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 in the previous session.

Traders may be reluctant to make significant ahead of several key events this week, including the Federal Reserve’s monetary policy announcement on Wednesday.

While the Fed is widely expected to leave interest rates unchanged, traders will be looking for clues about the likelihood of rate cuts at upcoming meetings.

Recent economic data has led many economists to believe the Fed is unlikely to cut rates in March, as traders had previously hoped.

The Labor Department’s closely watched monthly jobs report is also due to be released later this week along with reports on initial jobless claims, labor productivity and costs and manufacturing activity.

Earnings news is also likely to remain in focus this week, with tech giants Microsoft (MSFT), Apple (AAPL), Meta (META) and Alphabet (GOOGL) among the companies due to report their quarterly results.

After trending higher over the past several sessions, stocks turned in a relatively lackluster performance during trading on Friday. The major averages bounced back and forth across the unchanged line before eventually closing narrowly mixed.

While the S&P 500 edged down 3.19 points or 0.1 percent to 4,890.97 and the Nasdaq fell 55.13 points or 0.4 percent to 15,455.36, the narrower Dow rose 60.30 points or 0.2 percent to a new record closing high of 38,109.43.

Despite the mixed performance on the day, the major averages all moved higher for the week. While the S&P 500 jumped by 1.1 percent, the Nasdaq advanced by 0.9 percent and the Dow climbed by 0.7 percent.

The choppy trading on Wall Street came as traders weighed disappointing earnings news from semiconductor giant Intel (INTC) against tamer than expected consumer price inflation data.

Shares of Intel plunged by 11.9 percent after the company reported better than expected fourth quarter results but provided disappointing first quarter guidance.

Meanwhile, the Commerce Department released a report before the start of trading showing a bigger than expected slowdown in the annual rate of core consumer price growth in the month of December.

The report said the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.9 percent in December from 3.2 percent in November. Economists had expected core price growth to decelerate to 3.0 percent.

The annual inflation reading, which is said to be preferred by the Federal Reserve, was included in the Commerce Department’s monthly report on personal income and spending.

“Today’s inflation report gives the Fed a path to cut interest rates,” said Larry Tentarelli, Chief Technical Strategist, Blue Chip Daily Trend Report. “Based on strong recent GDP data and jobs data, we expect the first rate cut to be in the May-June period.”

He added, “If jobs and or economic data softens a bit and inflation continues to drop quickly, that could increase the chances of a rate cut in March, but that is not our base case yet.”

Traders may also have been reluctant to make significant moves ahead of the Fed’s monetary policy announcement next week.

While the Fed is widely expected to leave interest rates unchanged, traders will be looking for clues about the timing of highly anticipated rate cuts.

The uptick by the Dow came as shares of American Express (AXP) surged by 7.1 percent after the financial services company reported fourth quarter results that missed estimates but forecast strong results in 2024.

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Semiconductor stocks moved sharply lower amid the steep drop by Intel, however, with the Philadelphia Semiconductor Index plunging by 2.9 percent.

Shares of KLA Corp. (KLAC) also slumped after the semiconductor equipment maker reported better than expected fiscal second quarter results but provided disappointing fiscal third quarter guidance.

Airline stocks also moved to the downside on the day, while some strength was visible among oil producer and steel stocks.

Commodity, Currency Markets

Crude oil futures are falling $0.39 to $77.62 a barrel after climbing $0.65 to $78.01 a barrel last Friday. Meanwhile, after edging down $0.50 to $2,017.30 an ounce in the previous session, gold futures are rising $11.50 to $2,208.80 an ounce.

On the currency front, the U.S. dollar is trading at 147.93 yen versus the 148.15 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0817 compared to last Friday’s $1.0853.

Asia

Asian stocks advanced on Monday after Chinese regulators announced new measures to bolster the country’s equity market and property sector.

China’s securities regulator announced over the weekend that it would halt the lending of certain shares for short selling beginning Monday.

