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U.S. benchmark stock indexes looked likely to drift higher at Tuesday’s open, despite what is expected to be a seasonally challenging month for equities, following the best August returns in more than 30 years.
Brent crude futures for November advanced to $46.38 a barrel earlier, the highest since March, and was fetching $46.27 by 0656 GMT, up 46 cents, or 1%. U.S. West Texas Intermediate crude was at $43.25 a barrel, up 28 cents, or 0.7%.
The Fed’s new stance on inflation targeting is still being digested on Wall Street and has so far resulted in more pressure on the U.S. dollar, a factor that may also support further buying in stocks that boast large overseas businesses.
Looking ahead, the market is awaiting the U.S. IHS Markit purchasing managers index at 9:45 a.m. ET and the purchasing managers index report on manufacturing activity from the Institute for Supply Management for August at 10 a.m., with a consensus forecast for 54.7.
Overnight the eurozone IHS manufacturing purchasing managers index pointed to improving conditions in August, as the region’s recovery from the coronavirus pandemic continued, while in China the Caixin purchasing managers index, which is weighted toward small, private manufacturers, rose to 53.1 in August from 52.8 in July.
A report on U.S. construction spending for July also is due at 10 a.m., with report on motor vehicle sales coming throughout the day. Shares of Tesla Inc. TSLA, +12.56% extended its recent rocket ride by surging 6.3% in premarket trading Tuesday, putting them on track to open in record territory well above the $500 mark.
On the technical front, the RSI is at 24.32% and suggests that the market can move in the downward direction. The stochastic is forming the downside crossover. Overall Bias is positive and Short-term buy trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion–BUY Tesla Inc. at 497.05 Take Profit at 505.57 Stop Loss at 490.38