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Futures Pointing To Initial Strength On Wall Street

wallstreet oct25 03aug20 lt

Following the advance seen last Friday, stocks may 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 138 points.

The Nasdaq futures are showing an even stronger upward move, suggesting technology stocks may help to lead the markets higher once again.

Shares of Microsoft (MSFT) are moving significantly higher in pre-market trading after the software giant confirmed it is in talks to acquire Chinese-owned video app TikTok.

The statement from Microsoft comes just days after President Donald Trump revealed plans to ban TikTok in the U.S. due to national security concerns.

Apple (AAPL), Amazon (AMZN) and Google parent Alphabet (GOOGL) are also seeing pre-market strength after reporting better than expected quarterly results last week.

Early buying interest may also be generated in reaction to upbeat economic data from overseas, with a report showing the Chinese manufacturing sector expanded at the fastest pace since early 2011.

The Caixin manufacturing Purchasing Managers' Index rose to 52.8 in July from 51.2 in June, as market conditions continued to recover from the coronavirus outbreak.

A separate report showed the euro area manufacturing sector returned to growth in July for the first time in a year and a half as output and demand continued to recover.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the U.S. manufacturing sector in the month of July.

The ISM's purchasing managers index is expected to inch up to 53.6 in July from 52.6 in June, with a reading above 50 indicating growth in manufacturing activity.

The Commerce Department is also due to release its report on construction spending in the month of June. Economists expect construction spending to drop by 0.5 percent in June after slumping by 2.1 percent in May.

Stocks saw considerable volatility over the course of the trading session on Friday before eventually ending the day mostly higher. The major averages all moved to the upside late in the session, with the tech-heavy Nasdaq showing a particularly strong upward move.

After falling as much as 300 points, the Dow ended the day up 114.67 points or 0.4 percent at 26,428.32. The Nasdaq surged up 157.46 points or 1.5 percent to 10,745.27 and the S&P 500 climbed 24.90 points or 0.8 percent at 3,271.12.

Despite the advance on the day, the major averages turned in a mixed performance for the week. The Dow dipped by 0.2 percent, while Nasdaq soared by 3.7 percent and the S&P 500 jumped by 1.7 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index surged up by 2.2 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.

Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the German DAX Index has spiked by 2.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are up by 1.4 percent and 1.3 percent, respectively.

In commodities trading, crude oil futures are edging down $0.01 to $40.26 a barrel after rising $0.35 to $40.27 a barrel last Friday. Meanwhile, after jumping $19.10 to $1,985.90 an ounce in the previous session, gold futures are inching up $2 to $1,987.90 an ounce.

On the currency front, the U.S. dollar is trading at 106.24 yen versus the 105.83 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1733 compared to last Friday's $1.1778.

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