Stock Market News
U.S. futures were flat on Monday, as investors look ahead to earnings reports and central bank meetings this week.
The S&P 500 futures fell over one point or 0.06% to 2,815.75 as of 6:50 AM ET (10:50 GMT) while Dow futures inched up 11 points or 0.04% to 25,425.0. Meanwhile tech heavy Nasdaq 100 futures decreased 12 points or 0.17% to 7,289.0.
The Federal Open Market Committee (FOMC) meets on Tuesday and Wednesday, with a policy decision scheduled for Wednesday afternoon. Meanwhile the Bank of Japan ends its two-day meeting on Tuesday and the Bank of England is expected to make a policy decision on Thursday.
Earnings season continues in the last major week of corporate results, with Caterpillar (NYSE:CAT), AK Steel Holding Corporation (NYSE:AKS), Samsung Electronics (KS:005930) and others expected to report their financial results on Monday.
Waste manager Avalon Holdings Corporation (NYSE:AWX) was among the top gainers in pre-market trading, surging 95.122% while Fiat Chrysler Automobiles NV (NYSE:FCAU) gained 0.65% and Twitter Inc (NYSE:TWTR) rose 0.23%. AT&T (NYSE:T) was up 0.97% and semiconductor Tower International Inc (NYSE:TOWR) increased 1.285%.
Elsewhere Tesla (NASDAQ:TSLA) fell 0.68% while Microsoft (NASDAQ:MSFT) inched down 0.19% and social media app Snap Inc (NYSE:SNAP) slumped 1.40% and Cisco was down 0.49%.
On the data front, pending home sales is out at 10:00 AM ET (14:00 GMT), with the Dallas Fed’s manufacturing survey out at 10:30 AM ET (14:30 GMT).
In Europe stocks were down. Germany’s DAX fell 22 points or 0.18% while in France the CAC 40 decreased 15 points points or 0.28% and in London, the FTSE 100 was down 20 points or 0.27%. Meanwhile the pan-European Euro Stoxx 50 lost 13 points or 0.38% while Spain’s IBEX 35 inched down 32 points or 0.33%.
Gold futures fell 0.20% to $1,220.50 a troy ounce while crude oil futures surged 1.31% to $69.59 a barrel. The U.S. dollar index which measures the greenback against a basket of six major currencies, was down 0.17% to 94.31.
Testing times for tech. Asset managers’ concerns have been increasing about the outlook for the group of big US tech stocks such as Facebook, Amazon and Google parent Alphabet. The $120bn plunge in the value of Facebook last week sent a shockwave across US and European funds. Even so, Wall Street’s nine-year rally remains on firm footing to continue — many of the earnings disappointments are seen as isolated.
Next up: Apple. Staying with tech, the next big test for the sector comes on Tuesday when Apple reports its quarterly earnings. The iPhone maker’s “other products” division — which includes Apple Watch, AirPods earphones and HomePod speaker — will be a highlight. That’s because these accessories are now at risk of being caught up in the US-China trade war.
Economic Indicators News
Euro zone economic sentiment edges lower in July. Euro zone economic sentiment edged lower in July, pulled down by less optimism in industry and the retail sectors, despite a better mood in services, a monthly survey by the European Commission showed on Monday.
The Commission survey showed the economic sentiment indictor for the 19 countries sharing the euro currency eased to 112.1 points in July form 112.3 in June, continuing a downward trend started since a peak of 115.2 last December.
Separately, the Commission’s business climate indictor, which helps identify the phase of the business cycle, fell to 1.29 in July from 1.38 in June, following a similar downward path as economic sentiment since a peak of 1.63 in January.
The easing of sentiment in July was mainly due to a fall in the indicator for industry which decreased to 5.8 from 6.9, because managers were more pessimistic on production expectations, the current level of overall order books and stocks of finished products.
The survey suggested trade tensions between the European Union and the United States, that resulted in the U.S. imposing tariffs on European steel and aluminum exports in June as well as the threat of more tariffs on EU cars, had an effect.
“Managers’ assessment of past production improved while their views on export order books worsened,” the survey said.
Sentiment in services, which generate more than two thirds of euro zone gross domestic product, improved to 15.3 from 14.4 in June, while consumer sentiment held stable at -0.6 points — still high above the long-term average of -12.2.
The mood in the retail sector fell sharply to -0.1 from 0.7 as managers worried over the expected business situation and the adequacy of the volume of stocks.
Consumer inflation expectations over the next 12 months rose to 18.0, close to the long-term average of 18.6. Selling price expectations in industry fell to 9.7 in July from 10.1 in June.
Commodities & Futures News
Oil prices edge higher but trade row caps gains. Oil rose on Monday as investors remained cautious over the supply outlook, although the fallout from global trade tensions limited price gains.
October Brent crude futures were last up 36 cents at $75.12 a barrel by 0902 GMT. The September contract expires on Tuesday. U.S. crude futures were up 78 cents at $69.47 a barrel.
The oil price has been rallying almost uninterruptedly for the past two weeks, in part as trade tensions between the United States and China have heated up, but also as looming sanctions on Iran have already started to curtail flows of oil from the country.
“There are a myriad of factors to follow at the moment in the oil market but one way or the other we always arrive at the same conclusion. It is the impact of the U.S. sanctions on Iran that will decide the next $15 a barrel,” PVM Oil Associates Tamas Varga said in a note.
“The best case scenario is that the U.S. provides meaningful sanction waivers in the run-up to the mid-term elections and Iran can get away with a loss of around 500-700,000 barrels per day of exports. In case, however, President Trump plays hardball and puts its allies and foes under maximum pressure the loss of barrels could amount to 2 million barrels per day.”
The U.S. economy grew at its fastest pace in nearly four years in the second quarter, but with Washington and Beijing at loggerheads over trade, oil prices could struggle this week, analysts said.
“Oil prices could struggle this week,” said Stephen Innes, head of trading APAC at OANDA Brokerage.
“Concerns around the U.S.-China trade wars continue to weigh on prices, while the halt in Saudi shipments through the Red Sea waterway has seemingly failed to provide a bullish fillip,” he said.
Saudi Arabia last week said it was suspending oil shipments through the Red Sea’s Bab al-Mandeb strait, one of the world’s most important tanker routes, after Yemen’s Iran-aligned Houthis attacked two ships in the waterway.
U.S. energy companies added three oil rigs in the week to July 27, the first time in the past three weeks that drillers have increased activity, data released on Friday that showed.