Benzinga - by Shanthi Rexaline, Benzinga Editor.
Stock futures point to a modestly lower open on Monday as the indices struggle to find a clear direction following the setback in late July. The rate uncertainty has remained an overhang on the market. Therefore, inflation data and speeches by Federal Reserve officials scheduled for the week could be the major market-moving events. Traders may remain apprehensive about buying stocks, especially ahead of these key catalysts and in the wake of last week’s gains.
Also causing some concerns would be rating agency Moody’s downgrade of the U.S. sovereign rating outlook from stable to negative, citing the growing apprehensions about the nation’s ability to manage its finances in an environment of escalating interest rates and substantial deficits.
Cues From Past Week’s Trading:
Despite Federal Reserve Chair Jerome Powell’s hawkish commentary on Thursday and lackluster reception to the Treasury’s 30-year bond auction, stocks managed to finish the week ended November 10 in the green. The Nasdaq Composite and the S&P 500 ended higher in all but one session of the week, although the declines on Thursday served to snap their longest winning streak since November 2021.
The Nasdaq Composite ended the week at its best level since September 14, and the broader S&P 500 gauge and the Dow Industrials finished at their highest levels since late September.
The week’s optimism reflected hopes that stars are aligning for the Fed to begin reversing its rate hikes, although Powell managed to dent some of the hopes with his comments at the IMF last week.
Small-cap stocks, however, came under intense selling, with the Russell 2,000 Index declining in all but one session of the week. The index is now down 3.18% for the year.
US Index Performance In Week Ended Nov. 10
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +2.37% | 13,798.11 |
| S&P 500 Index | +1.31% | 4,415.24 |
| Dow Industrials | +0.65% | 34,283.10 |
| Russell 2000 | -3.15% | 1,705.32 |
Analyst Color:
Brad McMillan, Chief Investment Officer at Commonwealth Financial Network, is optimistic regarding the resilience of the equity market. “Despite some bouncing around in both rates and the market, there is some resilience to both the economy and markets right now,” he said.
“The ability of the markets to weather bad news—based on the continued growth of the economy—is another sign that while there are real risks out there,” the analyst said. The overall picture is still pretty solid, he added.
Daniel Ives, an analyst at Wedbush, said the tech bull market has begun. “We believe the new tech bull
market has now begun and tech stocks are set up for a strong 2024 as the AI spending tidal wave hits the shores of the broader tech sector,” he said.
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.28% |
| S&P 500 | -0.21% |
| Dow | -0.04% |
| R2K | -0.43% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.19% to $439.76, and the Invesco QQQ ETF (NASDAQ:QQQ) moved down 0.28% to $377.34, according to Benzinga Pro data.
Upcoming Economic Data:
The unfolding week’s economic calendar is fairly loaded with a slew of first-tier economic data lined up for release. The spotlight is likely to be on the twin inflation reports, namely consumer price and producer price inflation reports for October, the October retail sales report, the industrial production report for October, and the results of the November manufacturing surveys of the New York Fed and the Philadelphia Fed.
Traders may also focus on a slew of Fed speeches as they eagerly await any clues hinting at future rate trajectory.
Monday, Fed Governor Lisa Cook is scheduled to speak at 8:50 a.m. ET.
The New York Fed will release a report on consumer price inflation expectations for October at 11 a.m. ET. In September, median inflation expectations increased by 0.1 and 0.2 percentage points at the one- and three-year-ahead horizons to 3.7% and 3.0%, respectively.
The Treasury will auction three- and six-month bills at 11:30 ET.
The monthly federal budget for October is due at 2 p.m. ET.
Stocks In Focus:
- Plug Power Inc. (NASDAQ:PLUG) extended its losses and fell over 5% in premarket trading following the subpar results reported last week and the “going concern” warning.
- Walt Disney Co. (NYSE:DIS) declined about 0.50% after weak box office numbers for its “The Marvels,” a superhero film based on Marvel comics.
- Boeing Co. (NYSE:BA) rose about 3.30% after Bloomberg reported that China is considering resuming purchases of Boeing’s 737 Max aircraft when the US and Chinese presidents meet this week,
- Henry Schein, Inc. (NASDAQ:HSIC), monday.com Ltd. (NASDAQ:MNDY), Tyson Foods, Inc. (NYSE:TSN), and Tower Semiconductor Ltd. (NASDAQ:TSEM) are among the notable companies reporting ahead of the market open.
- Fisker, Inc. (NYSE:FSR) is due to report after the market close.
Crude oil futures edged up 0.21% to $77.33 in early European session on Monday after plunging 4.15% last week.
The benchmark 10-year Treasury note rose 0.006 percentage points to 4.634% on Monday.
Asian stocks ended Monday’s session on a mixed note, with the Hong Kong market advancing notably and the Chinese and South Korean markets clocking modest gains. The Indian, Australian, New Zealand and South Korean markets moved to the downside. Malaysia and Singapore remained closed for a public holiday.
The markets in the region largely ignored Moody’s downgrade of the U.S. rating outlook and remained hopeful of a U.S. Fed pause.
The European markets traded higher in late-morning trading on Monday,
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