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Futures Pointing To Initial Weakness On Wall Street

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The major U.S. index futures are pointing to a lower opening on Monday, with stocks poised to add to the losses posted last week.

The downward momentum on Wall Street comes as traders look ahead to the Federal Reserve's highly anticipated monetary policy announcement next Wednesday.

With the Fed widely expected to raise interest rates by 25 basis points, traders are likely to keep an eye on the accompanying statement for clues about the outlook for future rate hikes.

New Fed Chairman Jerome Powell's first press conference as head of the central bank is also likely to attract considerable attention.

Stocks moved mostly higher during trading on Friday following the mixed performance seen in the previous session. The Dow and the S&P 500 spent most of the day in positive territory, while the tech-heavy Nasdaq bounced back and forth across the unchanged line.

The major averages all eventually closed higher, although the Nasdaq inched up just 0.25 points or less than a tenth of a percent to 7,481.99. The Dow rose 72.85 points or 0.3 percent to 24,946.51, and the S&P 500 edged up 4.68 points or 0.2 percent to 2,751.01.

Despite the upward move on the day, the major averages moved to the downside for the week. While the Dow slumped by 1.5 percent, the S&P 500 and the Nasdaq slid by 1.2 percent and 1 percent, respectively.

The higher close on Wall Street partly reflected a positive reaction to reports showing an unexpected improvement in consumer sentiment and a bigger than expected jump in industrial production.

The University of Michigan said the preliminary reading on its consumer sentiment index for March came in at 102.0, up from the final February reading of 99.7. Economists had expected the index to edge down to 99.3.

"Consumer sentiment rose in early March to its highest level since 2004 due to a new all-time record favorable assessment of current economic conditions," said Richard Curtin, the survey's chief economist.

A separate report from the Federal Reserve showed a substantial rebound in industrial production in the month of February.

The Fed said industrial production surged up by 1.1 percent in February after dipping by a revised 0.3 percent in January. Economists had expected production to rise by 0.3 percent.

On the other hand, the Commerce Department released a report showing a pullback in new residential construction in the month of February.

The report said housing starts plunged by 7.0 percent to an annual rate of 1.236 million in February after jumping by 10.1 percent to a revised 1.329 million in January.

Economists had expected housing starts to drop by 2.7 percent to a rate of 1.290 million from the 1.326 million originally reported for the previous month.

The Commerce Department said building permits also tumbled by 5.7 percent to a rate of 1.298 million in February after surging up by 5.9 percent to a revised 1.377 million in January.

Building permits, an indicator of future housing demand, had been expected to slump by 5.4 percent to a rate of 1.32 million from the 1.396 million originally reported for the previous month.

Political uncertainty may have kept some traders on the sidelines amid reports President Donald Trump plans to remove national security adviser H.R. McMaster.

The White House has denied the reports, with press secretary Sarah Sanders saying there are "no changes" at the National Security Council.

After falling sharply in the previous session, energy stocks showed a strong move back to the upside on the day. The rebound by energy stocks came amid a significant increase by the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 1.9 percent and the NYSE Arca Natural Gas Index jumped by 1.5 percent.

Significant strength was also visible among computer hardware stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Computer Hardware Index. With the advance, the index reached its best closing level in well over a month.

Utilities, brokerage, and transportation stocks also moved notably higher on the day, while tobacco stocks showed a substantial move to the downside.

Commodity, Currency Markets

Crude oil futures are edging down $0.02 to $62.32 a barrel after jumping $1.15 to $62.34 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,311.30, down $1 from the previous session's close of $1,312.30. On Friday, gold fell $5.50.

On the currency front, the U.S. dollar is trading at 106.24 yen compared to the 106.01 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.2307 compared to last Friday's $1.2290.

Asia

Asian stocks ended mixed on Monday as investors awaited the U.S. Federal Reserve's highly anticipated monetary policy decision due later in the week as well as new Fed Chairman Jerome Powell's first press conference for directional cues.

China's S
hanghai Composite index rose 0.29 percent to 3,279.25 and Hong Kong's Hang Seng index was marginally higher in late trade after Chinese President Xi Jinping was re-elected unanimously to the post over the weekend by the country's legislature.

Japanese shares closed lower after an opinion poll showed Prime Minister Abe's support falling to its lowest since he took office in 2012.

The Nikkei average fell 195.61 points or 0.90 percent to 21,480.90, its lowest close since March 9, while the broader Topix index closed 0.96 percent lower at 1,719.97. Exporters, banks and brokerages paced the decliners.

Investors ignored preliminary figures from the Ministry of Finance showing that Japan's exports and imports grew more-than-expected in February. The value of exports climbed 1.8 percent year-over-year in February, faster than the 1.4 percent rise economists had forecast.

Imports surged 16.5 percent in February from a year ago, just above the expected spike of 16.0 percent. As a result, the overall trade surplus declined notably to JPY 3.4 billion in February from JPY 804.5 billion in the same month of 2017.

Australian shares ended a choppy session higher even as banks extended recent losses ahead of the U.S. Federal Reserve meeting this week.

The benchmark S&P/ASX 200 index rose 10 points or 0.17 percent to 5,959.40 while the broader All Ordinaries index ended up 9.80 points or 0.16 percent at 6,064.70.

Banks Commonwealth and NAB as well as retailer Wesfarmers shed around 0.6 percent each. Mining heavyweights BHP Billiton and Rio Tinto eked out modest gains, while energy stocks such as Woodside Petroleum and Santos climbed 2-3 percent.

Europe

European stocks tumbled on Monday as trade-war fears continued to weigh and investors looked ahead to Wednesday's meeting of the U.S. Federal Reserve as well as the Bank of England policy meeting on Thursday for directional cues.

The pan-European Stoxx Europe 600 index was down 0.7 percent at 375.02 in late opening deals after rising 0.2 percent on Friday.

The German DAX was down 1 percent, France's CAC 40 index was moving down 0.8 percent and the U.K.'s FTSE 100 was down over 1 percent.

Mining giant Rio Tinto tumbled 2.5 percent on reports that it has hired UBS to explore a possible public listing of its Pacific Aluminum smelting business on the Australian Stock Exchange.

Melrose Industries fell over 1 percent. The company announced that its final offer to GKN Plc. of 466 pence in value today and 60 percent of future value creation is clearly superior to the hasty break-up being pursued by the GKN Board.

Micro Focus International shares slumped as much as 52 percent. The software product group cut its fiscal 2018 revenue forecast after posting weak revenues for the first-half.

Hammerson soared 26 percent. The British landlord said it has rebuffed a takeover offer from French mall operator Klépierre. Shares of Klepierre fell almost 3 percent in Paris.

Barclays shares jumped around 4 percent after activist investor Sherborne took a 5 percent stake in the bank.

German consumer goods firm Henkel fell as much as 5 percent after saying it had a slow start into 2018 due to delivery difficulties in North America.

French building materials firm Saint-Gobain was marginally lower after it acquired Italian glass systems specialist Logli Massimo.

U.S. Economic Reports

After a relatively quiet start, the economic calendar for the week picks up with the Federal Reserve's monetary policy announcement on Wednesday.

Reports on new and existing home sales, durable goods orders, and leading economic indicators may also attract attention in the coming days.

At 9 am ET, Atlanta Fed President Raphael Bostic is due to participate in an armchair chat on the Community Reinvestment Act at the "National Interagency Community Reinvestment Conference" in Miami.

by RTTNews Staff Writer

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