Futures Pointing To Mixed Open On Wall Street

The major U.S. index futures are currently pointing to a mixed open on Monday as traders look ahead to the Federal Reserve’s monetary policy announcement.

Traders may be reluctant to make significant moves ahead of the Fed’s likely increase in interest rates on Wednesday.

The Fed is widely expected to raise interest rates by 25 basis points, with traders likely to pay close attention to the accompanying statement for clues about further rate hikes.

The central bank is likely to continue raising rates over the comings months in an effort to combat elevated inflation, although the economic impact of the Russia-Ukraine conflict may affect the pace.

The ongoing war will subsequently remain on investors’ minds, as another round of peace talks are being held today.

Some buying interest may be generated in reaction to a sharp drop by the price of crude oil, with stocks largely moving inversely to oil prices in recent sessions.

After opening on a strong note, U.S. stocks pared gains and slipped deeper into the red to eventually close on a very weak note on Friday, with technology stocks suffering sharp losses.

The major averages all ended notably lower. The Dow, which climbed to 33,515.61 in early trading, ended with a loss of 229.88 points or 0.7 percent at 32,944.19. The S&P 500 settled lower by 55.21 points or 1.3 percent at 4,204.31, well off the day’s high of 4,291.01, and the Nasdaq ended down by 286.15 points or 2.2 percent at 12,843.81.

The Dow shed about 2 percent for the week, moving lower for the fifth straight week. The Nasdaq and S&P 500 lost 3.5 percent and 2.9 percent, respectively for the week.

Rising worries about the economic impact of the ongoing Russia-Ukraine war and the various sanctions imposed on Russia by the U.S. and the Western allies rendered the mood bearish.

The U.S. President Joe Biden called to downgrade Russia’s “most favored nation” status as a trading partner.

Data showing a bigger than expected drop in U.S. consumer sentiment in the month of March also weighed on the markets. Consumer sentiment in the U.S. fell to its lowest level in over ten years in the month of March, according to a report released by the University of Michigan.

The report showed the consumer sentiment index slid to 59.7 in March from 62.8 in February. Economists had expected the index to dip to 61.4. With the bigger than expected decrease, the consumer sentiment index dropped to its lowest level since hitting 59.5 in September 2011.

One-year inflation expectations jumped to 5.4 percent in March from 4.9 percent in February, while five-year inflation expectations held at 3.0 percent.

While the report showed index of current economic conditions edged down to 67.8 in March from 68.2 in February, the index of consumer expectations slumped to 54.4 from 59.4.

Nike, Apple, JP Morgan, 3M, Microsoft and Intel declined 1.7 to 2.7 percent. Several other top stocks, including United Health, Walt Disney, Boeing, P&G, Honewell International, Goldman Sachs and American Express also ended notably lower.

Shares of Meta Platforms fell sharply amid concerns that the user growth could slow further after Russia restricted access to the group’s Instagram platform and launched a criminal probe in the company following the social media giant changing its policy on hate speech to allow statements such as “death to Russian invaders” on its platform.

McDonalds surged up more than 2 percent. Caterpillar, Travelers Companies and Amgen also closed notably higher.

Commodity, Currency Markets

Crude oil futures are plunging $4.62 to $104.71 a barrel after surging $3.31 to $109.33 a barrel last Friday. Meanwhile, after falling $15.40 to $1,985 an ounce in the previous session, gold futures are sliding $17.70 to $1,967.30 an ounce.

On the currency front, the U.S. dollar is trading at 117.90 yen versus the 117.29 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0954 compared to last Friday’s $1.0912.

Asia

Asian stocks ended mixed on Monday as the Russia-Ukraine war dragged on and investors awaited the outcome of the Federal Reserve’s policy meeting this week for clues about further interest rate hikes and policy tightening for the rest of the year.

Chinese and Hong Kong markets succumbed to heavy selling pressure as the spreading new coronavirus outbreaks in China added to global uncertainty. Sentiment was also dented after data showed a sharp drop in February’s new bank lending in China.

China’s Shanghai Composite Index tumbled 86.21 points, or 2.6 percent, to 3,223.53, while Hong Kong’s Hang Seng Index plunged 1,022.13 points, or 5 percent, to 19,531.66.

