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 strong performance seen last week.

Traders may be reluctant to make significant moves as they digest last week’s gains, which lifted the Dow and S&P 500 to new record highs.

The tech-heavy Nasdaq has also reached its best levels in well over two years but has encountered some resistance around its November 2021 highs.

Traders may also stick to sidelines ahead of the release of some key economic data later this week, including a closely watched inflation reading.

The Commerce Department’s report on personal income and spending, which is scheduled to be released on Thursday, includes a reading on consumer price inflation said to be preferred by the Federal Reserve.

The inflation data could have a notable impact on the outlook for interest rates, as Fed officials have said they need greater confidence inflation is slowing before cutting rates.

Reports on durable goods orders, consumer confidence, weekly jobless claims and manufacturing activity are also likely to attract attention in the coming days.

Stocks extended Thursday’s substantial rally in early trading on Friday but turned in a relatively lackluster performance over the remainder of the trading session. Despite the choppy trading, the Dow and the S&P 500 reached new record closing highs.

The major averages bounced back and forth across the unchanged line before closing narrowly mixed. While the Nasdaq dipped 44.80 points or 0.3 percent to 15,996.82, the Dow rose 62.42 points or 0.2 percent to 39,131.53 and the S&P 500 inch up 1.77 points or less than a tenth of a percent to 5,088.80.

For the holiday-shortened week, the S&P 500 surged by 1.7 percent, while the Nasdaq and the Dow jumped by 1.4 percent and 1.3 percent, respectively.

The early upward move reflected an extension of the rally seen in during Thursday’s session, which came on the heels of upbeat earnings news from AI darling Nvidia (NVDA).

Buying interest waned shortly after the start of trading, however, as traders took a breather following Thursday’s surge.

Overall trading activity remained somewhat subdued as the day progressed, as a lack of major U.S. economic data kept some traders on the sidelines ahead of the release of several key reports next week.

The Commerce Department’s report on personal income and spending is likely to be in focus next week, as it includes readings on inflation said to be preferred by the Federal Reserve.

Traders are also likely to keep an eye on reports on durable goods orders, new home sales, consumer confidence and manufacturing activity.

Reflecting the lackluster performance by the broader markets, most of the major sectors showed only modest moves on the day.

Gold stocks showed a strong move to the upside, however, resulting in a 1.8 percent jump by the NYSE Arca Gold Bugs Index. The strength among gold stocks came amid a notable increase by the price of the precious metal.

On the other hand, semiconductor stocks gave back ground after helping lead Thursday’s rally, dragging the Philadelphia Semiconductor Index down by 1.1 percent.

Airline stocks also saw considerable weakness on the day, moving lower along with oil service and computer hardware stocks.

Commodity, Currency Markets

Crude oil futures are slipping $0.13 to $76.36 a barrel after plunging $2.12 to $76.49 a barrel last Friday. Meanwhile, after jumping $18.70 to $2,049.40 an ounce in the previous session, gold futures are falling $7.50 to $2,041.90 an ounce.

On the currency front, the U.S. dollar is trading at 150.61 yen versus the 150.51 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0850 compared to last Friday’s $1.0821.

Asia

Asian stocks ended mostly lower on Monday, with China recovery concerns and uncertainty over the timing of interest rate cuts in the U.S. keeping underlying sentiment cautious.

Gold prices were off two-week highs as the dollar ticked higher ahead of a slew of U.S. economic data due this week, including the Federal Reserve’s preferred inflation measure.

Federal Reserve Bank of New York President John Williams said in an interview published Friday that the economy is headed in the right direction and interest rate cuts would likely happen “later this year.”

Crude prices extended losses from the previous session on worries about global demand.

Chinese markets fell sharply after having risen for nine straight sessions in the wake of targeted measures to support sagging markets.

The benchmark Shanghai Composite Index dropped 0.9 percent to 2,977.02 after eleven Chinese companies lost their credit ratings Friday at Moody’s Investors Service.

Hong Kong’s Hang Seng Index ended 0.5 percent lower at 16,634.74 ahead of Chinese manufacturing data due this week.

Japanese markets hit a new high after two of Wall Street’s three major indices edged up to new record closing highs on Friday.

The Nikkei 225 Index rose 0.4 percent to 39,233.71, while the broader Topix Index settled 0.5 percent higher at 2,673.62.

Mitsubishi Corp. and Mitsui & Co. both rose about 1.5 percent after Warren Buffett endorsed Japanese trading firms in his annual shareholder letter.

Seoul stocks fell notably after authorities announced a reform plan for listed companies to improve management and corporate governance.

The Kospi slid 0.8 percent to 2,647.08 as the program aimed at boosting undervalued stocks fell short of market expectations. Hyundai Motor, Kia Corp. and KB Financial Group lost 2-5 percent.

Australian markets rose slightly as earnings proved to be a mixed bag. Energy firm Santos fell 5.3 percent on going ex-dividend.

The benchmark S&P/ASX 200 edged up 0.1 percent to 7,652.80, while the broader All Ordinaries Index closed 0.1 percent higher at 7,908.10.

New Zealand’s benchmark S&P/NZX-50 Index finished marginally lower at 11,709.89 ahead of the RBNZ meeting on Wednesday.

Europe

European stocks are subdued on Monday ahead of key eurozone inflation data due this week that could offer important clues on the timing of interest rate cuts.

ECB President Lagarde’s speech and U.S. economic data, including housing sector indicators, may influence trading sentiment later in the day.

The euro rose against its major rivals after ECB’s Yannis Stournaras ruled out the possibility of rate cuts in March.

Inflation reports from Germany, France and Spain along with the U.S. Federal Reserve’s favored core measure of personal consumption expenditure prices are due on Thursday.

While the German DAX Index is up by 0.1 percent, the U.K.’s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.3 percent.

Sweden’s Pagero Group AB has fallen after content and technology company Thomson Reuters Corp. announced the acquisition of the company in a recommended public offer for around $800 million or 8.1 billion Swedish Kronor.

Automaker Stellantis N.V. has also declined after announcing a deal with leasing and fleet management company Ayvens for 500,000 vehicles across Europe by 2026.

Bunzl has also slumped. The distribution and outsourcing company said it had signed an agreement to acquire Nisbets in the U.K. and Pamark in Finland.

Meanwhile, biopharma giant AstraZeneca has risen after receiving approval from European regulators for its blood-disorder drug Voydeya.

Ryanair has also moved to the upside after reports the Irish budget airline may raise peak summer air fares in Europe by up to 10 percent.

U.S. Economic Reports

The Commerce Department is scheduled to release its report on new home sales in the month of January at 10 am ET. New home sales are expected to jump to an annual rate of 680,000 in January after surging to a rate of 664,000 in December.

At 11:30 am ET, the Treasury Department is due to announce the results of this month’s auction of $63 billion worth of two-year notes, while at 1 pm ET, the Treasury is due to announce the results of this month’s auction of $64 billion worth of five-year notes

Kansas City Federal Reserve President Jeffrey Schmid is scheduled to speak on the economic and monetary policy outlook before the Economic Club of Oklahoma City at 7:40 pm ET.

Stocks In Focus

Shares of Domino’s Pizza (DPZ) are moving sharply higher in pre-market trading after the restaurant chain reported better than expected fourth quarter results, increased its quarterly dividend and announced a stock buyback.

Apparel retailer Gap (GPS) may also move to the upside after JPMorgan upgraded its rating on the company’s stock to Neutral from Underweight.

On the other hand, shares of Moderna (MRNA) may come under pressure after HSBC downgraded its rating on the biotechnology company’s stock to Reduce from Hold.