In another development, the southern city of Guangzhou eased home-buying restrictions as part of measures to boost the property sector.

Regional gains, however, remain capped ahead of a busy week of earnings, economic data releases and central bank decisions.

The U.S. dollar held steady in Asian trading as focus shifted to Wednesday’s FOMC meeting as well as a slew of economic data due this week, including jobless claims data and the payroll report that will help gauge the strength of the labor market.

Oil prices climbed as tensions escalated in the Middle East. U.S. President Joe Biden vowed retaliation after missiles launched by Iran-backed militants killed U.S. troops in Jordan and struck a fuel tanker in the Red Sea.

China’s Shanghai Composite Index fluctuated before finishing 0.9 percent lower at 2,883.36 as a court ordered China Evergrande Group to undergo liquidation. Hong Kong’s Hang Seng Index climbed 0.8 percent to 16,077.24.

Japanese shares rose notably as a cheaper yen boosted exporters and energy shares were lifted by higher oil prices. The Nikkei 225 Index jumped 0.8 percent to 36,026.94, while the broader Topix Index settled 1.3 percent higher at 2,529.48.

Seoul stocks rallied, with the Kospi climbing 0.9 percent to 2,500.65 – gaining for a third consecutive session on institutional and foreign buying.

Samsung Biologics rallied 3.5 percent and SK Biopharmaceuticals surged 6.7 percent following recent legislative moves in the United States Congress to effectively ban Chinese genomics companies from doing business in the U.S.

Automakers Hyundai Motor and Kia soared 4.4 percent and 5.8 percent, respectively, while refiner SK Innovation added 3.9 percent.

Australian markets eked out modest gains as higher crude oil prices boosted energy stocks. Property stocks also rose, offsetting weakness in the mining and technology sectors.

The benchmark S&P ASX 200 Index rose 0.3 percent to 7,578.40, while the broader All Ordinaries Index settled 0.3 percent higher at 7,808.30.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index closed up 0.3 percent at 11,911.89.

Europe

European shares are mixed on Monday after setting two-year highs in the previous session, thanks to some upbeat quarterly earnings and signs of cooling inflation in the euro area.

The choppy trading comes ahead of a slew of economic data releases, mega tech earnings and key central bank decisions in the U.S. and U.K. due this week.

Readings on Chinese factory activity, U.S. monthly jobs and preliminary euro zone growth for the fourth quarter also remain on investors’ radar.

While the U.K.’s FTSE 100 Index is up by 0.1 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is down by 0.5 percent.

Iron ore pellet producer Ferrexpo has moved notably lower after Ukraine’s court of appeal confirmed a claim against it for around $125 million.

Budget airline Ryanair has also moved to the downside after trimming its annual profit forecast for the year to the end of March.

Philips shares have also slumped. The Dutch medical device maker said it would halt new sales of sleep machines in the U.S. after a series of recalls that continued to weigh on results.

Bayer has also tumbled. The German pharmaceutical giant was ordered by a U.S. court to pay $2.25 billion in damages to a former Roundup user.

Satellite company Eutelsat has also plummeted after cutting its annual revenue guidance.

Meanwhile, Swiss building materials firm Holcim has soared as it announced plans to spin off its North American operations in a flotation.

U.S. Economic Reports

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

Stocks In Focus

Shares of ZoomInfo Technologies (ZI) are moving sharply higher in pre-market trading after Bank of America upgraded its rating on the software company’s stock to Buy from Neutral.

Discount retailer Dollar Tree (DLTR) is also likely to see initial strength after JPMorgan upgraded its rating on the company’s stock to Overweight from Neutral.

On the other hand, shares of Bloom Energy (BE) are seeing significant pre-market weakness after Bank of America downgraded its rating on the green energy company’s stock to Underperform from Neutral.

Media and entertainment company Warner Bros. Discovery (WBD) may also move to the downside after Wells Fargo downgraded its rating on the company’s stock to Equal Weight from Overweight.