Benzinga - Caution returned to Wall Street as indicated by the index futures, which traded narrowly mixed early Monday. The ongoing debt ceiling impasse, the Federal Reserve rate uncertainty, Wednesday's consumer price inflation data and earnings news flow could leave traders on the tenterhooks. Regional banks stocks are solidly higher in premarket, while energy stocks could receive a shot in the arm from the rally in crude oil prices.
Cues From Past Week’s Trading:
The major averages closed the week ended May 5th on a mixed note, with the Nasdaq Composite ending marginally higher, while the S&P 500 Index and the Dow Industrials were in the red for the week.
The mixed performance came despite the stocks advancing notably on Friday following the release of the April non-farm payrolls data and Apple, Inc.’s (NASDAQ: AAPL) better-than-expected second-quarter performance. Friday’s rally helped stocks reverse from four straight sessions of losses.
The negative sentiment that was seen for much of the week came amid an indication from Fed Chair Jerome Powell that the central bank may not be done with its rate hikes yet.
The marginal gains notched by the Nasdaq Composite took the index to its highest level since mid-August.
| Nasdaq Composite | +0.07% | 12,235.41 | |
| S&P 500 Index | -0.80% | 4,136.25 | |
| Dow Industrials | -1.24% | 33,674.38 |
Stocks could be soon inflecting higher, suggested Fundstrat analyst Tom Lee. The Fed is set to pause and the earnings per share results seem to be troughing, he said, adding that this “sounds like a turning point.”
The analyst also highlighted the market’s resilience. Despite calls for “doom,” Fed rate hikes of over 500 basis points, retail liquidation and massive net short increase by institutions, the stock market has been stable in the past 12 months, he said.
Futures Today
| Nasdaq 100 Futures | -0.13% | |
| S&P 500 Futures | +0.09% | |
| Dow Futures | +0.16% | |
| R2K Futures | +0.15% |
Upcoming Economic Data:
The Conference Board’s employment trends index, a cumulative value of eight labor market indicators, is due to be released at 10 a.m. Economists expect the index to come in at 117.37 in April compared to 116.24 in March.
The Commerce Department is scheduled to release its wholesale inventories report for March at 10 a.m. EDT. The consensus estimate calls for a 0.5% month-over-month increase in wholesale sales, slightly faster than the 0.4% increase in February. Wholesale inventories may have increased by 0.1%, the same pace as in the previous month.
The Treasury is set to auction 3-month and 6-month bills at 11 a.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- PacWest Bancorp. (NASDAQ: PACW) shares jumped over 37% in premarket trading after the company reduced its dividend and said its business remains fundamentally solid. Other regional banking peers such as Western Alliance Bancorp. (NYSE: WAL), First Horizon Corp. (NYSE: FHN), East West Bancorp. (NASDAQ: EWBC), Comerica, Inc. (NYSE: CMA) and KeyCorp. (NYSE: KEY) also advanced.
- DISH Network Corp. (NASDAQ: DISH) shares fell over 5.75% following the release of its first-quarter results.
- BioNTech SE (NASDAQ: BNTX) and Tyson Foods, Inc. (NYSE: TSN) are among the companies reporting results before the market open.
- Those reporting after the close include Lucid Group, Inc. (NASDAQ: LCID), Palantir Technologies, Inc. (NYSE: PLTR), PayPal Holdings, Inc. (NASDAQ: PYPL), Skyworks Solutions, Inc. (NASDAQ: SWKS) and Western Digital Corp. (NASDAQ: WDC).
Crude oil futures have carried on the momentum seen in the past week. The WTI-grade crude oil traded 2.21% higher at $72.91 a barrel, adding to their 4.05% gain on Friday. The yield on the benchmark 10-year Treasury note rose 0.016 percentage points to 3.462%.
The Asian markets mostly advanced, encouraged by the buying binge seen on Wall Street on Friday. The Japanese market, which remained closed since Wednesday, played catch-up with the losses seen in the region last week.
European stocks saw volatility in early trading on Monday. Germany’s DAX Index and the French CAC 40 Index were modestly higher in late-morning trading, while the U.K. market was closed for a public holiday. On the economic front, the monthly rate of the German industrial output came in weaker than expected in March, although the annual rate exceeded estimates. The Sentix Index, which measures sentiment among investors in the euro area, fell deeper into negative territory in May.
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