Futures Pointing To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to add to the gains posted last week.

Following the substantial downturn seen over the course of Thursday’s session, stocks moved back to the upside during trading on Friday. With the upward move on the day, the Dow and the S&P 500 reached new record intraday highs.

The major averages gave back ground going into the close but remained firmly positive. The Dow advanced 247.15 points or 0.6 percent to 40,000.90, the Nasdaq climbed 115.04 points or 0.6 percent to 18,398.45 and the S&P 500 rose 30.81 points or 0.6 percent to 5,615.35.

For the week, the Dow shot up by 1.6 percent, the S&P 500 jumped by 0.9 percent and the Nasdaq increased by 0.3 percent.

The rebound on Wall Street came as traders looked to pick up stocks at somewhat reduced levels following the steep drop seen on Thursday, which partly reflected a rotation out of leading tech stocks like Nvidia (NVDA).

Shares of Nvidia jumped by 1.5 percent on the day after the AI darling plunged by 5.6 percent in the previous session.

Traders also remained optimistic about the outlook for interest rates even though the Labor Department released a report showing producer prices in the U.S. increased by slightly more than expected in the month of June.

The Labor Department said its producer price index for final demand rose by 0.2 percent in June following a revised unchanged reading in May.

Economists had expected producer prices to inch up by 0.1 percent compared to the 0.2 percent dip originally reported for the previous month.

The report also said the annual rate of producer price growth accelerated to 2.6 percent in June from an upwardly revised 2.4 percent in May.

The annual rate of producer price growth was expected to creep up to 2.3 percent from the 2.2 percent originally reported for the previous month.

Despite the advance by the broader markets, shares of Wells Fargo (WFC) moved sharply lower after the company reported weaker than expected net interest income for the second quarter.

Financial giants JPMorgan Chase (JPM) and Citigroup (C) also moved to the downside after reporting their second quarter results.

Networking stocks extended the strong upward move seen during Thursday’s session, driving the NYSE Arca Networking Index up by 1.6 percent to its best closing level in over two years.

Considerable strength also remained visible among housing stocks, as reflected by the 1.6 percent gain posted by the Philadelphia Housing Sector Index. The index ended the day at a nearly two-month closing high.

Semiconductor stocks also saw significant strength after falling sharply on Thursday, with the Philadelphia Semiconductor Index climbing by 1.3 percent.

Steel, oil service and computer hardware stocks also showed notable moves to the upside, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are slipping $0.07 to $82.14 a barrel after falling $0.41 to $82.21 a barrel last Friday. Meanwhile, after edging down $1.20 to 42,420.70 an ounce in the previous session, gold futures are inching up $1 to $2,421.70 an ounce.

On the currency front, the U.S. dollar is trading at 158.07 yen versus the 157.83 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0903 compared to last Friday’s $1.0907.

Asia

Asian stocks ended mixed on Monday as Chinese GDP data disappointed and the dollar firmed up on bets that Donald Trump will win the upcoming presidential election after an assassination attempt on Saturday.

Gold fell toward $2,400 per ounce in Asian trading, while oil prices were largely unchanged.

China’s Shanghai Composite Index ended a choppy session marginally higher at 2,974.01 as the country’s central bank left the medium-term lending facility rate unchanged and data showed China’s economic recovery lost steam in Q2, piling pressure on Beijing to make a major economic stimulus announcement at a twice-a-decade policy meeting.

Chinese GDP expanded 4.7 percent year-on-year in the second quarter of 2024, the National Bureau of Statistics said. That was shy of expectations for an increase of 5.1 percent and down from 5.3 percent in the three months prior.

Industrial output growth for June beat forecasts but retail sales lagged estimates and fixed asset investment figures matched expectations.

House prices were down 4.5 percent from last year after slumping 3.9 percent in May. The jobless rate came in at 5.0 percent, matching expectations and unchanged.

Hong Kong’s Hang Seng Index tumbled 1.5 percent to 18,015.94 as China’s third plenum kicked off to set economic strategy for the coming decade.

Japanese markets were closed for a public holiday.

Seoul stocks edged up slightly ahead of a busy week, with Fed Chair Jerome Powell’s speech, U.S. retail sales figures and Eurozone inflation data awaited. The Kospi closed 0.1 percent higher at 2,860.92.

Australian markets rose notably to hit record highs, with banks and miners leading the surge after a strong finish on Wall Street Friday.

The benchmark S&P/ASX 200 Index climbed 0.7 percent to 8,017.60, while the broader All Ordinaries Index closed up 0.7 percent at 8,262.40.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index finished marginally lower at 12,123.14 after a choppy session.

A survey showed earlier in the day that the services sector in New Zealand continued to contract in June, and at a faster pace.

Europe

European stocks were subdued on Monday after three straight sessions of gains. A cautious undertone prevailed as an attempt on former U.S. President Donald Trump’s life injected fresh uncertainty into an already tumultuous presidential campaign.

On the positive side, Eurostat data showed industrial production in the euro area fell less than expected in May.

Seasonally adjusted industrial production decreased by 0.6 percent in the month while analysts expected a 1.0 percent decline.

While the French CAC 40 Index has slid by 0.7 percent, the German DAX Index is down by 0.5 percent and the U.K.’s FTSE 100 Index is down by 0.4 percent.

China-related LVMH fell 1.7 percent, Hermes International gave up 1 percent and Kering lost nearly 4 percent after data showed China’s economy grew much slower than expected in the second quarter.

Communications technologist Ericsson fell 2.1 percent after it struck a multi-year cross-licensing patent agreement with handset vendor Oppo.

Swatch shares plunged nearly 11 percent. The Swiss manufacturer of watches and jewelry reported a decline in sales for the first half due to a sharp drop in demand for luxury goods in China.

British online grocer and tech company Ocado plummeted 8.6 percent as broker Bernstein downgraded the stock to ‘underperform’.

ME Group International, a vending machine operator, rose 1.1 percent after reporting a robust performance for the six months ending 30 April 2024.

Brunner Investment Trust added 1 percent after reporting a rise in half-year profit.
Robert Walters declined 2.3 percent. The recruitment company has reported a decline in gross profit over the first half of the year and warned that tough macro conditions are likely to last longer than expected.

BayWa AG, a trading logistics, and supplementary services provider, plummeted 32 percent after saying it has sought a restructuring opinion in response to a challenging financing situation.

Medical software firm CompuGroup Medical rose 1.5 percent after reporting its Q2 results.

Nordex Group shares fell 2.7 percent after an update that it has secured 3,357 MW of orders in its Projects segment, excluding service business, in the first half of 2024.

U.S. Economic News

A report released by the Federal Reserve Bank of New York on Monday showed regional manufacturing activity contracted at a slightly faster rate in the month of July.

The New York Fed said its general business conditions index edged down to a negative 6.6 in July from a negative 6.0 in June, with a negative reading indicating contraction. Economists had expected the index to come in unchanged.

Looking ahead, the New York fed said firms remained fairly optimistic conditions would improve in the months ahead, although the index for future business conditions fell to 25.8 in July from 30.1 in June.

At 12 pm ET, Federal Reserve Chair Jerome Powell is scheduled to participate in an interview hosted by the Economic Club of Washington.

San Francisco Federal Reserve President Mary Daly is due to participate in a session, called “The Bull, the Bear, and the Banker,” before the Fortune Brainstorm Tech 2024 at 4:35 pm ET.