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The Monday Market Minute

  • Global stocks drift lower as major markets remain closed for Easter observances.
  • Oil prices test six month highs amid reports that U.S. waivers on the purchase of Iranian crude will be lifted next week.
  • China stocks slide despite government reiteration of policy support.
  • Q1 earnings season hits high gear with 155 companies, representing $9 trillion in market value, reporting this week.
  • U.S. stocks set to open modestly lower ahead of earnings from Haliburton, Whirlpool and Kimberl- Clark with manufacturing PMI data for March and existing home sales figure for the month of April following after the opening bell.

Market Snapshot

Global stocks drifted lower Monday, as major markets in Europe and Asia remained closed for Easter celebrations, while oil prices tested six months highs amid reports that the U.S. will end waivers for the purchase of Iranian crude next week.

The U.S. imposed sanctions on the purchase of Iranian crude in November of last year, but granted waivers to eight different nations that would allow them to continue importing oil from Tehran for a further six months. Those waivers, which expire on May 2, are unlikely to be extended, according to multiple media reports, sending global crude prices nearly 3% higher on the session and close to the highest in at least six months.

Brent crude contracts for June delivery, the global benchmark for oil prices, were marked $1.70 higher from their Friday close in New York and changing hands at $73.67 per barrel while WTI contracts for the same month were seen $1.43  higher at $65.50 per barrel.

Stocks, however, remained muted as European markets stayed closed and bourses trading in Asia booked modest losses, led by sharp single-day pullbacks in China. Japan's Nikkei 225 was little-changed on the session at 22,217.90 points. 

Early indications from U.S. equity futures suggest modest decline on Wall Street, as well, with contracts tied to the Dow Jones Industrial Average indicating a 52 point decline and those linked to the S&P 500 guiding to a 6.2 point slip for the broader benchmark. Nasdaq Composite futures suggest a 22 point opening bell decline.

Corporate earnings will once again dominate the trading session, both today and for the remainder of the week, as the first quarter reporting season kicks into high gear with 155 companies -- representing around $9 trillion in market value -- set to update on performance and near-term forecasts. 

Of the 77 companies reporting so far, nearly 78% have beaten earnings expectations, according to data from Refinitiv, while around 48.1% have topped revenue estimates. The overall pace suggests collective first quarter earnings for the S&P 500 will shrink by 1.7% from the same period last year to $309.9 billion on a share-weighted basis.

"With the S&P 500 forward PE (Price to Earnings) ratio sitting near highs of 16.8 and the Index 1.2% below its historic record, investors need convincing results to keep buying equities at their current levels," said FXTM's chief market strategist Hussein Sayed. "The Federal Reserve has limits on what it can do to tighten monetary policy, and loosening policy may not happen unless we see serious signs of declining inflation, which is not the case at the moment. That's why a disappointment in results this week may lead to a sharp correction in equity prices."

Halliburton Company (HAL - Get Report)  were marked 3.5% higher in pre-market trading after the oil services group posted stronger-than-expected first quarter revenues Monday as a surge in global oil prices helped boost international drilling activity and offset rising costs in North America.

Kimberly-Clark (KMB - Get Report) and Whirlpool (WHR - Get Report) are also slated to report today, with earnings from eBay  (EBAY - Get Report) , Verizon (VZ - Get Report) , Procter & Gamble (PG - Get Report) , Harley Davidson (HOG - Get Report) and Coca-Cola (KO - Get Report) on Tuesday.

Later this week, Dow components Microsoft (MSFT - Get Report) and Exxon Mobil (XOM - Get Report) , as well as FANG stalwarts Facebook (FB - Get Report) and Amazon, will also provide previous quarter earnings and current quarter forecasts.

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