Futures Pointing To Modestly Lower Open On Wall Street

The major U.S. index futures are currently pointing to a modestly lower open on Monday, with stocks likely to move to the downside after ending last Friday’s holiday-shortened session narrowly mixed.

Traders may look to cash in on recent strength in the markets, which has seen the major averages move higher for four straight weeks amid optimism about the outlook for interest rates.

Any selling pressure is likely to be relatively subdued, however, as traders may be reluctant to make significant moves ahead of the release of some key economic data in the coming days.

The Commerce Department’s report on personal income and spending may be in the spotlight, as it includes readings on inflation said to be preferred by the Federal Reserve.

Economists currently expect the report to show the annual rate of consumer price growth slowed to 3.1 percent in October from 3.4 percent in September. Core price growth is expected to slow to 3.5 percent from 3.7 percent.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, may also attract attention along with remarks by Fed Chair Jerome Powell.

Traders will be looking for additional clues about the outlook for interest rates, with optimism the Fed is done raising rates contributing to the recent strength on Wall Street.

Stocks turned in a lackluster performance throughout the trading session on Friday, as many traders continued to enjoy the Thanksgiving Day holiday. Despite the choppy trading, the Dow and the S&P 500 ended the day at their best closing levels in well over three months.

The major averages finished the session narrowly mixed. While the Nasdaq edged down 15.00 points or 0.1 percent to 14,250.85, the S&P 500 crept up 2.72 points or 0.1 percent to 4,559.34 and the Dow rose 117.12 points or 0.3 percent to 35,390.15.

For the holiday-interrupted week, the Dow jumped by 1.3 percent, while the S&P 500 advanced by 1.0 percent and the Nasdaq climbed by 0.9 percent.

The choppy trading on Wall Street comes as many traders remained away from their desks following Thursday’s holiday, with the markets closing three hours earlier than usual.

A lack of major U.S. economic data also kept some traders on the sidelines ahead of next week’s reports on personal income and spending, new home sales, consumer confidence, manufacturing activity and more.

Most of the major sectors finished the day showing only modest moves, contributing to the lackluster close by the broader markets.

Airline stocks showed a significant move to the upside, however, with the NYSE Arca Airline Index climbing by 1.3 percent.

Notable strength was also visible among tobacco stocks, as reflected by the 1.2 percent gain posted by the NYSE Arca Tobacco Index.

Pharmaceutical and networking stocks also saw some strength on the day, while computer hardware stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are slipping $0.34 to $75.20 a barrel after tumbling $1.56 to $75.54 a barrel last Friday. Meanwhile, after rising $10.20 to $2,003 an ounce in the previous session, gold futures are climbing $12.30 to $2,105.30 an ounce.

On the currency front, the U.S. dollar is trading at 148.71 yen versus the 149.44 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0949 compared to last Friday’s $1.0939.

Asia

Asian stocks ended mostly lower on Monday ahead of a busy week of economic releases and speeches from several Federal Reserve officials, including Fed Chair Jerome Powell.

Investors looked ahead to the release of U.S., European and Chinese PMIs, eurozone inflation data and U.S. personal consumption numbers this week for additional clues on the growth and interest rate outlook.

Gold rose against a weakening dollar, while oil prices dipped ahead of the delayed OPEC+ meeting on Thursday.

China’s Shanghai Composite Index dropped 0.3 percent to 3,031.70 after data showed slowing industrial profit growth in October, stoking concerns about the country’s economic recovery from the pandemic. Hong Kong’s Hang Seng Index slipped 0.2 percent to 17,525.06.

Japanese shares fell as the yen strengthened against all its Group-of-10 peers ahead of key U.S. inflation data due this week. The Nikkei 225 Index shed 0.5 percent to close at 33,443.67, while the broader Topix Index settled 0.4 percent lower at 2,381.76.

Mitsubishi Heavy Industries slumped 5 percent to pace the declines, while technology investor SoftBank Group fell 1.7 percent.

Taisho Pharmaceutical soared 18 percent as it announced a management buyout at 8,620 yen per share that would take the company private.

Seoul stocks ended on a flat note, with the Kospi finishing a choppy session marginally lower at 2,495.66 ahead of the Bank of Korea’s interest rate decision due on Thursday.

Australian markets fell notably, dragged down by miners. The benchmark S&P/ASX 200 Index fell 0.8 percent to 6,987.60 ahead of inflation and retail sales data due later in the week and the Reserve Bank of Australia’s rate decision next week. The broader All Ordinaries Index ended 0.7 percent lower at 7,192.80.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index dropped 0.5 percent to 11,155.79, snapping a three-day winning streak ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision on Wednesday.

Europe

European stocks are subdued on Monday as investors await key economic data from the U.S., Europe and China this week for directional cues.

Growth worries returned to the fore after data showed profits at China’s industrial companies rose at a much slower pace in October than the prior month.

While the French CAC 40 Index is just below the unchanged line, the German DAX Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.

Julius Baer has shown a notable move to the downside on reports the Swiss wealth manager would review its private debt business.

BP Plc and Shell have also slid in London as Bent prices fell toward $80 a barrel following reports of disputes among OPEC+ members on their production quotas next year.

Insurer Aviva is marginally lower after it agreed to buy Optiom from Novacap and other minority shareholders for around £100 million.

On the other hand, Rightmove has moved sharply higher after the property portal raised part of its revenue guidance for 2023.

Veolia Environnement SA, a water, waste, and energy management solutions provider, has also risen in Paris after it agreed to sell its unit SADE-CGTH to NGE, an independent public works group, for 260 million euros.

Valneva has also jumped. The drug maker said the European Medicines Agency has accepted its application for chikungunya vaccine candidate VLA1553.

Likewise, Sanofi has moved higher after announcing positive results of Dupixent (dupilumab) Phase 3 trial in chronic obstructive pulmonary disease or COPD.

GSK has edged up slightly after announcing positive headline results from phase III trial evaluating its elantamab mafodotin asset.

U.S. Economic Reports

The Commerce Department is due to release its report on new home sales in the month of October at 10 am ET. New home sales are expected to decrease to an annual rate or 725,000 in October after surging to a rate of 759,000 in September.

At 11:30 am ET, the Treasury Department is scheduled to announce the results of this month’s auction of $54 billion worth of two-year notes.

The Treasury Department is also due to announce the results of this month’s auction of $55 billion worth of five-year notes at 1 pm ET.

Stocks In Focus

Shares of Foot Locker (FL) are seeing notable pre-market weakness after Citi downgraded its rating on the athletic apparel and footwear retailer’s stock to Sell from Neutral.

Cybersecurity company Okta (OKTA) may also move to the downside after Jefferies downgraded its rating on the company’s stock to Market Perform from Outperform.

Meanwhile, shares of Crown Castle (CCI) are moving sharply higher in pre-market trading after a report from the Wall Street Journal said Elliott Investment Management has amassed a more than $2 billion stake in the wireless tower operator and plans to push for changes at the company.

Israeli pharmaceutical company Teva Pharmaceutical (TEVA) may also see initial strength after UBS upgraded its rating on the company’s stock to Buy from Neutral.