Futures Pointing To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to see further upside following the strong upward move seen last week.

The upward momentum on Wall Street comes as stocks continue to recover from the steep drop seen in the first month of the year.

Trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.

A report on consumer price inflation is likely to attract attention in the coming days, with the data potentially impacting the outlook for interest rates.

U.S. stocks closed mostly higher on Friday, with investors reacting to another batch of earnings updates, and digesting the non-farm payrolls data for the month of January.

Among the major averages, the Dow edged lower by 21.42 points or 0.1 percent to 35,089.74. The S&P 500 advanced 23.09 points or 0.5 percent to 4,500.53, while the Nasdaq climbed 219.19 points or 1.58 percent to settle at 14,098.01.

The Nasdaq gained nearly 2.5 percent for the week, while the Dow and the S&P 500 gained 1.1 percent and 1.5 percent, respectively.

The tech-laden Nasdaq rebounded today thanks to strong earnings news from Amazon (AMZN) that lifted the stock’s price up by a hefty 13.5 percent, the biggest single-session gain in about six years.

Shares of social media company Snap Inc. (SNAP) skyrocketed nearly 14.5 percent, lifted by strong earnings. Pinterest (PINS) soared more than 11 percent.

Salesforce.com (CRM), JP Morgan Chase (JPM) and Goldman Sachs (GS) gained 2.5 to 3 percent. Microsoft (MSFT), Walt Disney (DIS), Chevron (CVX) and American Express (AXP) also posted impressive gains.

Meanwhile, 3M (MMM), Wallgreens Boots Alliance (WBA), P&G (PG), Home Depot (HD), Visa (V), Walmart (WMT) and Coca-Cola (KO) were among the notable losers.

The Labor Department said employment jumped by 467,000 jobs in January compared to economist estimates for an increase of 150,000 jobs.

The report also showed the increase in employment in December was upwardly revised to 510,000 jobs compared to the previously reported 199,000 jobs.

Meanwhile, the Labor Department said the unemployment rate inched up to 4.0 percent in January from 3.9 percent in December. Economists had expected the unemployment rate to hold unchanged.

Expectations for more aggressive tightening by the Federal Reserve lifted bond yields. The yield on long term U.S. 10-year Treasury note rose above the 1.9 percent mark for the first time in more than two years.

Commodity, Currency Markets

Crude oil futures are slumping $1.14 to $91.17 a barrel after spiking $2.04 to $92.31 a barrel last Friday. Meanwhile, after rising $3.70 to $1,807.80 an ounce in the previous session, gold futures are climbing $7.50 to $1,815.30 an ounce.

On the currency front, the U.S. dollar is trading at 114.94 yen versus the 115.26 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1443 compared to last Friday’s $1.1449.

Asia

Asian stocks ended mostly lower on Monday as an upbeat U.S. jobs report fanned concerns about the Federal Reserve’s hawkish policy tightening.

Geopolitical tensions and inflation concerns supported gold prices while Brent oil fluctuated in Asian trading following a run of seven weekly gains.

Chinese shares rallied as traders returned to their desks after a week-long holiday for the Lunar New Year. The benchmark Shanghai Composite index climbed 68.14 points, or 2.03 percent, to 3,429.58 while Hong Kong’s Hang Seng index ended on a flat note at 24,579.55, reversing an early slide.

Investors shrugged off the latest survey from Caixin showing that China’s services sector expanded at a slower pace in January. The corresponding PMI dropped to 51.4 from 53.1 in December. The composite index slipped to 50.1 in January from 53.0 in December.

Japanese stocks declined after disappointing earnings results from some industrial companies. The Nikkei average fell 191.12 points, or 0.70 percent, to 27,248.87 while the broader Topix index closed 0.24 percent lower at 1,925.99.

Olympus Corp slumped 12.2 percent and Taiyo Yuden lost 9.1 percent after posting weak financial results.

Shipping firm Nippon Yusen slumped 5.3 percent, chipmaker Advantest declined 2.7 percent and Uniqlo store operator Fast Retailing shed 1.6 percent while banks and energy stocks advanced. Tech startup investor SoftBank Group rose 2.6 percent.

Australian markets recoupled early losses to end on a flat note after the government said it would reopen borders to tourists on February 21. Investors also reacted to data showing that the country’s retail sales volumes rose a record 8.2 percent in the December quarter 2021, seasonally adjusted.

The benchmark S&P/ASX 200 index ended down 9.40 points, or 0.13 percent, at 7,110.80, after having fallen nearly 1 percent earlier in the day. The broader All Ordinaries index ended largely unchanged at 7,414.20.

Banks and healthcare stocks led losses while energy companies, miners and travel-related stocks advanced. Australia and New Zealand Banking Group dropped 1.9 percent after reporting worse-than-expected first-quarter margins.

Markets in New Zealand were closed for a holiday. Seoul stocks fell slightly, as rate-hike worries and record Covid-19 cases in the country prompted traders to book some profits after a three-day rally. The Kospi average slipped 5.20 points, or 0.19 percent, to close at 2,745.06.

LG Chem plunged as much as 5.8 percent while SK Hynix, Samsung Electronics and Hyundai Motor gave up 1-2 percent. LG Energy Solution shares surged 8.7 percent ahead of the upcoming MSCI review.

Europe

European stocks were mostly higher on Monday, though underlying sentiment remained cautious amid anxiety around the outlook for monetary policy.

As inflation concerns mount, investors await U.S. CPI data as well as the January Fed minutes this week for directional cues.

A strong inflation reading is likely to help consolidate expectations of a 50bp hike by the Federal Reserve.

In economic releases, investors shrugged off data showing that German industrial production declined unexpectedly in December.

Industrial output dropped 0.3 percent month-on-month, in contrast to the 0.3 percent rise in November, Destatis reported. This was the first fall in three months. Economists had forecast a monthly growth of 0.4 percent.

On a yearly basis, industrial production decreased 4.1 percent, following a 2.2 percent drop in the previous month.

Separate data published by the Sentix research group showed that Eurozone’s investor sentiment index rose to 16.6 in February from 14.9 in January, extending its upbeat momentum for the second month of 2022.

The pan European Stoxx 600 rose 0.2 percent to 463.05 after losing 1.4 percent on Friday. The German DAX and the U.K.’s FTSE 100 both edged up around 0.2 percent, while France’s CAC 40 index was marginally higher.

Miners Anglo American, Antofagasta, Glencore and Rio Tinto rose between 0.7 percent and 1.3 percent after aluminium prices in China jumped 3 percent to scale a 3-1/2-month high amid supply concerns and expectations of strong demand.

Steel and iron ore futures also rose after China’s state planner said it would accelerate the construction of new infrastructure.

Oil & gas firm BP Plc dropped 1.3 percent and Shell was little changed as oil prices fluctuated in see-saw trading.

Faurecia shares rallied 2.5 percent. The French car parts supplier said its new combination with Hella would result in it aiming for sales of above 33 billion euros ($37.72 billion) in 2025.

Aurubis AG, the largest copper producer in Europe, jumped 3 percent after raising its earnings forecast.

Ceconomy tumbled 4.5 percent. The consumer electronics retailer reported that its adjusted EBIT, before non-recurring effects, associates and portfolio changes, for the first quarter declined to 274 million euros from 346 million euros in the year-ago period.

U.S. Economic Reports

The Federal Reserve is scheduled to release its report on consumer credit in the month of December at 3 pm ET. Consumer credit is expected to increase by $21.0 billion.