Futures Pointing To Initial Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Monday, with stocks likely to give back ground following the advance seen last week.

Traders may look to relative safety plays ahead of the Federal Reserve's highly anticipated monetary policy decision on Wednesday.

With the Fed widely expected to slow the pace of interest rate hikes to 25 basis points, traders will pay close attention to the accompanying statement for clues about the outlook for further rate hikes.

Recent upbeat economic data has generated some optimism the Fed could engineer a soft landing but has also led to concerns the central bank will need to keep rates at elevated levels for longer than anticipated.

Stocks saw considerable volatility over the course of the trading session on Friday but managed to close mostly higher. The tech-heavy Nasdaq showed a strong move to the upside, ending the session at its best closing level in over four months.

The major averages pulled back well off their highs going into the close. While the Nasdaq jumped 109.30 points or 1.0 percent to 11,621.71, the S&P 500 rose 10.13 points or 0.3 percent to 4,070.56 and the Dow inched up 28.67 points or 0.1 percent to 33,978.08.

For the week, the Nasdaq soared by 4.3 percent, the S&P 500 surged by 2.5 percent and the Dow show up by 1.8 percent.

The choppy trading on Wall Street came as traders looked ahead to the Federal Reserve's highly anticipated monetary policy meeting.

On the U.S. economic front, the Commerce Department released a report showing personal income increased in line with economist estimates in the month of December.

The report said personal income inched up by 0.2 percent in December after rising by a downwardly revised 0.3 percent in November.

Economists had expected personal spending to edge up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the Commerce Department said personal spending dipped by 0.2 percent in December after slipping by 0.1 percent in November. The modest decrease matched economist estimates.

The report also said core consumer prices, which exclude food and energy prices, rose by 0.3 percent in December after inching up by 0.2 percent in November.

The inflation reading, which is said to be preferred by the Fed, was expected to show another 0.2 percent uptick.

The Commerce Department said the annual rate of growth in core consumer prices slowed to 4.4 percent in December from 4.7 percent in November.

"With higher interest rates evidently weighing heavily on demand now, we expect core inflation to continue moderating this year, which will eventually persuade the Fed to begin cutting interest rates late this year," said Paul Ashworth, Chief North America Economist at Capital Economics.

A separate report from the National Association of Realtors showed an unexpected rebound in pending home sales in December, while the University of Michigan upwardly revised its reading on consumer sentiment in January.

The jump by the tech-heavy Nasdaq came despite a sharp decline by shares of Intel (INTC), with the semiconductor giant plunging by 6.4 percent.

The steep drop by Intel comes after the company reported weaker than expected fourth quarter results and forecast a loss for the current quarter.

Energy giant Chevron (CVX) also gave back ground after Thursday's surge after reporting fourth quarter earnings that missed analyst estimates.

Meanwhile, shares of American Express (AXP) soared by 10.5 percent after the credit card giant reported weaker than expected fourth quarter results but provided upbeat guidance for 2023 and increased its dividend.

Transportation stocks showed a strong move to the upside on the day, driving the Dow Jones Transportation Average up by 1.3 percent.

Notable strength was also visible among retail stocks, as reflected by the 1.2 percent gain posted by the Dow Jones U.S. Retail Index. The index reached its best closing level in three months.

On the other hand, oil stocks saw considerable weakness, resulting in a 1.8 percent slump by the NYSE Arca Oil Index. The pullback by the index came after it ended Thursday's trading at a record closing high.

Gold stocks also showed a significant move to the downside, dragging the NYSE Arca Gold Bugs Index down by 1.6 percent.

Commodity, Currency Markets

Crude oil futures are falling $0.32 to $79.36 a barrel after tumbling $1,33 to $79.68 a barrel last Friday. Meanwhile, after edging down $1.10 to $1,945.60 an ounce in the previous session, gold futures are slipping $2.80 to $1,942.60 an ounce.

On the currency front, the U.S. dollar is trading at 130.10 yen versus the 129.88 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0903 compared to last Friday's $1.0868.


Asian stocks fell broadly on Monday as investors looked ahead to a busy week of central bank announcements and earnings updates from U.S. tech heavyweights Amazon, Apple, Alphabet and Meta Platforms.

