Plus   Neg

U.S. Stocks May Move Back To The Downside In Early Trading

wallstreet aug23 08jul19 lt

After recovering from an early sell-off last Friday, stocks may move back to the downside in early trading on Monday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 78 points.

Selling pressure may resurface amid waning optimism about a near-term interest rate cut following the release of better than expected jobs data.

CME Group's FedWatch Tool still points to a rate cut at the next Federal Reserve meeting later this month, although expectations have dramatically shifted toward a 25 basis point cut rather than a 50 basis point cut.

The shift came after the Labor Department's closely watched report showed employment jumped by 224,000 jobs in June compared to expectations for an increase of 160,000 jobs.

In light of the focus on the outlook for rates, trading may be somewhat subdued ahead of Federal Reserve Chairman Jerome Powell's congressional testimony later this week.

Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

Wednesday will also see the release of the minutes of the Fed's last monetary policy meeting, which may shed additional light on the central bank's decision to make notable changes to its accompanying statement.

After falling sharply early in the session, stocks showed a substantial recovery attempt over the course of the trading day on Friday. The major averages climbed well off their worst levels of the day but still ended the session in negative territory.

The Dow fell by more than 230 points at its lows of the session but ended the day down just 43.88 points or 0.2 percent at 26,922.12. The Nasdaq edged down 8.44 points or 0.1 percent to 8,161.79 and the S&P 500 dipped 5.41 points or 0.2 percent to 2,990.41.

Despite pulling back off Wednesday's record closing highs, the major averages still moved to the upside for the week. The Dow jumped by 1.2 percent, while the Nasdaq and the S&P 500 surged up by 1.9 percent and 1.7 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index slumped by 1 percent, while China's Shanghai Composite Index plunged by 2.6 percent.

The major European markets have shown more modest moves to the downside on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is down by 0.3 percent.

In commodities trading, crude oil futures are edging down $0.17 to $57.34 a barrel after rising $0.17 to $57.51 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,407.50, up $7.40 from the previous session's close of $1,400.10. On Friday, gold plunged $20.80.

On the currency front, the U.S. dollar is trading at 108.55 yen compared to the 108.47 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1223 compared to last Friday's $1.12225.

For comments and feedback contact: editorial@rttnews.com

Follow RTT