Futures Pointing To Mixed Open On Wall Street

The major U.S. index futures are currently pointing to a mixed open on Monday, with the Dow futures down by 118 points but the Nasdaq futures up by 60.50 points.

Stocks moved sharply higher during trading on Friday, extending the rebound from the sell-off seen early in the previous session. With the upward move on the day, all three of the major averages ended the session at new record closing highs.

The major averages reached new highs for the session going into the close. The Dow spiked 448.23 points or 1.3 percent to 34,870.16, the Nasdaq jumped 142.13 points or 1 percent to 14,701.92 and the S&P 500 surged up 48.73 points or 1.1 percent to 4,369.55.

For the holiday shortened week, the Dow edged up by 0.2 percent, while the broader Nasdaq and S&P 500 both rose by 0.4 percent.

The strength on Wall Street came as traders quickly shrugged off the concerns about the global economy that weighed on the markets in early trading on Thursday.

Combined with the recovery attempt seen as yesterday’s trading progressed, the major averages more than offset the early pullback.

Despite worries about the spread of the delta variant of the coronavirus, traders seem optimistic the U.S. economy will continue to outperform.

A rebound by treasury yields also generated buying interest, with the yield on the benchmark ten-year note bouncing off its lowest closing level since February.

Yields had fallen sharply in recent sessions amid indications the Federal Reserve is not in a hurry to begin scaling back its asset purchase program.

Steel stocks turned in some of the market’s best performances on the day, resulting in a 4.1 percent spike by the NYSE Arca Steel Index.

The rebound by treasury yields also contributed substantial strength among banking stocks, driving the KBW Bank Index up by 3.9 percent.

Oil service stocks also moved sharply higher over the course of the session, resulting in a 2.8 percent spike by the Philadelphia Oil Service Index. The index bounced off its lowest closing level in over a month.

The rally by oil service stocks cane amid a sharp increase by the price of crude oil, with crude for August delivery jumping $1.62 to $74.56 a barrel.

Transportation, brokerage and gold stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are sliding $0.78 to $73.78 barrel after jumping $1.62 to $74.56 a barrel last Friday. Meanwhile, after climbing $10.40 to $1,810.60 an ounce in the previous session, gold futures are falling $9.10 to $1,801.50 an ounce.

On the currency front, the U.S. dollar is trading at 110.19 yen versus the 110.14 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1853 compared to last Friday’s $1.1876.

Asia

Asian stocks rose on Monday as Treasury yields stabilized after Friday’s jump and China’s central bank moved to boost liquidity, given concerns over slowing economic growth.

Chinese shares advanced after the country’s central bank cut the amount of money commercial lenders must set aside as reserves in an effort to sustain a recovery from the pandemic.

The benchmark Shanghai Composite index inched up 23.75 points, or 0.67 percent, to 3,547.84 while Hong Kong’s Hang Seng index ended up 170.70 points, or 0.62 percent, at 27,515.24.

Japanese shares rebounded, with cyclicals gaining ground on economic optimism after data showed core machinery orders rose for the third straight month in May.

The total value of core machine orders in Japan climbed a seasonally adjusted 7.8 percent month on month in May, the Cabinet Office said. That exceeded expectations for an increase of 2.6 percent.

On a yearly basis, core machine orders jumped 12.2 percent – again beating forecasts for 6.3 percent after rising 6.5 percent in the previous month.

The Nikkei average jumped 628.60 points, or 2.25 percent, to close at 28,569.02, while the broader Topix index ended 2.14 percent higher at 1,953.33.

Robotics company Yaskawa Electric surged 6.5 percent after raising its annual operating profit forecast by 29 percent. Peer Fanuc soared 6.6 percent and materials maker Showa Denko climbed 5.7 percent while shipping firms led losses. Kawasaki Kisen Kaisha lost 2.7 percent and Nippon Yusen dropped 1.3 percent.

Australian markets rose notably as miners benefited from higher gold and base metals prices.

The S&P/ASX 200 index climbed 60.20 points, or 0.83 percent, to 7,333.50, while the broader All Ordinaries ended up 59.60 points, or 0.79 percent, at 7,604.90.

Mining heavyweights BHP and Rio Tinto jumped 3.2 percent and 1.8 percent,
respectively while gold miners Northern Star Resources and Evolution Mining rose 1-2 percent.

Australian Pharmaceutical Industries soared 19.7 percent after an unsolicited takeover offer from Wesfarmers. Shares of the retail conglomerate ended half a percent higher.

Energy stocks ended broadly lower as oil prices slipped in Asian trade on global growth worries. The big four banks ended up between 0.4 percent and 0.6 percent.

A government report showed the total number of building permits issued in Australia was down a seasonally adjusted 7.1 percent sequentially in May, matching expectations.

Seoul stocks ended higher to snap a three-day losing streak amid optimism that second-quarter corporate earnings could surprise on the upside.

The Kospi average climbed 28.52 points, or 0.89 percent, to settle at 3,246.47 after losing 2.6 percent in the past three sessions on concerns over the rapid spread of the highly transmissible Delta plus variant of the coronavirus.

Pharmaceutical firm Samsung Biologics gained 1.5 percent, automaker Hyundai Motor added 1.8 percent and chemical firm LG Chem rallied 1.9 percent.

Europe

European stocks were moving lower in cautious trade on Monday after leaders of the G20 nations admitted that COVID-19 variants could threaten the economic recovery from the pandemic.

There were over 2.6 million new cases last week, with Europe experiencing a sharp increase of 30 percent, the WHO said in its latest epidemiological update.

Investors also awaited cues from the U.S. earnings season, the release of inflation data in several countries, and testimony by Federal Reserve Chair Jerome Powell.

The pan European Stoxx 600 was marginally higher at 457.70 after rising 1.3 percent on Friday. The German DAX edged down marginally, France’s CAC 40 index eased 0.3 percent and the U.K.’s FTSE 100 fell 0.6 percent.

Credit Suisse shares dropped 1.6 percent. The Swiss lender announced that Floriana Scarlato has decided to leave the company with immediate effect to pursue a new challenge outside the bank.

Shares of Daily Mail & General Trust advanced 1.7 percent. The British media group said that its controlling shareholder, Rothermere Continuation Ltd., is considering a bid for the remaining assets of the group, if the sales of its insurance risk unit and Cazoo business go through.

Tate & Lyle, a supplier of food and beverage ingredients, gained 1.5 percent after it announced an agreement to sell a controlling stake in its Primary Products business to KPS Capital Partners, LP.

Car insurance provider Admiral Group rallied 3.3 percent. The company said it anticipates a higher than expected Group profit before tax from continuing operations for the first half of 2021 in the range of 450 million pounds to 500 million pounds.

French IT consulting group Atos plunged as much as 17 percent after it booked lower-than-expected profitability in the first half and cut financial targets for the year.

U.S. Economic Reports

New York Federal Reserve President John Williams is scheduled to speak beforea virtual “Inflation: Dynamics, Expectations and Targeting” event organized by the Bank of Israel and Center for Economic and Policy Research at 9:30 am ET.

At 11:30 am ET, the Treasury Department is due to announce the results of this month’s auction of $58 billion worth of three-year notes.

Minneapolis Federal Reserve President Neel Kashkari is scheduled to participate in an Allianz Employee Virtual Town Hall at 12 pm ET.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $38 billion worth of ten-year notes.