US futures

Dow future 0.69% at 43450

S&P futures 0.91% at 5992

Nasdaq futures 1.84% at 21476

In Europe

FTSE 1.52% at 8516

Dax  1.28% at 20888

• US treasury yields dip & USD fell, lifting sentiment
• US earnings season has booted the mood
• GBP/USD falls further after weak retail sales
• Oil rises for a 4^th straight week

US stocks post strongest weekly rise since November

U.S. stocks are heading higher on Friday with the S&P 500 and the Dow Jones set to book the strongest weekly advances since November, and as investors wait for further clues regarding Tump’s policies next week.

Stronger-than-expected earnings from major banks as they kicked off earnings season and signs that underlying inflation is cooling have boosted risk sentiment this week, helping the S&P 500 and the Dow Jones log steep weekly rises.

U.S. Treasury yields have dipped this week, with the benchmark 10-year note now at a weekly low of 4.58%. However, the market will likely be on edge at the start of next week when Trump takes over the White House on Monday. In his inauguration speech, he could provide further insights into his plans on tax cuts, trade tariffs, and looser regulation.

Trump's policies are expected to be inflationary and could spark a trade war, impacting global markets. However, some concerns regarding Trump’s policies have been priced in.

Heading towards the end of January, the Federal Reserve will meet again and is not expected to cut interest rates. The market sees the first rate cut from the Fed potentially coming in June.

Corporate news

Apple is set to open almost 1% higher, recovering from yesterday's losses when it suffered its last day since August. Apple sold off yesterday on news that it was dethroned as China's biggest smart for sale phone seller in 2024 as local rivals Vivo and Huawei overtook the iPhone maker.

Microsoft is set to rise modestly after the software giant announced that it is adding AI tools to its consumer Microsoft 365 bundle, lifting the price in the US for the first time since introducing subscription over a decade ago.

Rivian is set to pen almost 3% higher after reports that German automobile giant Volkswagen is considering ways to deepen its partnership with the US EV maker.

Dow Jones forecast – technical analysis.

The Dow Jones has recovered from the 41,750 January low, rising above the 100 SMA and 43,400 resistance, the late December high. A rise above here create a higher high and put the bulls back in control. The 50 SMA at 43,580 comes into focus ahead of 44k. Immediate support is at 42,750 the 100 SMA; below that, support can be seen at 42,250, ahead of the 41,750 support zone. A break below here creates a lower low, and bears could gain momentum.

FX markets – USD steady, GBP/USD falls

The USD is holding steady at the end of the week as attention turns to Trump’s inauguration. However, the greenback is still on track to end the week at a low, snapping a six-week winning run. The dollar has surged in recent weeks on the back of rising treasury yields, reflecting expectations of inflationary policies from Trump. Treasury yields eased this weak after softer US inflation data.

 EUR/USD is holding steady around the 1.03 level with ECB- Fed rate divergence priced in. Data today confirmed Eurozone inflation remained at 2.4% YoY in December, in line with expectations. Core inflation remained at 2.7%. The ECB is still set to cut rates at the end of the month. Yesterday, the ECB December meeting minutes showed policymakers saw inflation reaching the 2% tater level sooner than expected.

GBP/USD is falling after UK retail sales were weaker than expected. They fell 0.3% month on month in December, down from 0.1% growth in December and below the 0.4% rise forecast. The data adds to the glum figures received across the week, which showed the UK economy group by a weak than expected 0.1% in November. The glum economic data has been coming in since Labour announced the biggest tax rises since 1993 in her October budget.

Oil rises for a 4th straight week

Oil prices are holding steady below $78 after yesterday's losses, but are still on track to book gains of 2.7% across the week, marking the fourth straight weekly increase.

Oil has been boosted across the week as investors assessed the impact of U.S. sanctions, which have heightened expectations of oil supply disruptions.

Supply concerns, renewed hopes of US interest rate cuts, and crude stockpile draw have helped support oil prices.

Meanwhile, data from China was also encouraging. The world's top oil importer fulfilled its government's ambitions of 5% growth for the year. China posted Q4 GDP of 5.4% its strongest reading since Q2 of 2023.