Monday November 14th

U.S. stock markets index futures traded lower Monday after the S&P 500 posted its biggest weekly gain in almost five months on the back of easing inflation data. Dow Jones Industrial Average futures fell 49 points, or 0.2%. S&P 500 futures declined 0.3%, and Nasdaq 100 futures slid by 0.5%. The S&P 500 rallied 5.9% last week for its best week since June. Investors cheered a lighter-than-expected inflation reading, betting that the Federal Reserve would soon slow its aggressive tightening campaign. “A notable shift has occurred in the market, with investors increasingly risk-on across asset classes,” said Mark Hackett, Nationwide’s chief of investment research. “Technical indicators have improved dramatically, with investor sentiment, momentum, breadth, and risk factors all showing notable improvement.” The tech-heavy Nasdaq Composite gained 8.1% last week for its best week since March, while the blue-chip Dow advanced 4.2%. The Cboe Volatility Index, known as Wall Street’s fear gauge or the VIX, fell 1 point to 22.5, hitting the lowest level since August. The VIX, which tracks the 30-day implied volatility of the S&P 500, had traded above the 30 point threshold for most of October. Still, the Federal Reserve has given little signal that it could deviate from its tightening path anytime soon. Fed Governor Christopher Waller said Sunday that, “We’re at a point we can start thinking maybe of going to a slower pace.” But, “we’re not softening. ... Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there.” Investors also digested news on the politics front over the weekend. Democrats will keep control of the Senate in the 2022 midterm elections, NBC News projected. The party will hold at least 50 seats after Sens. Mark Kelly of Arizona and Catherine Cortez Masto of Nevada held off challenges. Meanwhile, the third-quarter earnings season is set to continue, with a heavy emphasis on retail. Big retailers Walmart, Home Depot, Target, Lowe’s, Macy’s and Kohl’s are all slated to post numbers this week. Hong Kong stocks led gains in a mixed Asia-Pacific session as Japan’s benchmark index was dragged lower by tech giant SoftBank Group. The Hang Seng index in Hong Kong rose 1.71% in its final hour of trade, mostly boosted by property stocks. In mainland China, the Shanghai Composite pared previous gains and lost 0.13%. The Shenzhen Component also lost 0.236%. Japan’s Nikkei 225 fell 1.06%, as heavyweight SoftBank plunged as much as 14% after its Vision Fund reported further losses, to close the session at 27,963.47 — the Topix fell 1.05% to close at 1,956.90. The S&P/ASX 200 in Australia lost 0.16% to end its session at 7,146.3 and South Korea’s Kospi lost 0.34% to close at 2,474.65. Oil prices pared earlier gains and fell on Monday, dragged down by a firmer U.S. dollar and record high coronavirus cases in major Chinese cities that dashed hopes of the reopening of the economy of the world’s biggest crude importer. Contracts for Brent crude and U.S. West Texas Intermediate had edged up nearly 1% earlier in the session but later reversed their trajectory and headed lower. Brent crude futures were down $1.04, or 1.07%, to $94.96 a barrel after settling up 1.1% on Friday while WTI crude futures fell $1.11, or 1.25%, to $87.84 a barrel after closing Friday’s session 2.9% higher. Gold fell 1% on Monday pressured by a firmer U.S. dollar, after Federal Reserve Governor Christopher Waller warned markets that the central bank was not softening its fight against inflation. Spot gold was last down 0.8% at $1,756.89 per ounce, as of 1100 GMT. U.S. gold futures dropped 0.6% to $1,759.60. Bullion had posted its best weekly gain since March 2020 last week on hopes of slower rate hikes after data showed price pressure cooling in the United States.