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 mixed performance seen in the previous session.

A lack of major U.S. economic data is likely to keep traders on the sidelines ahead of the release of some key data in the coming days.

Reports on import and export prices, retail sales, industrial production and housing starts are likely to attract attention along with the minutes of the latest Federal Reserve meeting.

Following the release of producer price inflation data, the major U.S. stock indexes turned in a mixed performance during trading on Friday.

The tech-heavy Nasdaq slid 93.14 points or 0.6 percent to 13,644.85, ending the session at its lowest closing level in well over a month.

The S&P also edged down 4.78 points or 0.1 percent to a one-month closing low of 4,464.05, while the narrower Dow rose 105.25 points or 0.3 percent to 35,281.40.

The major averages also turned in a mixed performance for the week. While the Dow climbed by 0.6 percent, the S&P 500 dipped by 0.3 percent and the Nasdaq tumbled by 1.9 percent.

The mixed performance on Wall Street came following the release of a Labor Department report showing producer prices climbed by slightly more than expected in the month of July.

The Labor Department said its producer price index for final demand rose by 0.3 percent in July following a revised unchanged reading in June.

Economists had expected producer prices to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

The report also showed the annual rate of producer price growth reaccelerated to 0.8 percent in July after slowing to just 0.2 percent in June. The rate of growth was expected to accelerate to 0.7 percent.

While the bigger than increase by the headline index led to renewed interest rate concerns among some investors, FHN Financial Macro Strategist Will Compernolle noted the more-important index excluding food, energy, and trade services rose in line with estimates.

“The data show that the last two months of consumer goods price disinflation is on solid footing and that more should be on the way,” said Compernolle.

He added, “This is the area of disinflation the Fed and market participants have been expecting for a while, mostly stemming from supply chain normalization.”

A separate report released by the University of Michigan showed a slight pullback in consumer sentiment in the month of August.

The report said the consumer sentiment index edged down to 71.2 in August after spiking to 71.6 in July. Economists had expected the index to slip to 71.0.

Semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.3 percent to its lowest closing level in well over a month.

Considerable weakness was also visible among airline stocks, with the NYSE Arca Airline Index tumbling by 2.0 percent to a two-month closing low.

Computer hardware stocks also saw notable weakness, resulting in a 1.3 percent drop by the NYSE Arca Computer Hardware Index.

On the other hand, oil stocks moved higher amid a rebound by the price of crude oil, driving the NYSE Arca Oil Index up by 1.4 percent.

Gold stocks also turned in a strong performance despite a modest decrease by the price of the precious metal, with the NYSE Arca Gold Bugs Index climbing by 1.1 percent.

Commodity, Currency Markets

Crude oil futures are slumping $0.95 to $82.24 a barrel after rising $0.37 to $83.19 a barrel last Friday. Meanwhile, after edging down $2.30 to $1,946.60 an ounce in the previous session, gold futures are slipping $6.70 to $1,939.90 an ounce.

On the currency front, the U.S. dollar is trading at 145.36 yen versus the 144.96 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0916 compared to last Friday’s $1.0949.

Asia

Asian stocks fell sharply on Monday as concerns mounted around Country Garden, a major property developer in China which is now on the brink of default.

China’s new bank loans tumbled in July and other key credit gauges also weakened, deepening investor concerns about the health of the world’s second largest economy and sending the yuan to a six-week low.

A spike in the dollar index and bond yields also spurred risk aversion after Friday’s stronger-than-expected producer price data from the United States stoked concerns about the possibility of U.S. interest rates rising further.

Oil prices were down around 1 percent in Asian trade as China demand concerns overshadowed signs of escalating geopolitical tensions in the Black Sea.

Chinese shares edged lower as leading property developer Country Garden faced a potential bankruptcy that could shake the stuttering Chinese economy.

China’s benchmark Shanghai Composite index dropped 0.34 percent to 3,178.43 while Hong Kong’s Hang Seng index slumped 1.58 percent to 18,773.55 ahead of Chinese retail sales, industrial output and investment data due on Tuesday.

Country Garden Holdings shares plummeted 16.3 percent in Hong Kong after the company missed bond payments and warned of multibillion-dollar losses.

The company risks defaulting in September if it still cannot pay after a 30-day grace period.

Japanese shares tumbled as investors awaited direction from second quarter gross domestic product data due on Tuesday and inflation data on Friday.

The Nikkei average fell 1.27 percent to 32,059.91 and the broader Topix index settled 0.98 percent lower at 2,280.89, with chip, energy, airline and auto stocks pacing the declines.

Ship and machinery maker Mitsui E&S Co slumped 8.3 percent to lead losses while Nippon Sheet Glass soared 10.6 percent. Advantest lost 3.2 percent and Inpex Corp plunged 4.8 percent.

Seoul stocks fell for a third day running, with big-cap tech and battery companies leading losses on concerns about rising inflationary pressure in the United States. The Kospi average closed 0.79 percent lower at 2,570.87.

Australian shares hit a four-week low as miners tumbled on concerns over China’s property sector and heightened concerns about the country’s economic recovery.

The benchmark S&P/ASX 200 index fell 0.86 percent to 7,277 – marking its biggest drop since July 11. The broader All Ordinaries index closed 0.81 percent lower at 7,493.10. BHP, Rio Tinto and Fortescue Metals Group all ended down around 2 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 index finished marginally lower at 11,826.42 ahead of Reserve Bank’s rate decision due on Wednesday.

Europe

European stocks traded mixed on Monday, with mining and energy stocks declining after Country Garden Holdings, a major property developer in China, missed bond payments and warned of multibillion-dollar losses.

The company risks defaulting in September if it still cannot pay after a 30-day grace period.

The pan European STOXX 600 traded 0.2 percent higher at 460.20, tracking gains in U.S. stock futures.

The German DAX rose 0.6 percent after data showed Germany’s wholesale prices continued to decline in July.

Wholesale prices posted an annual decline of 2.8 percent in July but slightly slower than the 2.9 percent fall in June. This was the fourth consecutive decline in prices.

Month-on-month, wholesale prices dropped 0.2 percent, the same pace of decline as seen in June.

France’s CAC 40 was up 0.4 percent while the U.K.’s FTSE 100 was down 0.3 percent, dragged down by commodity stocks.

Miners Anglo American and Glencore both fell over 1 percent as the dollar firmed up on risk aversion amid concerns over China’s embattled property sector.

Weaker oil prices sent energy stocks lower, with BP Plc and Shell both falling around 1 percent.

Automakers traded mostly higher, with BMW up nearly 1 percent and Volkswagen adding half a percent after Tesla rolled out a new round of price cuts in China.

Adesso jumped 6 percent after reporting a surge in its first-half EBITDA profit and confirming FY23 outlook.

Banks were seeing broad-based gains, tracking gains in Eurozone government bond yields.

Germany’s 10-year government bond yield hovered near a one-month high as investors assessed upside risks to the inflation outlook.

Philips soared 5 percent after Dutch investment firm Exor took a 15 percent stake in the healthcare company.

U.S. Economic Reports

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