The mood at the start of the trading week appears to be subdued, with the index futures pointing to a narrowly mixed opening on Monday. The week has a back-end-loaded economic calendar with some market-moving economic data in the pipeline, with the inflation data chief among them.
Cues From Past Week’s Trading:
Stocks showed a lack of a clear direction in the holiday-shortened week that ended April 6, as they swayed to each incoming piece of economic evidence. Data suggesting slower growth were met with concerns by Street, resulting in a sell-off in equities. That said, the 30-stock Dow Industrials stayed afloat, thanks to oil’s rally that lifted heavily-weighted energy stocks that are part of this blue-chip average.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | -1.10% | 12,087.96 | |
| S&P 500 Index | -0.10% | 4,105.02 | |
| Dow Industrials | +0.64% | 33,485.29 |
Analyst Color:
The argument for a pause in rate hikes in building, said Charlie Replie, senior investment strategist at Allianz Investment Management, following the release of the March non-farm payrolls data.
The analyst noted that headline payroll numbers came largely in line with expectations. The gains were mostly in the leisure and hospitality sector, while the manufacturing and construction jobs contracted.
The data in isolation may not do much for the Fed to sway in either direction, the analyst said. A pause is on the table, given the recent job openings data and weaker survey-based data, he added.
Carson Group’s Ryan Detrick pointed out the triggering of the Zweig Breadth Thrust in a recent tweet. ZBT is a technical indicator used to ascertain market momentum and is derived by calculating the number of advancing issues on an exchange, divided by the total number of issues on it, and generating a 10-day moving average of the percent.
“It has only happened 14 other times since 1950 and the S&P 500 was higher a year later. every. single. time.,” he said. The average gain after a year is around 23%, he noted.
The extremely rare Zweig Breadth Thrust just triggered.
It has only happened 14 other times since 1950 and the S&P 500 was higher a year later. every. single. time.
Up more than 23% on average a year later as well.
🎯🐂 pic.twitter.com/vnFeCRpgVD
— Ryan Detrick, CMT (@RyanDetrick) April 9, 2023
Futures Today
| Index | Performance (+/-) | |
|---|---|---|
| Nasdaq 100 Futures | -0.11% | |
| S&P 500 Futures | +0.03% | |
| Dow Futures | +0.08% | |
| R2K Futures | +0.59% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.05% to $409.39, while the Invesco QQQ Trust (NASDAQ:QQQ) moved down 0.06% to $317.87, according to Benzinga Pro data.
Upcoming Economic Data:
The Commerce Department is scheduled to release its wholesale inventories and sales data for February at 10 a.m. EDT. Economists, on average, expect wholesale inventories to rise 0.2% month-over-month following a 0.3% drawdown in January. Wholesale sales may have decelerated to a 0.5% month-over-month pace from 0.9% growth in January.
The Treasury is set to auction three and six-month bills at 11:30 a.m. EDT.
New York Federal Reserve President John Williams, who also happens to be a member of the policy-setting arm of the central bank, is due to speak at 4:15 p.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- Pioneer Natural Resources Company (NYSE:PXD) rose over 6% in premarket trading following reports of Exxon Mobil Corp.’s (NYSE:XOM) interest in the shale driller.
- First Republic Bank (NYSE:FRC) was slipping over 1.5% after the regional bank announced it would suspend dividend payments on its preferred shares.
- Capital One Financial Corp. (NYSE:COF) moved down about 3% after Walmart, Inc. (NYSE:WMT) filed a case against the former for not meeting certain terms of their credit card partnership. The retail giant also threatened to terminate the contract.
- Micron Technology, Inc. (NASDAQ:MU) climbed despite the ongoing worries concerning the clampdown by Chinese regulators.
- Integrated cannabis company Tilray Brands, Inc. (NASDAQ:TLRY) is scheduled to report third-quarter results after the close of trading.
Top Analysts’ Call
- Block, Inc. (NYSE:SQ): Keefe, Bruyette & Woods downgrades from Outperform to Market Perform and reduces price target from $90 to $75
- NetApp, Inc. (NASDAQ:NTAP): Stifel upgrades from Hold to Buy with a $75 price target.
- Bed & Body Works, Inc. (NYSE:BBWI): Raymond James downgrades from Strong Buy to Outperform and lowers price target from $50 to $48
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures carried forward the momentum from last week and held above the $80 psychological resistance. A barrel of WTI-grade light-sweet crude oil fetched $80.90, up 0.25%.
The yield on the benchmark 10-year U.S. Treasury note was flat at 3.383%.
Sentiment remained muted in the Asian markets on Monday, with the Japanese and South Korean markets racking up decent gains. The Australian, New Zealand and Hong Kong markets were closed for the Boxing Day holiday.
Most European markets also remained closed in observance of the Boxing Day holiday.
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