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 extend the lackluster performance seen over the two previous sessions.

The Thanksgiving Day holiday on Thursday may lead to relatively light trading activity throughout the week, as the markets are also set for a shortened session on Friday.

Traders may also be reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve’s latest monetary policy meeting on Tuesday.

The minutes may shed additional light on the outlook for interest rates, with the Fed widely expected to leave rates unchanged at upcoming meetings.

Reports on durable goods orders, existing home sales and weekly jobless claims may also attract attention in the coming days.

Following the lackluster performance seen during Thursday’s session, stocks continued to experience choppy trading on Friday. The major averages spent the day bouncing back and forth across the unchanged line before closing slightly higher.

The S&P 500 edged up 5.78 points or 0.1 percent to 4,514.02, the Nasdaq inched up 11.81 points or 0.1 percent to 14,125.48 and the Dow crept up 1.81 points or less than a tenth of a percent to 34,947.28.

Despite the lackluster performance, the tech-heavy Nasdaq reached its best closing level in well over three months and the S&P 500 reached its best closing level in well over two months.

Reflecting strong gains earlier in the week, the Nasdaq surged by 2.4 percent for the week, while the S&P 500 and the Dow jumped by 2.2 percent and 1.9 percent, respectively.

The continued choppy trading on Wall Street came as traders seemed to be taking a moment to assess the recent strength in the markets.

Optimism about the outlook for interest rates has contributed to the recent advance, as the latest data has shown signs of easing inflation.

The data has reinforced investors’ expectations that the Federal Reserve will refrain from raising interest rates over the next several months before cutting rates in mid-2024.

The Fed’s next monetary policy meeting is scheduled for December 12-13, with CME Group’s FedWatch Tool currently indicating a 100.0 percent chance the central bank will leave rates unchanged.

However, some economists have suggested Fed officials will maintain a somewhat hawkish tone to avoid the appearance of declaring victory over inflation too soon.

In U.S. economic news, the Commerce Department released a report showing an unexpected increase in new residential construction in the month of October.

The report said housing starts jumped by 1.9 percent to an annual rate of 1.372 million in October after surging by 3.1 percent to a downwardly revised rate of 1.346 million in September.

Economists had expected housing starts to dip to a rate of 1.350 million from the 1.358 million originally reported for the previous month.

The Commerce Department said building permits also shot up by 1.1 percent to an annual rate of 1.487 million in October after plunging by 4.5 percent to a revised rate of 1.471 million in September.

Building permits, an indicator of future housing demand, were expected to decrease to a rate of 1.450 million from the 1.475 million originally reported for the previous month.

While most of the major sectors showed only modest moves on the day, energy stocks saw significant strength amid a rebound by the price of crude oil.

With crude for December delivery spiking $2.99 to $75.89 a barrel, the NYSE Arca Oil Index surged by 2.3 percent and the Philadelphia Oil Service Index jumped by 2.2 percent.

Airline stocks also turned in a strong performance, driving the NYSE Arca Airline Index up by 2.2 percent to its best closing level in well over a month.

Networking and financial stocks also moved notably higher, while some weakness was visible among software and gold stocks.

Commodity, Currency Markets

Crude oil futures are jumping $1.52 to $77.41 a barrel after surging $2.99 to $75.89 a barrel last Friday. Meanwhile, after slipping $2.60 to $1,984.70 an ounce in the previous session, gold futures are falling $10.70 to $1,974 an ounce.

On the currency front, the U.S. dollar is trading at 148.45 yen versus the 149.63 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0926 compared to last Friday’s $1.0915.

Asia

Asian stocks rose on Monday amid bets that global central banks will start cutting interest rates next year to support an uneven economic recovery.

The upside, however, remained capped ahead of key quarterly earnings from NVIDIA Corp. and the release of the Federal Reserve’s minutes from its November meeting this week.

The dollar held below over two-month lows and gold was unchanged, while oil extended Friday’s rally on expectations of production cuts by Saudi Arabia and Russia in the coming days.

China’s Shanghai Composite Index rose 0.5 percent to 3,068.32 after the country’s central bank kept its loan prime rate near record lows, as widely expected, and added liquidity into markets via reverse repos.

Property stocks rebounded after China’s central bank and financial regulators pledged on Friday to ensure financing support for the beleaguered real estate sector.

Hong Kong’s Hang Seng Index jumped 1.9 percent to 17,778.07 after two days of steep losses.

Japanese shares reversed course to end lower, dragged down by automakers and chip-related stocks.

The Nikkei 225 Index briefly hit a 33-year high before ending down 0.6 percent at 33,388.03 due to profit taking after recent strong gains.

The broader Topix Index settled 0.8 percent lower at 2,372.60. Honda Motor and Toyota both fell around 4 percent amid the yen’s gains against the dollar.

Semiconductor test equipment supplier Advantest dropped 1.6 percent and Tokyo Electron declined 0.9 percent.

Panasonic Holdings jumped 5 percent to extend Friday’s rally after announcing a sale of a stake in its automotive systems business.

Casualty insurer Tokio Marine Holdings surged 5.6 percent on share buyback news.

Seoul stocks advanced, with the Kospi finishing 0.9 percent higher at 2,491.20. SK Hynix, which supplies memory chips, gained 1.2 percent.

Australian markets ended slightly higher as investors awaited the release of minutes of the Reserve Bank of Australia’s November meeting on Tuesday for clues on the central bank’s policy stance.

The benchmark S&P ASX 200 Index edged up 0.1 percent to 7,058.40, led by banks and energy stocks. The broader All Ordinaries Index closed 0.1 percent higher at 7,268.70.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index closed up 0.3 percent at 11,207.46.

Europe

European stocks are mostly lower in lackluster trading on Monday after last week’s sharp rally on expectations that falling inflation across industrialized countries will prompt global central banks to start cutting interest rates next year..

Minutes from the Federal Reserve’s last meeting earlier this month are due to be released Tuesday and could shed further light on the central bank’s considerations.

Meanwhile, German producer prices declined for the fourth straight month in October due to a decrease in energy prices, Destatis reported earlier today.

Producer prices dropped 11.0 percent from a year ago in October, in line with expectations. The annual decline in September was 14.7 percent, which was the biggest drop since records began in 1949.

While the French CAC 40 Index is up by 0.2 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both down by 0.3 percent.

Swiss private lender Julius Baer has shown a substantial move to the downside after lowering profit expectations.

Ashtead Group has also plummeted after the British equipment rental firm warned that annual profits will fall short of forecasts.

Catering group Compass Group has also moved sharply lower after annual profit missed expectations.

German agrichemical company Bayer AG has also slumped after stopping the main study of its top experimental medicine and losing a key U.S. trial against its weed killer Roundup.

Meanwhile, Halma has jumped after the safety, health and environmental-technology company bought the TeDan group of companies for an initial $89.1 million on a cash-free, debt free basis.

U.S. Economic Reports

The Conference Board is scheduled to release its report on leading economic indicators in the month of October at 10 am ET. The leading economic index is expected to decrease by 0.6 percent in October after falling by 0.7 percent in September.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $16 billion worth of twenty-year bonds.

Stocks In Focus

Shares of Iovance Biotherapeutics (IOVA) are moving sharply higher in pre-market trading after Goldman Sachs initiated coverage of the biopharmaceutical company’s stock with a Buy rating.

Aerospace giant Boeing (BA) may also move to the upside after Deutsche Bank upgraded its rating on the company’s stock to Buy from Hold.

On the other hand, shares of Chegg (CHGG) may come under pressure after Morgan Stanley downgraded its rating on the education technology company’s stock to Underweight from Equal Weight.