Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Monday, with stocks likely to show a lack of direction following the strong upward move seen last week.

U.S. stocks closed on a firm note on Friday as optimism about strong economic growth outweighed concerns about inflation, prompting traders to build up fresh positions at several counters.

The major averages all closed higher, with the S&P 500 hitting a new record high in the session and recorded its biggest weekly gain since February 2021, rising 2.7%. The index ended the session with a gain of 14.21 points or 0.33 percent at 4,280.70, slightly off a new high of 4,286.12.

The Dow, which climbed 3.4% in the week, its biggest weekly gain since March, ended Friday’s session with a gain of 237.02 points or 0.69 percent at 34,433.84, while the Nasdaq edged down 9.32 points or 0.06 percent to settle at 14,360.39. The Nasdaq gained about 2.4 percent in the week.

The Federal Reserve last week forecast rate hikes in 2023, but traders seemed to bet on hopes a tighter monetary policy is not imminent and despite any tapering of asset purchase program sometime in the not-too-distant future, the program will continue to support markets until that time.

The Fed is likely to begin tapering its asset purchase program in the not-too-distant future, but the program will continue to support the markets until that time.

In economic news today, a report from the Commerce Department showed the annual rate of core consumer price growth in May matched economist estimates. The reading on inflation said to be preferred by the Fed showed the annual rate of core consumer price growth accelerated to 3.4 percent in May from 3.1 percent in April.

The Commerce Department also said personal income slumped by 2.0 percent in May after plunging by 13.1 percent in April. Economists had expected personal income to tumble by 2.5 percent.

Meanwhile, the report showed personal spending was virtually unchanged in May after climbing by 0.9 percent in April. Personal spending was expected to rise by 0.4 percent.

A report from the University of Michigan said that its consumer sentiment reading for the US was revised lower to 85.5 in June from a preliminary reading of 86.4. Although market had expected to score to come in at 87.4, it still remained the second-highest since start of the pandemic.

Among the major movers, Nike soared more than 15 percent, hitting a new high in the process, after saying that its expects full-year sales to top $50 billion thanks to a rebound in its North American business. Nike reported fourth-quarter profit of $1.51 billion or $0.93 per share, compared to net loss of $0.79 billion or $0.51 per share last year.

Honeywell International, Amgen, Merck, Procter & Gamble, United Health, JP Morgan Chase and Walmart posted strong gains.

Commodity, Currency Markets

Crude oil futures are falling $0.26 to $73.77 barrel after climbing $0.75 to $74.05 a barrel last Friday. Meanwhile, after inching up $1.10 to $1,777.80 an ounce in the previous session, gold futures are slipping $1.20 to $1,776.60 an ounce.

On the currency front, the U.S. dollar is trading at 110.89 yen versus the 110.75 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1914 compared to last Friday’s $1.1935.

Asia

Asian stocks ended on a muted note Monday, as inflation continued to be a worry and a spike in coronavirus cases across several markets in the region over the weekend led to lockdowns and restrictions in some areas.

Traders also kept a close eye on Washington after President Joe Biden acknowledged there was no guarantee the infrastructure package would get through Congress.

The White House on Saturday stepped back from a call to link it to a wider tax-and-spending bill – including priorities like climate change mitigation, child care, schools and social services – that is opposed by Republicans. The announcement fanned fears he had threatened to veto the new agreement.

Chinese shares ended marginally lower as investors awaited manufacturing and non-manufacturing data for directional cues. Official data showed on Sunday that China’s industrial profits slowed again in May due to high base effects and increases in the costs of production.

Hong Kong’s Hang Seng index ended marginally lower at 29,268.30 as trading resumed following a morning suspension due to heavy rain in the city.

Japanese shares ended on a flat note after rising in the previous two sessions. The Nikkei average finished marginally lower at 29,048.02 ahead of key U.S. economic data due later in the week, including the June jobs report. The broader Topix index edged up 0.15 percent to settle at 1,965.67.

Tech stocks ended broadly lower. Chip-making equipment maker Tokyo Electron shed 1.6 percent, Advantest dropped 1.3 percent and Screen Holdings gave up 0.9 percent. Seven & i Holdings soared 4.5 percent after agreeing to sell some U.S. stories to settle FTC charges.

Australian markets ended marginally lower after New South Wales reported 30 new COVID-19 cases on Sunday, the first day of a two-week lockdown in Sydney and Darwin.

Travel and tourism stocks suffered heavy losses as fresh COVID-19 cases triggered tighter restrictions in four states. Flight Centre Travel Group, Qantas Airways and Webjet lost 3-4 percent.

Tech stocks also tumbled, with buy-now-pay-later firm Afterpay plunging as much as 7.5 percent. Retailers bucked the weak trend, with online retailer Kogan.com surging 6.6 percent. Supermarket giant Woolworths rallied 2.9 percent.

Seoul stocks fell to snap a four-day winning streak as coronavirus cases spiked across Asia and investors awaited cues from a slew of economic data due later in the week.

The benchmark Kospi finished marginally lower at 3,301.89 after closing at a record high the previous session. LG Chem lost about 1 percent and SK Hynix gave up 2 percent.

Europe

European stocks declined on Monday, as inflation worries persisted and COVID-19 cases spiked across Asia over the weekend.

Closer home, the Delta strain, which has already taken hold in the U.K., is becoming more prevalent elsewhere across Europe.

The pan-European Stoxx 600 dropped 0.3 percent to 456.50 after closing 0.1 percent higher on Friday.

The German DAX was marginally lower, France’s CAC 40 index gave up 0.3 percent and the U.K.’s FTSE 100 was down half a percent.

Travel stocks succumbed to selling pressure as investors remained concerned about a spike in COVID-19 cases across Asia over the weekend. TUI, easyJet, Ryanair Holdings and IAG lost 2-3 percent.

Miners were broadly lower after data over the weekend showed profit growth at China’s industrial firms slowed again in May.

BP Plc fell 1.3 percent, Royal Dutch Shell lost about 1 percent and Total SA shed 1.5 percent as oil prices slipped slightly after earlier climbing to their highest since October 2018.

Burberry Group shares slumped 7.2 percent as Marco Gobbetti quit as chief executive of the luxury fashion brand.

Petrofac shares fell over 2 percent. In its pre-close update for the six months ending 30 June 2021, the oil services group said its overall trading was in line with its expectations.

French drug maker Sanofi edged up slightly after it agreed to sell a portfolio of regional consumer brands to Stada.

JD Sports Fashion declined 1.3 percent. The company announced that its existing 50.02 percent intermediate holding company in Spain, Iberian Sports Retail Group SL, has entered into a conditional agreement to acquire 80 percent of the issued shares in Deporvillage SL.

U.S. Economic Reports
New York Federal Reserve President John Williams is scheduled to participate in a panel before a virtual Bank for International Settlements Andrew Crockett Memorial Lecture event at 9 am ET.

At 11 am ET, Philadelphia Federal Reserve Bank President Patrick Harker is due to speak on “Fintech Opportunities and Responsible Innovation for Community Banks” before a virtual Federal Reserve Innovation Office Hours Fireside Chat.

Federal Reserve Vice Chair for Supervision Randal Quarles is scheduled to speak on “Central Bank Digital Currency” before the 2021 Utah Bankers Association Annual Convention at 1:10 pm ET.