Monday May 24th


Dow futures jump more than 100 points to start the week, Nasdaq futures gain

U.S. stock index futures traded higher early Monday after the S&P 500 posted its second negative week in a row the previous week. Futures contracts tied to the Dow Jones Industrial Average implied an opening gain of about 130 points. S&P 500 futures rose 0.5%. Nasdaq-100 futures were up the most, gaining 0.8%. Tech stocks gained in the premarket, shaking off another rough period for bitcoin over the weekend as the cryptocurrency bounced early Monday. The cryptocurrency dropped under $32,000 on Sunday, only to rebound 16% above $38,000 on Monday. On Wednesday, bitcoin prices tumbled to just above $30,000, dropping to the lowest level since late January. Shares of Tesla, a big holder of the crypto, gained 0.5% in premarket trading despite the bitcoin volatility. Coinbase added 2% in premarket trading as bitcoin stabilized Monday and as Goldman started the crypto-exchange with a buy rating. Stocks benefiting from the economic reopening gained in premarket trading as well. Share of Gap, Carnival and United Airlines were higher. Norwegian Cruise Line rose 1% in premarket after the cruise line operator announced plans to return cruising in the U.S. this summer. “We continue to see incremental data points that strengthen our view that when equities break out of this range, the next move is a substantial rise higher,” wrote Tom Lee, head of research at Fundstrat Global Advisors. Lee cited data showing a collapse in Covid-19 cases. Stocks have stalled lately. The previous week saw the Dow post its fourth negative week in five, but the losses were minor. The Dow dipped just 0.5% on the week, while the S&P lost just 0.4%. The Nasdaq Composite, meanwhile, gained 0.31% last week, snapping a four-week losing streak. Despite last week’s “collapse in crypto markets and rather hawkish FOMC minutes, another equity dip was bought by investors,” JPMorgan wrote in a note to clients. “This ‘buy the dip’ mentality has been remarkably strong this year and has provided a support preventing any small correction in equities and risk markets from becoming more extended,” the firm added. The Federal Reserve hinted at its April meeting that easy monetary policies could be reconsidered if the economy continues to show signs of rapid improvement, according to minutes from the meeting released last week. Looking ahead, there are a number of retail companies set to report quarterly earnings in the coming week, including Nordstrom, Urban Outfitters, Gap and Ulta. Several technology companies will also release quarterly updates, including Nvidia, Snowflake, Workday and Salesforce. On the economic data front, consumer confidence and new home sales data will be released on Tuesday. Heading into the last full trading week of the month, the Dow is on track to post a gain for May, while the S&P is on track to snap a three-month winning streak. The Nasdaq Composite, which is down more than 3% for the month, is on track to snap its longest monthly winning streak since Jan. 2018, with its first negative month in seven. After outperforming year-to-date, small caps have faced recent weakness, and the Russell 2000 is on track to snap a seven-month winning streak. “We think the choppy/sideways trend will continue for a bit longer, and the market will experience sell-off scares along the way,” noted Adam Crisafulli, founder of Vital Knowledge. “While stocks are absorbing a lot of changes well so far, all the inflection points still have longer to play out.” Asia-Pacific markets traded mostly higher Monday but investors remained cautious over a resurgence in Covid-19 cases in some parts of the region as well as potential inflation pressures in the U.S. In Japan, the Nikkei 225 rose 0.17% to 28,364.61, trimming some of its earlier gains. The Topix index added 0.44% to 1,913.04. Singapore’s Straits Times Index rose 0.2% in afternoon trade while India’s Nifty 50 and Sensex added 0.23% and 0.26%, respectively. The Malaysian benchmark index was up about 0.53% while Taiwan’s Taiex rose 0.22% to 16,338.29. Chinese mainland shares reversed earlier losses: The Shanghai composite rose 0.31% to 3,497.28 while the Shenzhen component added 0.62% to 14,506.61. In South Korea, Kospi index fell 0.38% to 3,144.30 and Hong Kong’s Hang Seng index was down 0.26% as of the final hour of trading. Oil prices rose on Monday as a potential snag emerged in reviving the 2015 Iran nuclear deal that could add more oil supply, while Goldman Sachs said the case for higher prices remains intact even with increased Iran exports. Brent crude oil futures for July rose 72 cents, or 1.1%, to $67.16 a barrel by 0651 GMT, while U.S. West Texas Intermediate for July was at $64.25 a barrel, up 67 cents, or 1.1%. Gold steadied on Monday, consolidating near a 4-1/2-month peak, buoyed by a subdued dollar and a selloff in cryptocurrencies, while investors awaited key economic data releases this week. Spot gold was little changed at $1,881.40 per ounce by 1021 GMT. Last week, gold prices hit their highest level since Jan. 8 at $1,889.75. U.S. gold futures rose 0.3% to $1,882.10.