The major U.S. index futures are currently pointing to a modestly higher open on Monday, with stocks likely to move to the upside after ending last Friday’s trading mixed.
After moving sharply higher over the course of the previous session, stocks turned in a relatively lackluster performance during trading on Friday. The major averages fluctuated as the day progressed before ending the session mixed.
The Dow rose 153.30 points or 0.4 percent to 34,861.24 and the S&P 500 climbed 22.90 points or 0.5 percent to 4,543.06. Meanwhile, the Nasdaq recovered from its worst levels of the day but still closed down 22.54 points or 0.2 percent at 14,169.30.
For the week, the Dow edged up by 0.3 percent, while the S&P 500 jumped by 1.8 percent and the Nasdaq surged by 2.0 percent.
The lackluster performance on Wall Street came after the U.S. and the European Union signed an agreement for the supply of liquefied natural gas to reduce reliance on Russian supply.
On the U.S. economic front, the National Association of Realtors released a report showing pending home sales unexpectedly saw further downside in the month of February.
NAR said its pending home sales index tumbled by 4.1 percent to 104.9 in February after plunging by 5.8 percent to a revised 109.4 in January. The continued decrease came as a surprise to economists, who had expected the index to rebound by 1.0 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Meanwhile, revised data released by the University of Michigan showed consumer sentiment in the U.S. fell by more than initially estimated in the month of March.
The report showed the consumer sentiment index for March was downwardly revised to 59.4 from the preliminary reading of 59.7. Economists had expected the index to be unrevised.
With the unexpected downward revision, the consumer sentiment was at its lowest level since hitting 55.8 in August of 2011.
Despite the lackluster performance by the broader markets, oil service stocks moved sharply higher on the day, driving the Philadelphia Oil Service Index up by 4.7 percent.
The rally by oil service stocks came as the price of crude oil for May delivery jumped $1.56 to $113.90 a barrel on news of a missile strike at an oil storage depot in Saudi Arabian city Jeddah.
Substantial strength was also visible among natural gas stocks, as reflected by the 4.8 percent spike by the NYSE Arca Natural Gas Index. The index reached its best closing level in almost five years amid a sharp increase by the price of natural gas.
Airline stocks also turned in a strong performance on the day, resulting in a 1.8 percent jump by the NYSE Arca Airline Index.
Oil producer, tobacco and utilities stocks also saw considerable strength, while biotechnology stocks showed a notable move to the downside.
Commodity, Currency Markets
Crude oil futures are plunging $6.28 to $107.62 a barrel after jumping $1.56 to $113.90 a barrel last Friday. Meanwhile, after falling $8 to $1,954.20 an ounce in the previous session, gold futures are tumbling $22 to $1,932.20 an ounce.
On the currency front, the U.S. dollar is trading at 124.04 yen versus the 122.05 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0967 compared to last Friday’s $1.0983.
Asia
Asian shares were mixed on Monday amid lingering worries surrounding the Covid-19 pandemic, inflation and the Russian invasion of Ukraine.
Amid increased concerns about high commodity prices and inflation growth, investors awaited speeches by several key Fed officials this week for clues on the pace of tightening.
Chinese shares finished marginally higher despite a lockdown in Shanghai to curb Covid-19 outbreak. Hong Kong’s Hang Seng index jumped 1.31 percent to 21,684.97 amid a rally in tech shares.
Japanese stocks fell notably as investors locked in profits ahead of the fiscal year-end. The Nikkei average ended 0.73 percent lower at 27,943.89, snapping a nine-day winning streak.
The index finished off its day’s lows after the Bank of Japan offered to buy unlimited amounts of 10-year Japanese government bonds at 0.25 percent, displaying its commitment to its uber-dovish yield curve control policy.
Automakers Honda Motor and Nissan gained 1-2 percent after the yen weakened past 123 per dollar following the BOJ’s action.
Tech stocks underperformed, with Advantest and Tokyo Electron both falling over 1 percent. Uniqlo store operator Fast Retailing gave up 1.8 percent.
Australian markets finished marginally higher to extend gains for a fifth straight session, led by banks and miners.
Lender Westpac climbed 1.2 percent to hit its highest in about five months, while mining heavyweight BHP surged 2.3 percent, tracking higher iron ore prices following China’s move to boost its short-term fund injection to counter any tightness in market liquidity. Tech stocks declined, with Block Inc and Xero plunging 4-5 percent.
Seoul stocks ended flat with a negative bias as investors fretted about the economic consequences of rising commodity prices due to heightened geopolitical uncertainty.
New Zealand shares fell sharply, with the benchmark NZX-50 index ending 1.21 percent lower at 11,909.72. Heavyweights Fisher & Paykel Healthcare and Ryman Healthcare tumbled 3.8 percent and 2.9 percent, respectively.
Europe
European stocks advanced on Monday, with a sharp pullback in crude prices and hopes of a peace deal in the Ukraine crisis offering some support.
Oil prices fell around 4 percent as a coronavirus lockdown in Shanghai fueled worries about weak demand.
Russia and Ukraine will restart face-to-face peace negotiations today after the former signaled that it may scale down its war and aims to concentrate on eastern Ukraine.
Ukraine President Zelenskyy also said he wants to make a deal with Moscow over Donbas and he is willing to discuss adopting a neutral status too.
The Donbas region has been partly controlled by Russian-backed separatists since 2014.
The pan European Stoxx 600 rose 0.6 percent to 456.45 after closing 0.1 percent higher on Friday.
The German DAX rallied 1.5 percent, France’s CAC 40 index climbed 1.3 percent and the U.K.’s FTSE 100 was up half a percent.
Dutch brewing giant Heineken N.V. rose over 1 percent after saying it is pulling out of Russia.
Travel and leisure stocks were in demand, with Air France KLM, Lufthansa, IAG, TUI and EasyJet climbing 2-4 percent.
Apple supplier STMicroelectronics dropped 1 percent after the Nikkei reported Apple Inc is planning to cut the output of its iPhone and AirPods devices.
Energy stocks such as BP Plc and Royal Dutch Shell were moving lower in London as crude prices slumped on news of fresh Covid-19 lockdowns in China.
Barclays tumbled 3.6 percent after the lender disclosed around a 450 million pound ($591.80 million) loss on mishandled bond trades and delayed its £1bn share buyback program.
Ted Baker lost 2.7 percent after the fashion chain Ted Baker rejected a £250m takeover bid from New York based private equity firm Sycamore.
Aerospace firm Rolls-Royce plunged 11 percent after rallying nearly 20 percent on Friday following rumors of bid interest and an engine order.
Sanofi gained about 1.7 percent in Paris. The drug maker announced that the Japanese Ministry of Health, Labor, and Welfare has granted marketing authorization for Xenpozyme (olipudase alfa) to treat acid sphingomyelinase deficiency.
Daimler Truck rose about 1 percent. CEO Martin Daum has said in an interview with Financial Times that the electric truck costs would be higher forever than the internal combustion engine-powered ones.
U.S. Economic Reports
The Treasury Department is due to announce the results of this month’s auction of $50 billion worth of two-year notes at 11:30 am ET.
At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $51 billion worth of five-year notes.
Futures Pointing To Modestly Higher Open On Wall Street
2022-03-28 12:18:47
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