The Friday Market Minute
- Global stocks muted heading into the August holidays, with investors keying on the resumption of stimulus talks in Washington.
- House Speaker Nancy Pelosi said she is willing to resume negotiations following Friday's collapse, but dismissed a series of Executive Orders from President Donald Trump, partly aimed at extending unemployment benefits, as "illusions".
- Industrial data from China signals a broader recovery for the world's second-largest economy, lifting global crude prices in overnight trading.
- Gold retreats from last week's all-time highs as the dollar bumps higher, while Treasury bond yields hold steady amid the Congressional deadlock.
- U.S. equity futures suggest a modestly firmer open on Wall Street ahead of a light earnings and economic data calendar this week highlighted by inflation data on Thursday and industrial production figures on Friday.
U.S. equity futures edged higher Monday, while oil prices rallied and the dollar held firm against its global peers, as markets looked to signals of a re-start on stimulus talks in Washington heading into what could be a tepid week on Wall Street.
House Speaker Nancy Pelosi said Sunday that she is willing to resume negotiations with her Republican counterparts this week, following the collapse of talks on Friday, and hinted at changes in her party's $3.4 trillion proposal that could bring it more in line with what has been put forward by Treasury Secretary Steven Mnuchin.
"Right now, we need to come to agreement," Pelosi said. "We could talk about how long our provisions would be in effect, so we can take things down -- instead of the end of September of next year, a shorter period of time -- and we'll revisit all of it next year anyway."
She also dismissed a series of Executive Orders from President Donald Trump over the weekend, promoted as measures to boost unemployment benefits and defer payroll tax deadlines, as 'illusions'.
Trump's Orders, signed on Saturday, could potentially shift money already collected by the Treasury, but lack the power to raise new revenues. They are also likely to face several legal challenges in the coming weeks if Congress isn't able to reach an agreement on its twin relief packages.
With investors looking to lawmakers to add much-needed billions to the stalling U.S. economy (the unemployment benefits alone amount to $18 billion a week in extra support) and the bulk of the second quarter earnings season behind us, Wall Street looks set for a muted open Monday, with futures contracts indicating little change for the three major benchmarks heading into the peak of the summer holiday season.
The Dow Jones Industrial Average, which has gained 3.8% so far this year, is priced for a 92 point gain while the S&P 500, which is up 3.7% for the year, is set to open 4 points higher from its Friday closing level of 3,651.28 points.
Twitter shares were a notable pre-market mover, rising 5.5% following a report from the Wall Street Journal that it's emerged as a rival to Microsoft (MSFT) - Get Report in the race to purchase TikTok, the video-sharing app, from its China-based owner ByteDance
Just 12 S&P 500 companies are scheduled to report second quarter earnings this week -- including Macy's (M) - Get Report, Applied Materials (AMAT) - Get Report and Nordstrom (JWN) - Get Report -- as the season draws to a close. With some 441 companies reporting, collective S&P 500 earnings are expected to fall 31.7% from last year, to $228.7 billion, with a 10.5% decline in overall revenues.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.14% higher in overnight trading at $93.574, pushing gold prices into retreat following last week's record-setting run that saw bullion trade at an all-time peak of $2,075 per ounce.
Global oil prices, however, traded higher in the overnight session following stronger-than-expected industrial data from China, which added to signals of a broader recovery for the world's largest energy market, and a bullish second-half outlook for crude from Saudi Aramco, which reported dismal second quarter earnings on Saturday.
WTI contracts for September delivery, the U.S. benchmark, 66 cents higher from their Friday close in New York and were changing hands at $41.80 per barrel in early European dealing while Brent contracts for October, the new global benchmark, were seen 48 cents higher at $44.88 per barrel.
European stocks were 0.47% higher in early Monday trading, while gains for BP plc and Royal Dutch Shell helped boost London's FTSE 100 by around 0.53%. Markets in Asia were equally uninspired heading into the August holidays, with Japan's Nikkei 225 closed and the region-wide MSCI ex-Japan benchmark last seen 0.05% heading into the final hours of trading.