Japanese shares advanced as oil prices continued to retreat and investors remained optimistic over the Russia-Ukraine peace talks. The Nikkei 225 Index climbed 145.07 points, or 0.6 percent, to 25,307.85, while the broader Topix ended 0.7 percent higher at 1,812.28.

Travel-related stocks surged after Prime Minister Fumio Kishida said over the weekend the government was preparing to restart the “GoTo Travel” subsidy program. Travel agency H.I.S. jumped 7.5 percent and airline ANA Holdings added 2.9 percent.

Automakers Honda, Nissan and Toyota Motor rose 1-3 percen,t while chipmaking giant Tokyo Electron added 1.3 percent and peer Advantest surged 2.2 percent.

Banks Mitsubishi UFJ Financial and Mizhuo Financial gained 2-3 percent as higher long-term global bond yields improved the outlook for profits.

Australian stocks rose sharply, led by gains by financial and healthcare stocks. The benchmark S&P/ASX 200 Index climbed 85.80 points, or 1.2 percent, to 7,149.40, while the broader All Ordinaries Index ended up 82.90 points, or 1.1 percent, at 7,422.20.

Banks ANZ, Commonwealth and Westpac surged 2-3 percent while biotech firm CSL advanced 2.6 percent. Commodity-linked shares underperformed as iron ore futures slumped and oil extended last week’s declines amid signs of rising COVID-19 cases in China.

Fuel supplier Ampol added 2.6 percent after selling its New Zealand unit Gull for NZ$572 million ($389.53 million).

Seoul stocks finished lower for a second straight session as investors turned risk-averse ahead of a slew of central bank meetings this week. The Kospi slid 15.63 points, or 0.6 percent, to 2,645.65. Tech firms led losses, while financial heavyweights such as KB Financial Group and Kakao Bank advanced.

Europe

European stocks have moved higher on Monday as investors express hopes for a diplomatic solution to end the weeks-long conflict in Ukraine. The next round of peace talks is scheduled for today, with officials on both sides offering cautious optimism.

“There are certain positive shifts, negotiators on our side tell me,” Russian President Vladimir Putin said in a meeting with his Belarusian counterpart Alexander Lukashenko on Friday.

While the U.K.’s FTSE 100 Index has edged up by 0.2 percent, the French CAC 40 Index and the German DAX Index are jumping by 1.5 percent and 1.7 percent, respectively.

DEUTZ has soared. The internal combustion engine manufacturer increased its revenue by almost 25 percent in fiscal 2021 and improved EBIT margin before exceptional items by around 8 percentage points to 2.3 percent.

Automakers have also moved sharply higher, with Volkswagen spiking after the German company doubled its operating profit.

AstraZeneca shares have also risen. The pharmaceutical company said its cancer drug Lynparza, developed along with Merck has been approved by the U.S. FDA for the treatment of early stage breast cancer.

Bodycote has also moved to the upside. The thermal processing services provider said that it had made “good progress” in 2021, with both revenues and profits growing throughout the year.

Luxury sports car maker Aston Martin Lagonda Global Holdings has also rallied. The company confirmed that Doug Lafferty will join the company as new CFO on May 1, replacing Kenneth Gregor.

On the other hand, mining giant Rio Tinto has tumbled after it proposed to buy the 49 percent of Canada’s Turquoise Hill it does not already own.

Dutch tech investor Prosus, which owns a stake in China’s Tencent, has also moved sharply lower as the relentless sell-off in Chinese technology stocks continued in Hong Kong on regulatory concerns.

U.S. Economic Reports

No major U.S. economic data is scheduled to be released today.

Stocks In Focus

Shares of Occidental Petroleum (OXY) and Chevron (CVX) are seeing pre-market weakness after Morgan Stanley downgraded its rating on both energy companies to Equal-Weight from Overweight.

Beef and poultry producer Tyson Foods (TSN) may also move to the downside after BMO Capital Markets downgraded its rating on the company’s stock to Market Perform from Outperform.

On the other hand, shares of Lockheed Martin (LMT) are likely to see initial strength after a report from Reuters said Germany has decided to purchase 35 F-35 fighter jets from the defense contractor.