U.S. equity futures slipped into negative territory Monday, while gains for European stocks eased, as investors held back from extending the recent global market rally following the best start to a new year in more than a decade.
Contracts tied to the Dow Jones Industrial Average were marked 21 points, or 0.08%, to the downside while those tied to the S&P 500 were edged 5.25 points, or 0.19% lower than Friday's close. The moves pared gains from earlier in the pre-market session that suggested another run at record highs on Wall Street Monday after the best first week of a new trading year since 1999, which saw the Dow rise 2.3%, the broader S&P 500 add 2.6% and the tech-focused Nasdaq surge 3.4% as all three benchmark notched multiple sets of historic peaks.
The U.S. dollar index, which benchmarks the greenback against a basket of six global currencies gained 0.39% from Friday to change hands at 92.32 as benchmark Treasury bond yields rose and investors returned to fully pricing-in three 2018 rate hikes from the U.S. Federal Reserve.
Caterpillar Inc. (CAT) - Get Report shares were an active early mover and could open at a record high after a solid upgrade for the construction equipment maker from JPMorgan & Co. (JPM) - Get Report following last year's Republican-led tax cuts.
Caterpillar shares closed at $161.96 each on Monday after rising 1.58% on the session, extending its three-month gain to more than 25.7%, more than double the advance of the Dow Jones Industrial Average over the same period. Early indications from pre-market trading suggest the stock could open at an all-time high of $164.26, a 1.42% advance from Friday's close.
Nvidia Corp. (NVDA) - Get Report were also active and could open at a fresh record high Monday after the chipmaker added Volkswagen AG (VLKAY) and Uber Technologies Inc. to its growing list of carmaking partnerships keen on using its artificial intelligence technology.
Nvidia shares rose 2.58% in premarket trading Monday, indicating a record opening bell price of $220.96 each. The moves could take Nvidia's three-month gain past 22% and its 52-week advance over 105%.
The U.S. corporate earnings season will kick off this week with analysts expecting a 10% boost in company's bottom lines over the three months ending in December, with near-term forecasts potentially boosted by the Trump Administration's $1.5 trillion tax reform passage late last year.
Bank of America (BAC) - Get Report gets things started with fourth quarter figures on Thursday, followed by Friday numbers from rivals JPMorgan & Co. (JPM) - Get Report PNC Financial Services Group Inc. (PNC) - Get Report and Well Fargo & Co. (WFC) - Get Report
In Europe, the Stoxx 600 index jumped 0.22% by mid-day and was quoted at a 52-week high of 398.24 points. A breach through the 400 level would take the region's broadest benchmark to levels last seen in July 2015. Germany's DAX performance index, which represents some of Europe's most valuable companies in its biggest economy, was marked 0.24% higher at 13,350.55 points, just a couple of hundred points shy of its all-time high.
Deutsche Bank AG (DB) - Get Report shares extended declines to a two-month low following the bank's late-Friday warning that it will post its third consecutive full year loss, heaping further pressure on CEO John Cryan.
Shares in Germany's biggest lender were marked 1.1% in the opening 90 minutes of trading in Frankfurt, taking their two-day decline past 6% to change hands at a two-month low of €15.30.
The stock has sharply under-performed the Stoxx Europe Banks benchmark since the subindex Tstarted its 7-week rally in mid-November off the back of hawkish signals from the European central bank, falling 2.5% against a 5.6% gain.
In Britain, the FTSE 100 fell 0.014% in the opening hours of trading, held down by weaker consumer and retail stocks as well as some softness in the commodities sector.
Overnight in Asia, stocks once again tested all-time highs, with the MSCI Asia ex-Japan index rising 0.33% to 589.16 points, just 5.31 points from its 2007 peak, thanks to a 0.6% gain for the South Korean KOPSI and a 0.2% rise for the Hang Seng index in Hong Kong. Japan's Nikkei 225 was closed owing to the country's 'Coming-of-Age Day' holiday.
Global oil markets edge higher in overnight trade as investors continued to re-price commodities in advance of solid growth in energy-hungry economies such as China and Germany as well as a modest decline in the number of U.S. drilling installations reported last week by Houston-based oil services provider Baker Hughes.
Brent crude futures for March delivery were marked a few cents lower than their Friday close at $67.54 per barrel while West Texas Intermediate crude contracts for the same month, which are more closely tied with U.S. gas prices, were seen 10 cents higher at $61.55 per barrel.