Futures Pointing To Mixed Open On Wall Street

The major U.S. index futures are currently pointing to a mixed open on Monday following the strong upward move shown by stocks to close out the previous week.

Energy stocks are likely to see early strength amid a jump by gasoline futures after a cybersecurity attack forced the shutdown of the largest fuel pipeline in the U.S.

Colonial Pipeline said it proactively took certain systems offline to contain the threat, temporarily halting all pipeline operations and affecting some of the company’s IT systems.

Gasoline for June delivery is currently surging up $0.307 or 1.4 percent to $2.1576 a gallon, while crude oil for June delivery is climbing $0.50 to $65.40 a barrel.

On the other hand, technology stocks are likely to see initial weakness following negative analyst comments about several big-name companies.

Oracle (ORCL) is seeing notable pre-market weakness after Barclays downgraded its rating on the business software giant’s stock to Equal Weight from Overweight.

Google parent Alphabet (GOOGL) and Facebook (FB) may also move to the downside after Citi downgraded both stocks to Neutral from Buy.

Goldman Sachs chief U.S. equity strategist David Kostin has also warned about the potential negative impact on the earnings of big-name tech companies if President Joe Biden’s corporate tax plan were fully enacted.

Stocks moved mostly higher during trading on Friday, extending the upward move seen on Thursday. With the continued advance, the Dow and the S&P 500 both ended the session at new record closing highs.

The major averages all ended the day firmly in positive territory. The Dow rose 229.23 points or 0.7 percent to 34,777.76, the Nasdaq advanced 119.40 points or 0.9 percent to 13,752.24 and the S&P 500 climbed 30.98 points or 0.7 percent to 4,232.60.

Despite the continued upward move, the major averages turned in a mixed performance for the week. The Nasdaq slumped by 1.5 percent, while the Dow surged up by 2.7 percent and the S&P 500 jumped by 1.2 percent.

The continued strength on Wall Street came following the release of a closely watched Labor Department report showing much weaker than expected job growth in the month of April.

The Labor Department said non-farm payroll employment rose by 266,000 jobs in April after surging by a downwardly revised 770,000 jobs in March.

Economists had expected employment to spike by 978,000 jobs compared to the jump of 916,000 jobs originally reported for the previous month.

The report also showed the unemployment rate inched up to 6.1 percent in April from 6.0 percent in March, while economists had expected the unemployment rate to drop to 5.8 percent.

Traders reacted positively to the report as the weaker than expected data reinforced the view the Federal Reserve will leave ultra-easy monetary policy in place for the foreseeable future.

Michael Pearce, Senior US Economist at Capital Economics, called the report a “clear reminder that the recovery in the labor market is lagging the rebound in consumption.”

“For the Fed, we suspect that means it will be a many months before it judges the economy has made ‘substantial further progress’ towards its ‘broad based and inclusive’ full employment goal,” Pearce said. “That means any talk of tapering, let alone rate hikes, is still some way off.”

The data led to a particularly strong upward move by high-growth tech stocks, which are seen as more susceptible to higher interest rates.

Oil service stocks moved sharply higher over the course of the session, resulting in a 5.2 percent spike by the Philadelphia Oil Service Index. The index ended the session at its best closing level in nearly two months.

The rally by oil service stocks came amid a modest increase by the price of crude oil, with crude for June delivery rising $0.19 to $64.90 a barrel.

Considerable strength was also visible among airlines stocks, as reflected by the 2.1 percent jump by the NYSE Arca Airline Index.

Steel stocks also showed a strong move to the upside on the day, driving the NYSE Arca Steel Index up by 2.1 percent to its best closing level in almost ten years.

Housing, networking, computer hardware and gold stocks also saw notable strength, reflecting broad based buying interest on Wall Street.

Commodity, Currency Markets

Crude oil futures are climbing $0.50 to $65.40 a barrel after rising $0.19 to $64.90 a barrel last Friday. Meanwhile, after advancing $15.60 to $1,831.30 an ounce in the previous session, gold futures are increasing $11.40 to $1,842.70 an ounce.

On the currency front, the U.S. dollar is trading at 108.70 yen versus the 108.60 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.2165 compared to last Friday’s $1.2166.

Asia

Asian stocks ended mostly higher on Monday as weaker than expected U.S. job growth in April eased concerns over the prospect of higher interest rates.

Chinese shares eked out modest gains, with healthcare firms climbing after European Union leaders cranked up their criticism of the United States’ call to waive COVID-19 vaccine patents.

