The major U.S. stock index futures are indicating a downward opening for Monday, suggesting a pullback after the recent upward momentum in the markets. Investors are likely to capitalize on this upward trend, which has seen the primary indices close higher for six successive weeks. This rally has propelled the Dow Jones Industrial Average and the S&P 500 to new record levels, while the Nasdaq is nearing the peak it achieved in July.
Despite this, overall trading may be somewhat restrained as market participants anticipate a wave of earnings reports from prominent corporations, including 3M, General Motors, Verizon, Boeing, Coca-Cola, IBM, Tesla, and UPS. Additionally, economic data on durable goods orders and housing sales, both new and existing, will capture attention along with insights from the Federal Reserve's Beige Book.
Following a mostly unchanged Thursday session, Friday saw a general upward movement in stocks, with the tech-laden Nasdaq leading the way. The Dow also posted a modest gain, achieving a new record closing high. Specifically, the Nasdaq advanced by 115.94 points (0.6%) to 18,489.55, and the S&P 500 increased by 23.20 points (0.4%) to a new record close of 5,864.67. The Dow, recovering from an initial decline, edged up 36.86 points (0.1%) to finish at 43,275.91.
Over the week, the Dow rose by 1.0%, while the S&P 500 and Nasdaq increased by 0.9% and 0.8%, respectively. Notably, Netflix shares surged by 11.1% to a new closing high, buoyed by its third-quarter results surpassing analysts’ expectations.
The strength observed on Wall Street might also correlate with the continued optimism about the U.S. economic outlook, following an encouraging set of data. However, American Express shares fell significantly by 3.2%, limiting the Dow's gains, as the company reported earnings that exceeded expectations but fell short on revenue.
In U.S. economic developments, the Commerce Department reported a minor decrease in housing starts for September, with starts falling 0.5% to an annual rate of 1.354 million, following a 7.8% increase in August. This was slightly below economists’ projections of a 0.4% decrease. Furthermore, building permits saw a substantial decline of 2.9% to an annual rate of 1.428 million, missing expectations of a 1.0% drop.
Gold stocks experienced a notable upswing, lifting the NYSE Arca Gold Bugs Index by 4.8%—its best closing level in nearly four years—driven by gold prices reaching new highs. Considerable gains were also seen in airline stocks, with the NYSE Arca Airline Index climbing 3.0% to a six-month high. Telecom stocks exhibited strength, reflected by a 2.5% increase in the NYSE Arca Telecom Index. While retail and housing stocks moved upward, oil service stocks declined in tandem with falling crude oil prices.
**Commodity and Currency Markets**
In commodities, crude oil futures are rising by $1.21 to $70.43 per barrel after plunging $1.45 to $69.22 per barrel last Friday. Meanwhile, gold futures are increasing by $22.30 to $2,752.30 an ounce, building on a gain of $22.50 to $2,730 an ounce in the previous session.
On the currency market, the U.S. dollar is trading at 149.81 yen, up from 149.53 yen in Friday's New York session. Against the euro, the dollar is valued at $1.0856, slightly down from last Friday's $1.0867.
**Asia**
In Asia, stock performances were mixed on Monday as China's central bank once again reduced interest rates and banks continued to slash borrowing costs in response to the nation's persistent economic challenges. Concurrently, the U.S. dollar weakened amid the global financial summit in Washington, held under the shadow of wars in the Middle East and Europe, and uncertainty surrounding the U.S. presidential election.Gold has soared to a new peak, while oil prices have experienced a rebound after a near 8% drop last week amid concerns over Chinese demand. In a renewed military effort, Israel launched attacks on Hezbollah strongholds in Lebanon shortly after a drone explosion near Prime Minister Benjamin Netanyahu’s residence. Tensions persist as Israel has vowed retaliation against Iran following a missile strike earlier this month.
In China, the Shanghai Composite Index edged up 0.20% to close at 3,268.11 after a turbulent trading session. This follows the People’s Bank of China's decision to reduce the Loan Prime Rates for both one and five years by 25 basis points, bringing them to 3.1% and 3.6%, respectively. Meanwhile, Hong Kong's Hang Seng Index fell 1.6% to 20,478.46, driven by declines in tech stocks and investor anticipation of earnings reports from major firms like Ping An and HKEX.
Japanese stock markets remained relatively stable with minimal changes, influenced by diminishing expectations of a BoJ rate hike and the upcoming general election. The Nikkei 225 Index slightly decreased to 38,954.60, while the Topix Index experienced a 0.3% decline, closing at 2,679.91. In South Korea, the Kospi Index rose by 0.4% to 2,604.92, breaking a three-day losing streak, thanks to gains in major stocks such as Hyundai Motor, Korean Air, and Jeju Air.
Australian markets saw an upswing, spurred by increases in commodity prices that favored mining and energy sectors. The S&P/ASX 200 Index advanced by 0.7% to 8,344.40, while the All Ordinaries Index finished 0.6% higher at 8,604.10. Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index climbed 0.8% to 12,923.22, approaching the 13,000-point milestone for the first time since 2021.
In Europe, equity markets predominantly dipped as mining and energy sectors benefited from higher commodity prices. The euro faced downward pressure due to a lack of significant data releases. Simultaneously, the British pound weakened against a stronger dollar, albeit remained above the $1.30 mark. ECB policymaker Gediminas Simkus remarked that rates could potentially dip below the natural level of 2% to 3% if a decline in inflation persists.
The UK's FTSE 100 Index saw a slight decrease of 0.2%, with Germany’s DAX Index and France's CAC 40 Index both declining by 0.8%. Notably, FirstGroup gained following the acquisition announcement of Anderson Travel. Additionally, Hollywood Bowl witnessed a surge as it anticipated outperforming market predictions for adjusted earnings in fiscal 2024. Finnish network firm Nokia Oyj progressed after teaming up with Vietnam Posts and Telecommunications Group to roll out 5G technology.
Dutch coffee enterprise JDE Peets experienced significant gains after appointing a new CEO and affirming its 2024 outlook. Norway's DNB Bank ascended following its agreement to acquire all shares of Carnegie Holding AB for around 12 billion Swedish kronor. Forvia, ranked as the seventh-largest car parts supplier globally, also surged after exceeding third-quarter sales estimates. Conversely, Sanofi faced declines amid ongoing negotiations to sell a controlling 50% stake in its consumer healthcare segment, Opella, to private equity firm CD&R. Reinsurance monolith Munich Re faced a downturn after a rating downgrade by Jefferies.
In the United States, the Conference Board is set to release figures on leading economic indicators for September at 10 am ET. Analysts expect a 0.3% decrease after a 0.2% dip in August. Additionally, Minneapolis Federal Reserve President Neel Kashkari and Kansas City Federal Reserve President Jeffrey Schmid are slated to deliver public remarks later in the day.