Chinese shares eked out modest gains as traders returned to their desks after a week-long holiday.

China's Shanghai Composite index edged up 0.14 percent to 3,269.32 as the country reported a sharp drop in new COVID-related deaths during the Lunar New Year holiday and the State Council vowed to boost consumption this year.

Hong Kong's Hang Seng index tumbled 2.73 percent to 22,069.73, dragged down by technology stocks ahead of U.S. tech earnings and Chinese business activity data due this week.

Japanese shares fluctuated before closing slightly higher at over one-month high. The Nikkei average inched up 0.19 percent to 27,433.40 as the earnings season reaches its peak this week. The broader Topix index ended marginally lower at 1,982.40.

Robot maker Fanuc jumped 3.6 percent and silicon wafer maker Shin-Etsu Chemical soared 5.1 percent after raising their annual operating profit outlook.

Seoul stocks fell sharply to snap a five-day winning streak, with tech and auto stocks leading losses.

The Kospi average lost 1.35 percent to settle at 2,450.47 as caution set in ahead of policy meetings from the Fed, the European Central Bank (ECB) and the Bank of England (BoE) later this week. Samsung Electronics and Hyundai Motor both ended down over 2 percent.

Australian markets ended a volatile session slightly lower as gains in technology stocks were offset by weakness in the mining and financial sectors.

The benchmark S&P/ASX 200 index slipped 0.16 percent to 7,481.70 while the broader All Ordinaries index closed 0.12 percent lower at 7,700.40.

Afterpay owner Block rallied 3.8 percent, Appen surged 2.7 percent, Xero added 3.1 percent and WiseTech Global soared 5.2 percent.

IAG lost 3.7 percent and Suncorp declined 2 percent after the insurance firms announced they would be hit by significant losses due to the significant claims related to the floods in New Zealand.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index finished marginally lower at 12,034.17.


European stocks declined on Monday as caution set in ahead of a busy week of U.S. tech earnings and a slew of central bank meetings.

Official data showed earlier today that the German economy unexpectedly fell in the fourth quarter, creating uncertainty going into 2023.

GDP decreased 0.2 percent quarter on quarter in adjusted terms, the federal statistics office said.

The European Commission is set to issue euro area economic sentiment survey results later in the day. The economic confidence index is seen at 97.0, up from 95.8 in December.

The pan European STOXX 600 dropped half a percent to 453.10 after gaining 0.3 percent on Friday.

The German DAX and France's CAC 40 index both eased around 0.4 percent, while the U.K.'s FTSE 100 was down 0.2 percent.

Philips surged 5.8 percent. The Dutch health technology company said it would scrap another 6000 jobs worldwide after fresh losses caused by a massive recall of faulty sleep respirators.

Amsterdam-listed Prosus NV slumped 5.5 percent after announcing job cuts.

Renault Group shares declined nearly 3 percent. The automaker has agreed with Japanese automotive firm Nissan Motor for a new collaboration to boost their ties.

British IT services company Computacenter jumped 9 percent after an announcement that it sees 2022 results slightly ahead of guidance.

888 Holdings plunged 21 percent. The betting and gaming company announced the departure of Itai Pazner, its chief executive officer (CEO) and executive director.

The company also said it has suspended VIP activities in some of its .com markets pending the outcome of an internal compliance investigation.

Consumer goods giant Unilever rose about 1 percent after naming a new CEO.

Legal & General Group tumbled 2.2 percent. Its chief executive Nigel Wilson is set to retire after more than a decade in the top job.

Total Energies SE dropped 1.2 percent. The energy firm and its Italian partner Eni S.p.A. have completed the transfer of a 30 percent interest in exploration Blocks 4 and 9 off the coast of Lebanon to QatarEnergy.

DEUTZ AG soared more than 5 percent. The German internal combustion engine maker announced that it has inked two multi-million euros agreements with the commercial vehicle maker Daimler Truck Holdings AG to develop and market medium- and heavy-duty engines.

U.S. Economic Reports

No major U.S. economic data is scheduled to be released today.

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