Market Analysis

Beyond the Number

Looming Fed Testimony, Data May Lead To Choppy Trading On Wall Street
11/27/2017 8:48 AM

The major U.S. index futures are pointing to a mixed opening on Monday, with the Dow futures up by 12 points but the Nasdaq futures down by 2 points.

Trading activity may be somewhat subdued ahead of congressional testimony from Federal Reserve Chair nominee Jerome Powell and current Fed Chair Janet Yellen.

The Senate Banking Committee is due to hold a confirmation hearing for Powell on Tuesday, while Yellen is scheduled to testify on the economic outlook before the Congressional Joint Economic Committee on Wednesday.

Economic data may also attract attention this week, as traders are likely to keep a close eye on reports on consumer confidence, pending home sales, personal income and spending, and manufacturing activity.

Following the Thanksgiving Day holiday on Thursday, stocks saw modest strength in an abbreviated trading session on Friday. With the upward move on the day, the tech-heavy Nasdaq and the S&P 500 reached new record closing highs.

The major averages ended the day in positive territory. The Dow inched up 31.81 points or 0.1 percent to 23,557.99, the Nasdaq climbed 21.80 points or 0.3 percent to 6,889.16 and the S&P 500 rose 5.34 points or 0.2 percent to 2,602.42.

For the holiday-interrupted week, the Nasdaq surged up by 1.6 percent, while the Dow and the S&P 500 both advanced by 0.9 percent.

The strength on Wall Street partly reflected recent upward momentum, which has propelled to stocks to new record highs.

Trading activity remained subdued, however, as many traders remained away from their desks following the holiday.

An early close on Wall Street also contributed to the light trading, with the U.S. stock markets closing at 1 pm ET.

Despite the advance shown by the broader markets, most of the major sectors showed only modest moves on the day.

Semiconductor and internet stocks saw some strength, while gold stocks moved to the downside along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are sliding $0.65 to $58.30 a barrel after climbing $0.93 to $58.95 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,295.20, up $7.90 from the previous session’s close of $1,287.30. On Friday, gold fell $4.90.

On the currency front, the U.S. dollar is trading at 111.04 yen compared to the 111.53 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1947 compared to last Friday’s $1.933.


Asian stocks closed broadly lower on Monday as investors awaited key data from the U.S. and China this week for clues on growth and the interest rate outlook. Traders also kept an eye on oil price movements ahead of a major meeting among oil producers on November 30th.

Chinese stocks fell sharply on concerns over rising borrowing costs as Beijing stepped up a crackdown to fend off financial risks. The benchmark Shanghai Composite Index dropped 30.99 points or 0.9 percent to 3,322.83 amid bond market jitters, while Hong Kong's Hang Seng Index fell 180.13 points or 0.6 percent to 29,686.19.

Japanese shares gave up early gains to end modestly lower as a slightly stronger yen sapped investors' appetite for risk. The Nikkei 225 Index slid 54.86 points or 0.2 percent to 22,495.99, and the broader Topix Index closed 0.2 percent lower at 1,776.73.

Kawasaki Heavy Industries, Sumitomo Heavy Industries and Sumco lost 2-4 percent. Meanwhile, Nintendo rallied 2.4 percent following reports of record Black Friday and Thanksgiving online sales in the U.S.

Australian shares closed marginally higher and the Aussie dollar slid after China, Australia's largest trading partner, cut import tariffs on 187 consumer goods.

The benchmark S&P/ASX 200 Inched up 6.20 points or 0.1 percent to 5,988.80, while the broader All Ordinaries Index edged up 7.30 points or 0.1 percent at 6,070.40.

Healthcare and industrial stocks rose, with Ramsay Health Care rising over 1 percent and Downer EDI jumping as much as 5 percent. Gold miners such as Newcrest and Regis Resources suffered heavy losses after gold fell Friday for its first weekly drop in three weeks.

Seoul stocks tumbled to hit a four-week low amid selling by foreign investors. The benchmark Kospi plunged 36.52 points or 1.4 percent to finish at 2,507.81. Market heavyweight Samsung Electronics tumbled 5.1 percent after a brokerage downgrade, while chipmaker SK Hynix lost 2.4 percent.


European stocks have moved modestly lower on the day as investors look ahead to a heavy run of data due this week and a possible U.S. Senate vote on proposed tax changes.

While the French CAC 40 Index has fallen by 0.3 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.2 percent.

Belgian supermarket firm Colruyt has shown a notable move to the downside after Deutsche Bank cut its price target on the stock.

Swiss private bank Julius Baer Group has also tumbled after CEO Boris Collardi resigned from his position.

British education group Pearson has fallen after it agreed to sell its language-teaching unit Wall Street English for $300 million.

Meanwhile, Aviva shares have rallied following reports that the insurer will likely spend 1 billion pounds on a share buyback.

Consumer goods giant Unilever has also advanced after the company said it has started its search for a successor to Chief Executive Officer Paul Polman.

U.S. Economic Reports

At 10 am ET, the Commerce Department is scheduled to release its report on new home sales in the month of October.

New home sales are expected to slump by 6.3 percent to an annual rate of 625,000 in October after unexpectedly spiking by 18.9 percent to a rate of 667,000 in September.

The Treasury Department is due to announce the results of its auction of $26 billion worth of two-year notes at 11:30 am ET.

At 1 pm ET, the Treasury is scheduled to announce the results of its auction of $34 billion worth of five-year notes.

Minneapolis Federal Reserve President Neel Kashkari is due to participate in a moderated Q&A at Winona State University's Town Hall in Winona, Minnesota, at 6 pm ET.

At 7 pm ET, New York Fed President William Dudley is scheduled speak about the “U.S. Economy: 10 Years after the Crisis” at an event in New York.
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