The major U.S. index futures are pointing to a higher opening on Monday, with sentiment receiving a shot in the arm from the positive performance of the European markets. The markets across the Atlantic are seeing strong gains as evidence builds up concerning the strength of the recovery in the economies in the region. Germany reported strong export growth today, while investor sentiment in the euro zone region also seems to be improving significantly.
Given the absence of any major economic reports from the U.S., markets could tread waters before tomorrow's FOMC meeting. The prices of commodities are seeing modest strength and are likely to offer some support to markets.
U.S. stocks advanced in the week ended August 6th after the mixed performance in the previous week, with commodity and financial stocks leading from the front. The release of some not-so-disappointing economic reports helped to offset the weakness triggered by profit taking that picked up pace in reaction to some discouraging economic reports.
Last Monday, propelled by strong manufacturing sector reports from the U.S. as well as Europe and solid earnings, the major averages moved up notably, rising about 2% each and settling at 3-month highs. However, stocks retreated on Wednesday following the release of a report that showed anemic personal income and spending growth. The major averages all ended moderately lower.
The markets received support from a fairly encouraging private sector employment report on Wednesday, with the major averages closing moderately higher in the session. Worries about Friday's jobs data and selling due to profit taking took the sheen out of the markets on Thursday, as the major averages closed modestly lower.
On Friday, stocks languished below the unchanged line for much of the session before closing off the lows of the session after the Labor Department's non-farm payrolls report came in weaker than expected.
For the week, the Dow Industrials ended up 1.79%, the S&P 500 Index added 1.82% and the Nasdaq Composite Index gained 1.50%.
Among the sector indexes, the NYSE Arca Oil Index and the Philadelphia Oil Service Index rose 4.27% and 3.68%, respectively, while the NYSE Arca Gold Bugs Index rose 3.92%. The KBW Bank Index rallied 5.41% compared to a 3.03% advance by the NYSE Arca Securities Broker/Dealer Index.
Currency, Commodity Markets
Crude oil futures are rising $0.66 to $81.36 a barrel after advancing $1.75 or 2.22% to $80.70 a barrel in the week ended August 6th. Last Monday, oil extended its previous week's gains, advancing about $1.40-a-barrel after manufacturing data and positive earnings lent support to the commodity. Oil gained additional ground on Tuesday and rose over $1.20-a-barrel, taking cues from the dollar's weakness.
The black gold edged down modestly on Wednesday, as profit taking resulted in some weakness, especially after it climbed above $82-a-barrel in the previous session. The commodity declined modestly on Thursday and pulled back yet again on Friday, pressured by the weak national non-farm employment report. Still, oil finished the week higher.
Gold futures, which climbed $21.40 or 1.81% to $1,205.30 an ounce in the previous week, are currently rising $3.40 to $1,208.70 an ounce.
The U.S. dollar came under selling pressure in the week ended August 6th, as cloudy economic data confounded the economic outlook further. The greenback lost 1.11% against the yen to 85.5105 yen, while it weakened 1.7% against the yen to 1.3279.
The U.S. dollar is currently trading at 85.672 yen and is valued at $1.3244 versus the euro.
Asia
Ignoring a shaky start, the major Asian markets Monday's session mostly higher, with the exception of the Japanese and Singaporean markets. The early weakness was triggered by negative reaction to Friday's non-farm payrolls report. However, sentiment improved over the course of the session.
Japan's Nikkei 225 average opened lower and moved sideways for the rest of the session. The index ended down 69.63 points or 0.72% at 9,573.
In economic news, the Bank of Japan said its current account surplus, the broadest measure of trade, fell 18.2% year-over-year in June as foreign bond yields dropped and income from overseas investments declined sharply. However, Japan saw a trade surplus of 769 billion yen, up 26.6% year-on-year. Imports totaled 4.8 trillion yen, up 29.6%, while exports came in at 5.6 trillion yen, up 29.2%.
Australia's All Ordinaries opened lower, but it recovered in early trading and advanced thereafter to close moderately higher. The index closed up 29.30 points or 0.64% at 4,616. Material stocks advanced solidly, while energy, healthcare and industrial stocks also advanced.
Hong Kong's Hang Seng Index saw some volatility in the morning before moving decisively into positive territory in the afternoon. The index closed up 122.79 points or 0.57% at 21,802. China-related and retail stocks saw big gains, while property stocks closed mixed. Hong Kong-based bank stocks declined.
Europe
The major European markets are trading higher on Monday, with the French CAC 40 Index and the German DAX Index rising 1.54% and 1.41%, respectively, while the U.K.'s FTSE 100 Index is gaining 1.48%.
