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Futures Pointing To Initial Weakness On Wall Street

The major U.S. index futures are currently pointing to a lower open on Monday, with stocks likely to move to the downside after ending last Friday's trading narrowly mixed.

Lingering uncertainty about the outlook for interest rates may weigh on Wall Street following last week's stronger-than-expected jobs data.

Traders are likely to keep a close eye on the latest economic data, including upcoming inflation reports, as they look ahead to next week's Federal Reserve meeting.

The Fed is likely to slow the pace of interest rate hikes next week, but continued labor market tightness and elevated inflation may still lead the central bank to raise rates higher than currently anticipated.

Selling pressure may be somewhat subdued, however, as traders also react to news that some Chinese cities are easing Covid restrictions.

The moves come following recent widespread protests against China's zero-Covid policy, although reports suggest the country is not ready to completely abandon the policy.

After coming under pressure early in the session, stocks showed a notable turnaround over the course of the trading day on Friday. The major averages climbed well off their early lows, eventually ending the session mixed.

While the Dow inched up 34.87 points or 0.1 percent to 34,429.88, the Nasdaq dipped 20.95 points or 0.2 percent to 11,461.50 and the S&P 500 edged down 4.87 points or 0.1 percent to 4,071.70.

For the week, the Dow crept up by 0.2 percent, while the S&P 500 jumped by 1.1 percent and the Nasdaq surged by 2.1 percent.

The early weakness on Wall Street came following the release of the Labor Department's closely watched monthly jobs report, which showed stronger than expected job growth in the month of November.

The report said non-farm payroll employment jumped by 263,000 jobs in November after surging by an upwardly revised 284,000 jobs in October.

Economists had expected employment to shoot up by 200,000 jobs compared to the addition of 261,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate held at 3.7 percent in November, unchanged from October and in line with economist estimates.

While the report points to continued strength in the labor market, the data added to lingering uncertainty about the outlook for interest rates.

Semiconductor stocks recovered from their worst levels of the day, but the Philadelphia Semiconductor Index still fell by 1.2 percent.

Banking and computer hardware stocks also moved to the downside, while tobacco, steel and oil service stocks rallied.

Commodity, Currency Markets

Crude oil futures are surging $2.63 to $82.61 a barrel after slumping $1.24 to $79.98 a barrel last Friday. Meanwhile, after slipping $5.60 to $1,809.60 an ounce in the previous session, gold futures are edging down $0.50 to $1,809.10 an ounce.

On the currency front, the U.S. dollar is trading at 135.26 yen versus the 134.31 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0587 compared to last Friday's $1.0535.

Asia

Asian stocks turned in a muted performance on Monday, even as Chinese and Hong Kong stocks surged as businesses reopened and testing requirements were relaxed in several cities, including Beijing and Shanghai.

China's Shanghai Composite Index ended 1.8 percent higher at 3,211.81, as easing of Covid-19 curbs helped outweigh disappointing service sector data, with the Caixin/S&P Global services purchasing managers' index shrinking to its lowest level since May.

Hong Kong shares led regional gains, with the benchmark Hang Seng Index soaring 4.5 percent to 19,518.29 led by tech stocks.

Japanese shares ended slightly higher as the yen stabilized around technical levels and a survey showed the services sector in Japan continued to expand in November, albeit at a slower rate. The Nikkei 225 Index edged up 0.2 percent to 27,820.40, while the broader Topix closed 0.3 percent lower at 1,947.90.

Fast Retailing rallied 3.1 percent after the clothing store operator unveiled November sales figures. Robot maker Fanuc and cosmetic maker Shiseido both jumped around 3 percent on China reopening hopes.

Seoul stocks fell notably as a stronger-than-anticipated U.S. jobs report released on Friday revived worries about the pace of U.S. rate hikes. The Kospi fell 0.6 percent to 2,419.32, with tech and auto stocks pacing the declines.

Australian markets eked out modest gains despite weak readings on the country's service sector and gross company profits.

The benchmark S&P/ASX 200 Index rose 0.3 percent to 7,325.60 ahead of the RBA decision on Tuesday, with analysts expecting another modest 25-basis point rate hike. The broader All Ordinaries Index ended 0.3 percent higher at 7,527.80.

Mining and energy stocks topped the gainers list on China optimism, while banks ended on a subdued note.

Europe

European stocks are broadly lower on Monday after a survey showed business activity in the eurozone declined for a fifth month in November, adding to the likelihood that the region is sliding into a mild recession.

S&P Global's final composite Purchasing Managers' Index (PMI) for the region edged up to 47.8 in November from October's 23-month low of 47.3 and matching a preliminary estimate.

While the U.K.'s FTSE 100 Index has bucked the downtrend and risen by 0.3 percent, the German DAX Index and the French CAC 40 Index are both down by 0.6 percent.

Nestle has moved to the downside after the Swiss food and beverage company announced that it will restrict its marketing of high sugary products to kids under the age of 16.

National Grid has also edged lower after completing a £4.2 billion deal to sell a 60 percent equity interest in its U.K. gas transmission and metering business to a consortium.

On the other hand, Novartis has advanced. The pharmaceutical company said a prostate treatment that delivers radiation to specifically targeted cancer cells helped patients in a study that will be used for U.S. regulatory approval.

Mining giant Glencore has also shown strong move to the upside after entering into a $180 million corruption settlement with DRC.

Vodafone has also edged higher. The telecoms group said that Nick Read is stepping down as chief executive after four years in the top job.

U.S. Economic Reports

The Institute for Supply Management is scheduled to release its report on service sector activity in the month of November at 10 am ET.

The ISM's services PMI is expected to edge down to 53.1 in November from 54.4 in October, although a reading above 50 would still indicate growth in the sector.

Also at 10 am ET, the Commerce Department is due to release its report on new orders for manufactured goods in the month of October. Factory orders are expected to climb by 0.7 percent.

Stocks In Focus

Shares of Murphy Oil (MUR) are moving notably higher in pre-market trading after JPMorgan upgraded its rating on the oil exploration and production company's stock to Overweight from Neutral.

United Airlines (UAL) may also move to the upside after Morgan Stanley upgraded its rating on the company's stock to Overweight from Equal-Weight.

Meanwhile, shares of Starbucks (SBUX) may see initial weakness after Deutsche Bank downgraded its rating on the company's stock to Hold from Buy.

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