Benzinga - by Shanthi Rexaline, Benzinga Editor.
The negative cloud that has enveloped the market in the new year apparently hasn’t lifted, as index futures point to a lower opening on Monday. The grounding of Boeing Co.’s (NYSE:BA) 737 MAX 9 jets following an accident involving one of its kind has impacted sentiment toward all airline stocks, dragging the Dow futures sharply lower. Traders may also prefer to stay cautious ahead of a duo of inflation reports due later this week and the kickstart of the big bank earnings Friday.
Cues From Past Week’s Trading:
U.S. stocks pulled back in the week ended Jan. 5, with the Fed hinting through the December monetary policy meeting minutes that rate cuts may not be imminent. Bond yields resumed their climb amid the hawkish message. The market participants also expressed wariness over the valuations of mega-cap tech stocks ahead of the fourth-quarter reporting season.
Techs and small-cap stocks served as drags as the averages stalled a nine-week winning streak.
US Index Performance In Week Ended Jan. 5
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -3.25% | 14,524.07 |
| S&P 500 Index | -1.52% | 4,697.24 |
| Dow Industrials | -0.59% | 37,466.11 |
| Russell 2000 | -3.75% | 1,951.14 |
Analyst Color:
Volatility will likely be the name of the game in the new year, going by comments from Commonwealth Financial Network Chief Investment Officer Brad McMillan. ”While conditions are good, volatility looks likely,” said the analyst.
“Looking forward to the new year, we are still not out of the woods with inflation or growth. And while the trends remain positive, risks may pick up again over the next couple of months,” he said.
The two key things to watch for, the analyst said, are consumer confidence and consumer spending. “If they remain at pre-pandemic levels, then a soft landing looks increasingly likely, and the Fed should continue to send dovish signals; If not, we could see more volatility,” he said.
”Even in the case of volatility, the solid fundamentals should limit the damage and help set us up for more growth later this year,” he added.
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.02% |
| S&P 500 | -0.09% |
| Dow | -0.43% |
| R2K | -0.41% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.06% to $467.65, and the Invesco QQQ ETF (NASDAQ:QQQ) edged down 0.01% to $396.73, according to Benzinga Pro data.
Upcoming Economic Data:
Two December inflation readings, the results of the New York Federal Reserve’s regional manufacturing survey for January, and the weekly jobless claims data are among the key economic readings scheduled for the week.
On Monday, the New York Federal Reserve will announce the results of its December survey of consumer expectations at 11 a.m. ET. In November, the median inflation expectations declined slightly to 3.4% at the one-year-ahead horizon, the lowest reading of the series since April 2021, but were unchanged at 3% and 2.7% at the three- and five-year-ahead horizons.
The Treasury will auction three- and six-month notes at 11:30 a.m. ET.
Atlanta Fed President Raphael Bostic, a member of the monetary policy-setting committee, is scheduled to make a public appearance at 12 p.m. ET.
The Federal Reserve is due to release its report on outstanding consumer credit for November at 3 p.m. ET. Economists, on average, expect the report to show $9 billion in outstanding consumer credit, up from $5.13 billion in October.
See also: Best Futures Trading Software
Stocks In Focus:
- Boeing shares fell over 8% in premarket trading after the U.S. Federal Aviation Administration sought the grounding of some 737 MAX 9 jets fitted with a panel that blew off an Alaska Air Group, Inc. (NYSE:ALK) jet in midair. While Alaska Air fell over 4%, other airline stocks also moved in sympathy.
- Spirit AeroSystems Holdings, Inc. (NYSE:SPR), a supplier to Boeing, slumped nearly 20% as the company reportedly manufactured and initially installed the fuselage part on the affected jet.
- Biopharma stocks could be in the spotlight as the four-day 2024 JPMorgan Healthcare Conference kicks off Monday.
- Helen of Troy Limited (NASDAQ:HELE) is scheduled to release its fiscal year 2024, third-quarter results before the market open.
Crude oil futures fell 2,90% to $71.67 in the early European session on Monday after rallying 3.02% in the week ending Jan. 5 due to supply concerns amid the developments in the Red Sea.
The benchmark 10-year Treasury yielded 4.042%, little changed from the previous week.
The major Asian markets ended sharply lower, with Hong Kong and Chinese markets leading the slide. On the other hand, the Taiwanese, Malaysian, and Singaporean markets bucked the downtrend and posted modest gains. The Japanese market remained closed due to a public holiday.
European stocks showed lackluster sentiment by late-morning trading on Monday.
The U.S. dollar was firmer against most major currencies in the currency market, although it eased against the Japanese yen.
The cryptocurrency market is seeing mixed sentiment, with the Bitcoin (CRYPTO: BTC) bouncing higher under $45,000 mark, as traders look forward to word from regulators regarding approval for a spot Bitcoin ETF.
Read Next: Nasdaq 100 Snaps Longest Negative Streak In 14 Months As Tech Stocks Find Relief On Mixed Data
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.