Stocks May See Further Upside In Early Trading - U.S. Commentary

wallstreet2 121214 26Feb18

Following the rally seen last Friday, stocks are likely to see some further upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 146 points.

Early buying interest may be generated by reaction to a continued drop by treasury yields, as the ten-year yield is pulling back further off the ten-year closing high set last Wednesday.

Trading activity may be somewhat subdued, however, with traders looking ahead to the release of several key economic reports.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of January.

New home sales are expected to jump by 3.2 percent to an annual rate of 645,000 in January after tumbling by 9.3 percent to a rate of 625,000 in December.

Reports on durable goods orders, consumer confidence, pending home sales, personal income and spending and manufacturing activity are also likely to attract attention in the coming days.

Additionally, new Federal Reserve Chair Jerome Powell is scheduled to deliver his semi-annual monetary policy report to Congress this week.

Traders are likely to keep a close eye on Powell's remarks amid lingering concerns about the outlook for interest rates.

After initially moving higher, stocks saw further upside over the course of the trading session on Friday. The major averages showed a significant advance after ending the previous session on opposite sides of the unchanged line.

The major averages ended the session at their best levels of the day. The Dow jumped 347.51 points or 1.4 percent to 25,309.99, the Nasdaq soared 127.31 points or 1.8 percent to 7,337.39 and the S&P 500 shot up 43.34 points or 1.6 percent to 2,747.30.

With the rally on the day, the major averages moved higher for the week. The Nasdaq surged up by 1.4 percent, while the S&P 500 and the Dow rose by 0.6 percent and 0.4 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index jumped by 1.2 percent, while Hong Kong's Hang Seng Index climbed by 0.7 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index is up by 0.6 percent and the U.K.'s FTSE 100 Index is up by 0.7 percent.

In commodities trading, crude oil futures are slipping $0.17 to $63.38 a barrel after climbing $0.78 to $63.55 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,339.10, up $8.80 from the previous session's close of $1,330.30. On Friday, gold fell $2.40.

On the currency front, the U.S. dollar is trading at 106.85 yen compared to the 106.89 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.2308 compared to last Friday's $1.2295.

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