.

We were seeing sentiment improving ahead of the open and we're off to a decent start. Don't get me wrong, this is still a fragile environment and we could see another wobble, even before the day is out, but it's encouraging to see a positive start to the session.

The drop in jobless claims was better than forecasts and may be driving a little optimism that the first quarter won't be as bad as feared, given the intense restrictions. I think it's a little early on that front but right now, small wins are useful.

GDP data for the final quarter was also a little weaker than expected but in a way, that's already old news. Vaccines are now being rolled out and more restrictions are in place in the near-term. The start of the year may be tougher than many expected but a strong rebound going into H2 should be cause for optimism.

The uplift also occurred around the same time that reports started emerging of possible restrictions on certain stocks on popular trading app Robinhood. Gamestop, AMC, Blackberry and others are making big losses today following the decision by the app. Although compared to what we've seen in recent days, it's still relatively small.

Whether this has contributed to the rebound in stock markets around the US open isn't clear but it will be interesting to see if other restrictions follow. We've seen the power of social media over the last week, the response will be very interesting indeed.

Oil up on inventory drop

Oil prices are up around 1% today, pushing them back towards the upper end of their recent ranges, with $54 being interesting resistance for WTI. A break above here could see it gather renewed momentum, something that it's continuing to lack during these surges. This points to further consolidation for now, with support around $51.50-52 being of interest. A large decline in inventories on Wednesday may have driven the surge in prices, with a softer dollar today providing further support.

Gold edges higher after failed USD breakout

A pullback in the dollar today is providing some upside for gold, which has been consolidating around $1,850 in recent weeks. Nothing much has really changed on that front and the Fed on Wednesday did little to change that. It reinforced its commitment to low interest rates and bond purchases and offered a slightly more downbeat assessment of the economy in the near-term, which allowed 10-year Treasury yields to ease back towards 1%. The dollar index failed to break above 91, which could have been bad news for gold. A breakout here, should determine the yellow metals near-term prospects, with support seen around 90.

Bitcoin survives another test

Bitcoin has survived the latest assault on $30,000 but I feel the battle may not yet be over. The resistance at this level has been impressive but further runs at it will surely see that weaken. It's trading around $32,000 at the time of writing but another run lower still looks likely. A break above $35,000 will make things more interesting to the upside. Until then, $30,000 will continue to look vulnerable.

Author

Craig Erlam

Craig Erlam

MarketPulse

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

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