On the economic front, a private survey showed investor confidence in the euro zone region improved in August. The investor confidence index rose to 8.5 in August from 1.3 in July, while economists had expected a more modest improvement to 1.6.
The German Federal Statistical Office reported that German exports rose a better than expected 3.8% month-over-month in June. Meanwhile, imports rose 1.9%. Economists had expected a 1.5% increase in exports, but a 2% drop in imports. The country reported a surplus of 12.3 billion euros for June. Provisional estimates showed that the nation's current account surplus narrowed to 12.8 billion euros from 12.9 billion euros in the year-ago period.
U.S. Economic News
Although there is little chance of seeing a surprise, the FOMC meeting is likely to headline the macroeconomic events of the unfolding week. The Commerce Department's retail sales report, the weekly jobless claims report and the Reuters/University of Michigan's consumer sentiment report are among the other important economic reports due for release.
The preliminary second quarter productivity and costs report, the Commerce Department's wholesale and business inventories reports, the consumer price inflation report, the Commerce Department's trade balance report, the import and export prices data and the treasury budget round up the other economic events of the week. Traders may also focus on the results of the Treasury auctions of 3-year and 10-year notes and 30-year bonds.
Despite some recent data points surprising to the downside, the Federal Reserve is unlikely to announce any new easing measures at the upcoming meeting. However, most economists expect the Fed to downgrade its assessment of economic conditions. The Fed will most likely stay on hold, while maintaining the cautious tone of prior statements.
After seeing some softness in recent months, retail sales may see a bounce, supported by a rise in gasoline prices. Additionally, the headline number may receive some support from auto sales, which saw a fairly strong performance in July. However, underlying sales growth could be soft, given the lackluster chain store sales reported for the month.
With energy prices expected to rise due to seasonal adjustments, headline consumer price inflation should accelerate in July. However, the core inflation rate is expected to remain unchanged. Going by the mild core inflation in recent months, BNP Paribas expects the trend towards disinflation to continue in the quarters ahead.
Stocks in Focus
Earnings
Berkshire Hathaway (BRKA) reported that its second quarter earnings declined year-over-year to $1.97 billion or $1,195 per Class A share from $3.3 billion or $2,123 per Class A share. However, operating profits rose to $3.07 billion or $1,866 per share from $1.78 billion or $1,147 per share.
Dish Network (DISH) said its second quarter earnings per share rose to 57 cents per share from 14 cents per share last year. The company's revenues rose 9.1% to $3.1 billion. Analysts estimated earnings of 53 cents per share on revenues of $3.13 billion.
King Pharma (KG) reported second quarter adjusted earnings of 17 cents per share compared to 32 cents per share last year. Revenues fell to $371 million from the year-ago's $445 million. The consensus estimates called for earnings of 16 cents per share on revenues of $361.07 million.
WellCare (WCG) reported a loss of $3.50 per share compared to net income of 88 cents per share last year. The company's adjusted net income was 90 cents per share, lower than $1.42 per share in the year-ago period. Analysts estimated earnings of 52 cents per share on revenues of $1.35 billion. Separately, the company announced that it has reached an agreement on a securities class action lawsuit against the company and the settlement calls for the company making cash payments to the class of $87.5 million in aggregate and issue unsecured bonds having an aggregate face value of $112.5 million.
Other Corporate News
Hewlett-Packard (HPQ) could be in focus after it announced the departure of its CEO Mark Hurd following claims of sexual harassment against him. The company also announced the appointment of CFO Cathie Lesjak as CEO on an interim basis. The company also announced preliminary third quarter results, expecting non-GAAP earnings of $1.08 per share. Analysts estimate earnings of $1.07 per share.
The company said it expects fourth quarter non-GAAP earnings of $1.25-$1.27 on revenues of $32.5 billion to $32.7 billion. It upwardly revised its full year non-GAAP earnings guidance to $4.49-$4.51 per share and revenues to $125.3 billion to $125.5 billion. The consensus estimates call for earnings of $4.49 per share on revenues of $124.51 billion.
Lattice Semiconductor (LSCC) is also expected to be in focus after it announced the resignation of its CEO Bruno Guilmart, effective September 4th, 2010. The company appointed Christopher Fanning, a company executive, as its CEO on an interim basis.
Nabors Industries (NBS) is expected to see some activity after it said it has agreed to buy Superior Well Servicea (SWSI) for about $900 million. The purchase is through the commencement of a tender offer for acquiring all outstanding shares of Superior at $22.12 per share.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.