Benzinga - by Shanthi Rexaline, Benzinga Editor.
Index futures suggest a stock market rebound on Monday after a lackluster holiday-shortened week. Bargain hunting and strength in Tesla Inc (NASDAQ:TSLA) and Apple Inc (NASDAQ:AAPL) may drive buying interest. However, a possible UAW strike and caution ahead of August inflation data could temper sentiment. Oracle Corp. (NYSE:ORCL) earnings, treasury yields, and oil prices will be in focus.
Cues From Last Week
Last week, stocks reversed course, ending with weekly losses due to inflation concerns triggered by oil price spikes. Economic data, including service sector survey prices, jobless claims, and Q2 productivity, worsened inflation worries. China’s iPhone ban expansion and Huawei’s new phone hit tech stocks, erasing $190 billion from Apple’s valuation. Negative sentiment spread across the tech sector.
US Index Performance In Week Ended Sept. 8
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -1.93% | 13,761.53 |
| S&P 500 Index | -1.29% | 4,457.49 |
| Dow Industrials | -0.75% | 34,576.59 |
| Russell 2,000 Index | -3.61% | 1,851.54 |
Analyst Color:
The stock market could get past the fourth quarter without too much further damage, said fund manager Louis Navellier. “With weakness continuing in China, and Europe appearing headed for a recession, the U.S. should continue to see investment flows coming our way, and help us get to the fourth quarter without too much further damage,” he said.
Expectations are almost a consensus that the Fed will skip an increase on September 20, the analyst said. Also, recession fears continue to ebb and earnings estimates remain firm or are inching higher, he added.
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.55% |
| S&P 500 | +0.38% |
| Dow | +0.18% |
| R2K | +0.51% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.35% to $447.10 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.50% to $374.45, according to Benzinga Pro data.
Upcoming Economic Data:
The week’s economic calendar is back-end loaded, with some key numbers having implications for the Fed funds rate due.
Wednesday’s consumer price inflation report for August is expected to show a pickup in the monthly and annual rates of inflation, thanks to a spike in oil prices. The annual core rate is expected to see a further slowdown.
The weekly jobless claims report and the August producer price inflation report, both due on Thursday, the results of the September Empire State manufacturing survey, the University of Michigan’s preliminary consumer sentiment index for September, and the Federal Reserve’s August industrials production report could also move the needle on the market.
Monday, the New York Federal Reserve’s consumer inflation expectations reading for August is due at 11 a.m. EDT. In July, median inflation expectations declined across all three horizons, falling to 3.5 percent at the short-term horizon and to 2.9 percent at the medium- and long-term horizons.
The Treasury will auction three- and six-month bills at 11:30 a.m. EDT and three-year notes at 1 p.m. EDT.
See also: Best Futures Trading Software
Stocks In Focus:
Tesla stock rallied 5.69% in premarket trading following a positive price target rerating by Morgan Stanley’s Adam Jonas.
Apple climbed about 0.75% ahead of Tuesday’s iPhone launch event.
FuelCell Energy, Inc. (NASDAQ:FCEL) is due to report its quarterly results ahead of the market opening.
Those reporting after the close include Oracle and Casey’s General Stores, Inc. (NASDAQ:CASY).
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures fell 0.56% to $87.02 in early European session on Monday after advancing 2.3% in the week ended Sept. 8.
The benchmark 10-year Treasury note rose 0.038 percentage points to 4.294% on Monday.
Asian stocks had a mixed outing on Monday, with the Japanese, Hong Kong, New Zealand and Taiwanese markets pulling back, while most other major markets advanced. The Chinese indices advanced strongly, encouraged by fairly in-line data on M2 money stock and outstanding loan growth.
Caution remained the undercurrent as traders await the U.S. inflation data due by midweek.
European stocks were higher by late-morning trading on Monday, with the STOXX 600 Index, a stock index of European stocks, rising 0.40% to 456.48.
Read Next: ‘Potential Nightmare’: Ford, GM Thrust In Difficult Situation That Could Benefit Tesla, Says Analyst
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