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 last Friday.

After moving sharply higher for two straight days, stocks showed a lack of direction over the course of the trading session on Friday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session narrowly mixed. While the Nasdaq edged down 4.55 points or less than a tenth of a percent to 15,047.70, the Dow crept up 33.18 points or 0.1 percent to 34,798.00 and the S&P 500 ticked up 6.50 points or 0.2 percent to 4,455.48.

For the week, the Dow and the S&P 500 rose by 0.6 percent and 0.5 percent, respectively, while the Nasdaq inched up by less than a tenth of a percent.

The lackluster performance on Wall Street came amid some uncertainty about the outlook for the markets following recent volatility.

Stocks moved sharply higher during trading on Wednesday and Thursday, but the advance came on the heels of a sell-off on Monday.

The Dow has climbed well off the three-month closing low set on Tuesday but remains sharply lower for the month of September.

Traders also expressed uncertainty about the situation with China Evergrande, as the indebted property company has not provided clarification about a key interest payment.

In U.S. economic news, a report released by the Commerce Department showed an unexpected increase in U.S. new home sales in the month of August.

The Commerce Department said new home sales jumped by 1.5 percent to an annual rate of 740,000 in August after spiking by 6.4 percent to an upwardly revised rate of 729,000 in July.

The continued advance surprised economists, who had expected new home sales to slump by 1.1 percent to a rate of 700,000 from the 708,000 originally reported for the previous month.

With the unexpected increase, new home sales continued to recover after tumbling to their lowest level in over a year in June.

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

Airline stocks extended a recent rally, however, with the NYSE Arca Airline Index climbing by 1.5 percent to its best closing level in well over two months.

On the other hand, biotechnology stocks showed a notable move to the downside on the day, dragging the NYSE Arca Biotechnology Index down by 1.3 percent.

Commodity, Currency Markets

Crude oil futures are jumping $1.53 to $75.51 barrel after climbing $0.68 to $73.98 a barrel last Friday. Meanwhile, after inching up $1.90 to $1,751.70 an ounce in the previous session, gold futures are edging up $0.70 to $1,752.40 an ounce.

On the currency front, the U.S. dollar is trading at 110.84 yen versus the 110.73 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1708 compared to last Friday’s $1.1720.

Asia

Asian stocks ended Monday’s session on a mixed note as investors weighed the implications of surging energy prices and risks from the Chinese financial system.

China’s Shanghai Composite index fell 30.24 points, or 0.84 percent, to 3,582.83 as virus and Evergrande worries weighed. A ban on crypto trading also dented sentiment.

Materials stocks led declines on worries that power curbs are hurting manufacturing.
Hong Kong’s Hang Seng index ended little changed at 24,208.78 ahead of official and private gauges of Chinese manufacturing due out Thursday, expected to add to evidence of sputtering growth.

Japanese markets gave up early gains to end marginally lower as investors awaited a vote on Wednesday that will decide who will be country’s next prime minister after incumbent Yoshihide Suga.

Shippers fell sharply while shares of airlines and railway operators surged on hopes that they would benefit from an economic reopening as the COVID-19 infection situation improves.

Australian markets advanced, with miners and energy stocks climbing as crude oil and iron ore prices surged. Sentiment was also lifted following the easing of coronavirus-related restrictions in most regional areas.

The benchmark S&P/ASX 200 rose 41.60 points, or 0.57 percent, to 7,384.20 while the broader All Ordinaries index ended up 41.40 points, or 0.54 percent, at 7,690.70.

Rio Tinto, Fortescue Metals Group and Mineral Resources climbed 1-3 percent. Woodside Petroleum surged 3.2 percent, while Oil Search and Santos both rallied around 2 percent.

Banks also ended broadly higher, with Commonwealth Bank of Australia climbing as much as 2.8 percent. Qantas Airways gained 2.8 percent, Flight Centre jumped 7.5 percent and Webjet added 5.2 percent as investors looked ahead to the reopening of the states.

Seoul stocks edged higher as foreign investors extended their buying streak for an eighth straight session. The benchmark Kospi inched up 8.40 points, or 0.27 percent, to close at 3,133.64.

Shinwon, , an apparel maker with a presence in the Kaesong industrial zone in North Korea, surged 16.2 percent as hopes for inter-Korean cooperation rose over the weekend.

Europe

European stocks were moving higher on Monday as it looked unlikely a leftist coalition would take power.

Olaf Scholz of the center-left Social Democrats defeated Chancellor Angela Merkel’s conservatives in an extremely tight election, setting in motion what could be months of complex coalition talks to decide who will lead Europe’s biggest economy.

The left wing Die Linke party fell below the 5 percent threshold needed to enter parliament.

The pan European Stoxx 600 edged up 0.4 percent to 464.91 after declining 0.9 percent on Friday.

The German DAX rallied 0.9 percent, France’s CAC 40 index gained 0.7 percent and the U.K.’s FTSE 100 was up 0.3 percent.

Spain’s Cellnex Telecom tumbled 3.8 percent after Citigroup downgraded its rating on the stock to “sell”, citing valuation concerns.

Sartorius AG rose over 1 percent. The German laboratory and pharmaceutical equipment provider announced its plan to expand its presence in Michigan by opening a new 130,000-square-foot state-of-the art plant in Ann Arbor in late 2023.

TotalEnergies, BP Plc and Royal Dutch Shell all rose over 3 percent as Brent futures headed for $80 per barrel on supply concerns and amid optimism over rising demand.

IWG shares jumped nearly 7 percent after reports that the office rental firm is considering splitting into several different companies.

Petrofac soared 22 percent. The oilfield services company said it reached a plea agreement with the U.K. Serious Fraud Office in relation to its investigation into the company’s failure to prevent bribery.

Rolls Royce Holdings climbed 7.1 percent after the aerospace company was selected to provide the powerplant for the B-52 Stratofortress under the Commercial Engine Replacement Program.

Biocorp shares climbed 4.5 percent in Paris. The medical devices company announced an agreement with Danish pharmaceutical company Novo Nordisk A/S (NVO) for the development and distribution of a Mallya smart add-on device for the Novo Nordisk FlexTouch pen used by people with diabetes.

Germany’s BASF advanced 1.8 percent after it signed a Memorandum of Understanding with Sanyo Chemical for the joint development and access to technologies to create advanced polyurethane dispersions.

Zooplus gained more than 4 percent after Swedish private equity firm EQT AB made an offer to buy the online pet supplies’ retailer for about 3.36 billion euros ($3.94 billion).

U.S. Economic Reports

New orders for U.S. manufactured durable goods increased by much more than expected in the month of August, according to a report released the Commerce Department on Monday.

The report said durable goods orders jumped by 1.8 percent in August after rising by a revised 0.5 percent in July.

Economists had expected durable goods orders to increase by 0.6 percent compared to the 0.1 percent dip that had been reported for the previous month.

Excluding a spike in orders for transportation equipment, durable goods orders edged up by 0.2 percent in August after climbing by 0.8 percent in July.

At 9 am ET, New York Federal Reserve President John Williams is scheduled to speak via Webinar at a New York Fed Web Series on Culture: Culture Diagnosis and Behavior ChangeLearnings from the Field.

The Treasury Department is due to announce the results of this month’s auction of $60 billion worth of two-year notes at 11:30 am ET.

At 12 pm ET, New York Fed President Williams is scheduled due to speak via Webinar to the Economic Club of New York.

The Treasury Department is due to announce the results of this month’s auction of $61 billion worth of five-year notes at 1 pm ET.