Monday August 1st

U.S. stock index futures fell Monday following the market’s best month since 2020 as investors look ahead to another week of key earnings reports and economic data. Dow Jones Industrial Average futures traded down 49 points, or 0.15%. S&P 500 futures shed around 0.27% and Nasdaq 100 futures were 0.17% lower. Technology shares such as Apple, Microsoft and Alphabet were lower, leading the broader market down. On Friday, all major indexes gained, posting winning weeks and capping off the best month of the year so far and then some. The Dow gained 6.7% in July, while the S&P 500 added 9.1%. The Nasdaq Composite rose 12.4% as investors rushed into the tech stocks beaten up the most during this bear market. For each index, July’s performances were the best since 2020. “We are seeing a relief rally in the stock market, as pessimism reached extreme levels, and as longer-term interest rates have been coming back down,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “We believe the rally will last until later in the summer, but as stock prices rebound and it becomes increasingly clear that we are headed for a more typical recession (e.g. one with higher unemployment and nominal GDP dropping close to zero or negative), markets will again have another selloff,” he added. “But until that time, enjoy the rally as it’s likely catching a lot of people off guard.” This week, investors have more economic data and company earnings to digest. On Monday, companies such as Activision Blizzard, Devon Energy, Loews and more report earnings. Later in the week Uber, Caterpillar, Starbucks, Eli Lilly, Amgen and others also have scheduled reports. In addition, the Friday nonfarm payrolls report from the Bureau of Labor Statistics will give more insight into the strong labor market. So far this year, the solid growth of jobs has prompted economists to say the U.S. is currently not in a recession, even with two consecutive quarters of negative GDP. Mainland China stocks rose along with most other Asia-Pacific indexes on Monday as a private survey on Chinese factory activity showed slight growth. HSBC shares popped after it released its interim results for the second quarter of 2022. Mainland China markets gained. The Shanghai Composite was 0.21% higher to close at 3,259.96 and the Shenzhen Component advanced 1.198% to 12,413.87. Hong Kong’s Hang Seng index pared earlier losses and rose fractionally to close at 20,165.84 as shares of tech giant Alibaba lost 3.76%. The stock fell more than 5% earlier in the session. Japan’s Nikkei 225 gained 0.69% to close at 27,993.35 and the Topix index advanced 1.02% to 1,960.11. In Australia, the S&P/ASX 200 was 0.69% higher at 6,993. The Kospi in South Korea was mildly higher at 2,452.25 and the Kosdaq gained 0.5% to 807.61. Oil prices dropped on Monday as weak manufacturing data from China and Japan weighed on the demand outlook while investors braced for this week’s meeting of officials from OPEC and other top crude producers on supply adjustments. Brent crude futures were down $1.39 at $102.61 per barrel. U.S. West Texas Intermediate crude was down $1.73, or 1.75%, at $96.89 per barrel. Gold climbed Monday, buoyed by a softer dollar, while investors strapped in for more economic readings that could determine the future pace of interest rate hikes. Spot gold gained 0.5% to $1,773.29 per ounce. U.S. gold futures also rose 0.5% to at $1,790. The dollar slipped, making gold less expensive for overseas investors. But higher U.S. 10-year Treasury yields kept a tight leash on non-yielding bullion’s gains.