The major U.S. index futures are pointing to a modestly higher opening on Monday following weak performance during the previous two weeks. The continuing inflow of deal news is seen to be reflecting hopes among companies that the recovery is here to say despite recent data relaying a prolonged soft patch. In reaction to these hopes, the prices of commodities have begun to turn higher. That said a break out of recent trading range is unlikely, given the lingering uncertainty.
U.S. stocks turned in a mixed performance in the week ended August 20th after the sharp losses witnessed in the previous week. Commodity stocks continued to face the brunt of the selling pressure, while financial stocks also saw weakness. However, some degree of buoyancy among retail, gold and technology stocks served to alleviate some of the weakness.
Last Monday, the major U.S. averages moved about in a lackluster manner amid the release of disappointing housing and manufacturing reports before closing slightly lower. However, stocks rebounded on Tuesday after some encouraging earnings reports from retailers helped traders to overlook the uncertain economic outlook.
The major averages held their ground on Wednesday, although they had few catalysts to react to, and closed moderately higher. A disappointing jobless claims report turned the tide on Thursday, dragging the major averages down by over 1%. Amid a lack of catalysts, the major averages turned in a lackluster performance on Friday to close mixed.
For the week, the Dow Industrials fell 0.87% and the S&P 500 Index receded 0.71%, while the Nasdaq Composite advanced 0.29%.
Among the sector indexes, the NYSE Arca Oil Index, the Philadelphia Oil Service and the KBW Bank Index fell over 2% each. On the other hand, the NYSE Arca Gold Bugs Index rose 3.18% and the S&P Retail Index added 2.27%. The Philadelphia Semiconductor Index rose 1.59%.
Currency, Commodity Markets
Crude oil futures for October delivery are currently rising $0.50 to $74.32 a barrel. The September futures expired last Friday at $73.46 a barrel, closing the week ended August 20th down $1.93 or 2.56%, extending the previous week's slide.
Last Monday, oil extended its slide to the fifth straight session amid the release of a lackluster homebuilder confidence reading. However, oil rebounded on Tuesday in reaction to a report that showed a rebound in industrial output and fairly robust retail earnings.
Oil receded modestly on Wednesday despite the weekly inventory report showing a slight decline in crude oil stockpiles and the modest gains posted by the equity markets. On Thursday, crude oil futures lost close to $1-a-barrel after a weak jobless claims report intensified risk aversion among traders. Oil continued to decline on Friday, as a lack of any major catalysts accentuated the uncertainty surrounding the economic recovery, closing the week notably lower.
Gold futures are currently rising $0.20 to $1,229 an ounce. In the previous week, the precious metal climbed $12.20 or 1% to $1,228.80 an ounce.
The U.S. dollar ended mixed in the week ended August 20th, with the currency capitalizing on its safe haven status and rising 0.34% against the euro to $1.2712, while it eased 0.67% against the yen to 85.615 yen.
The greenback is currently trading at 85.159 yen and is valued at $1.2704 against the euro.
Asia
The major Asian markets ended Monday's session on a mixed note. The Japanese market closed moderately lower, with exporters weighing on the Nikkei 225 Index, which closed down 62.69 points or 0.68% at 9,117. Australia's All Ordinaries moved about in a lackluster fashion, moving back and forth across the unchanged line to close down 1.60 points or 0.04% at 4,461 amid nervousness over uncertainty stemming from indecisive national election results. However, the Indian, Indonesian, Malaysian, Taiwanese and New Zealand markets closed higher.
Europe
The major European averages are advancing strongly on Monday after an uncertain start. Traders have looked past the weak signals relayed by Wall Street stocks last Friday, as a rebound in commodity stocks and deal news have given rise to some optimism.
The French CAC 40 Index and the German DAX Index are rising 0.65% and 0.30%, respectively, while the U.K.'s FTSE 100 Index is advancing 0.75%.
In corporate news, HSBC Holdings (HBC) announced its intention to buy a stake in South Africa's Nedbank, in which Old Mutual holds about a 52% stake.
The eurozone's private sector growth decelerated slightly in August as both manufacturing and services activity slowed. The Markit eurozone composite purchasing managers' index, an indicator of health at 4,500 companies across the region, fell to 56.1 from 56.7 in July.
Worryingly, growth in the euro area's private sector continued to be dependent upon the region's two biggest economies, France and Germany, suggesting increasing divergence in the region's two-speed recovery.
The decrease was mainly due to a drop by the manufacturing PMI, which fell to 55.0 from 56.7, a six-month low. Economists were looking for a score of 56.2. At the same time, the services PMI slid to 55.6 from 55.8, a two-month low. Economists had forecast a score of 55.5.
U.S. Economic Reports
Housing reports are likely to predominate proceedings on Main Street in the unfolding week. The National Association of Realtors' existing home sales report, the Commerce Department's new home sales report and the Federal Housing Finance Agency's house price index for June along with the durable goods orders report for July and the weekly jobless claims report are likely to be closely watched by traders.
The preliminary second quarter GDP report, the final reading of the Reuters/University of Michigan consumer sentiment index, the results of the Treasury auctions of 2-year, 5-year and 7-year notes and Fed speeches round up the other economic events of the week.
Existing home sales are expected to decline for the third straight month in July, with the softness stemming from the payback phenomena of stimulus-induced sales witnessed until April. Pending home sales declined yet again in June, although the decline was less severe than in the previous month. However, new home sales, which measure transactions rather than closings, could show a small bounce in July following a modest recovery in June. That said, a sustainable rebound in the sector is ruled out and stabilization is the best one can hope for.
Meanwhile, aided by a rebound in aircraft orders, durable goods orders are expected to show solid growth. However, non-aircraft orders could remain essentially flat. Boeing's (BA) order book indicates that it received 130 aircraft orders in July compared to 49 in June.
Economists expect second quarter GDP growth estimate to be downwardly revised from the advance estimate of 2.4%, primarily due to the June trade deficit widening by much more than expected. Capital Economics is of the view that the trade gap is so vast that it cannot be plugged by a rise in the growth rate of final sales to domestic purchasers.
Stocks in Focus
Hewlett-Packard (HPQ) and Dell (DELL) may be in focus after Hewlett-Packard came out with a competing offer for 3PAR (PAR), valuing the company at $24 per share or an enterprise value of $1.6 billion. Earlier Dell had offered $1.15 billion for 3PAR.
Potash Corp. of Saskatchewan (POT) could see some activity after it said its board said had voted unanimously to reject the unsolicited $130 per share cash offer by BHP Billiton (BHP). Meanwhile, reports suggest that Chinese private equity fund Hopu Investment Co. is studying the feasibility of making a bid for Potash.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.