The benchmark Shanghai Composite Index rose 9.12 points, or 0.3 percent, to 3,427.99, while Hong Kong’s Hang Seng Index ended marginally lower at 28,595.66.

Japanese shares advanced as investors awaited earnings from prominent firms for signs of progress in a pandemic-hit economy. The Nikkei 225 Index climbed 160.52 points, or 0.6 percent, to 29,518.34, while the broader Topix ended 1 percent higher at 1,952.27.

Toyota Motor advanced 1.7 percent, Honda Motor jumped 2.1 percent and Nissan Motor surged 4.4 percent ahead of their earnings results due this week.

Heavyweight SoftBank Group, which is scheduled to report results on Wednesday, rose 1.7 percent. Steelmakers Nippon Steel, Daido Steel and JFE Holdings jumped 5-7 percent.

Australian markets advanced, with higher commodity prices and encouraging data on retail sales and business conditions helping underpin sentiment.

The benchmark S&P/ASX 200 Index rallied 92 points, or 1.3 percent, to 7,172.80, while the broader All Ordinaries Index ended up 94.60 points, or 1.3 percent, at 7,419.80.

BHP, Rio Tinto, OZ Minerals and Fortescue Metals Group jumped 3-8 percent after iron ore and copper prices hit record highs on Friday. Casino giant Crown Resorts soared 7.3 percent and rival Star Entertainment climbed 7.7 percent after confirming a $12 billion merger proposal between the two.

Explosives and fertilizer maker Incitec Pivot plunged 8.9 percent after a further update on the Waggaman ammonia plant. Lender ANZ dropped 1.3 percent on going ex-dividend.

Seoul stocks hit a record high as a disappointing U.S. jobs report helped allay fears about higher inflation, interest rates and a cutback in stimulus. The benchmark Kospi surged up 52.10 points, or 1.6 percent, to 3,249.30.

Europe

European stocks are slightly lower on Monday as caution sets in after recent record gains on optimism about the reopening of economies and expectations of extended easy monetary policies.

While the U.K.’s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index and the German DAX Index are both down by 0.1 percent.

BioNTech shares have surged after the German biotech company revealed plans to build a new manufacturing site for its vaccines based on mRNA technology in Singapore.

Wacker Neuson has also moved notably higher. The light and compact equipment manufacturer had a successful start to 2021, with first quarter group revenue rising 5.6 percent relative to the previous year.

Victrex has also jumped. After posting a drop in first-half profit, the supplier of high performance polymer solutions said it remains comfortable with current full year expectations.

Bakery chain Greggs has also shown a strong move to the upside after saying it believes it could get back to normal profits this year.

Meanwhile, Capgemini shares have edged down slightly in Paris after the IT major said it has agreed to buy Multibook’s SAP global services line.

Provident Financial has slumped in London. The consumer finance company announced it is withdrawing from doorstep lending after 140 years.

Travel-related stocks are also declining after only 12 countries have made the initial “green list” where people can holiday abroad without having to quarantine on return to the U.K.

In economic news, Eurozone investor confidence improved to the highest level in more than three years in May, survey results from Sentix showed.

The investor confidence index rose notably to 21.0 in May from 13.1 in April, suggesting that the recession caused by the coronavirus has been overcome. The score was the highest since March 2018.

U.K. house prices reached a record high in April as a stamp duty holiday continued to provide impetus to the property market, data from Lloyds Bank subsidiary Halifax and IHS Markit showed on Monday.

House prices grew 1.4 percent month-on-month in April following a 1.1 percent rise in March. The average property was valued at GBP 258,204.

On a yearly basis, house price growth accelerated to 8.2 percent from 6.5 percent a month ago. This was the highest annual rate in five years.

U.S. Economic Reports

Chicago Federal Reserve President Charles Evans is due to speak on current economic conditions and monetary policy in a virtual Society for Advancing Business Writing and Editing Fireside Chat at 2 pm ET.

Stocks In Focus

Shares of Energizer Holdings (ENR) are moving notably higher in pre-market trading after the battery maker reported better than expected fiscal second quarter results and raised its full-year guidance.

Concert and live event promoter Live Nation (LYV) is also likely to see initial strength Jefferies upgraded its rating on the company’s stock to Buy from Hold.

Meanwhile, shares of Coty (COTY) may come under pressure after the beauty company reported fiscal third quarter earnings that came in slightly below analyst estimates

Hotel operator Marriott (MAR) may also move to the downside after reporting first quarter earnings that beat analyst estimates but weaker than expected revenues.