S&P 500 futures hold steady as oil slips
U.S. equity futures have approached record highs, but a drop in oil prices and a brief drop in gold and silver prices signaled investor unease over the strength of the economic recovery.
Futures contracts linked to the S&P 500 edged down 0.1% early Monday, indicating a slight pullback after the broad market index hit a record high on Friday. Futures contracts on the Dow Jones Industrial Average fell 0.3%. Futures contracts on the Nasdaq-100 were relatively stable, fluctuating between small gains and losses.
Global benchmark Brent oil fell 3.7% to $ 68.07, putting it on track for its lowest settlement price since May. A Covid-19 outbreak in China has rekindled concerns about another knock on demand from the virus, traders said. Prices were also weighed down by weekend customs data which showed China was importing less crude per day in July than in June, analysts said.
Gold and silver fell briefly on Monday morning before regaining much of the lost ground. Analysts attributed the drop to higher bond yields and a stronger dollar following Friday’s strong US jobs report.
Gold futures fell 0.8% to $ 1,748.70 per troy ounce. Earlier, they fell to $ 1,672.80 per troy ounce, falling 5.1% from Friday’s close. Silver futures fell 7%, but recently fell 1.8%.
Low liquidity during the summer months is likely exacerbating the moves, said Sébastien Galy, macro strategist at Nordea Asset Management. “You get people and organizations that consistently exploit low liquidity to push their positions, it does happen from time to time. Silver is even less liquid than gold.
In bond markets, the yield on the 10-year Treasury bill fell to 1.283% on Monday from 1.288% on Friday, ending a four-day hike.
Bitcoin is up nearly 8% from its 5 p.m. ET level on Friday, trading just below $ 46,000 and reaching the highest level since May.
Profit season is underway, and popular meme title AMC Entertainment is expected to post earnings after markets close. Well-known names like Walt Disney and Airbnb are expected to report later this week.
“It has been a very impressive winning season. The forecast was pretty high and high, but still a lot of companies managed to meet and beat them, ”said Seema Shah, chief strategist at Principal Global Investors. “It is reaffirmed that despite all the concerns about weakening growth, the fundamentals are strong for business.”
In pre-market trading, Berkshire Hathaway was up 1% after reporting higher net profit thanks to growth in its rail, utilities and energy companies over the weekend. The Coinbase cryptocurrency exchange, which is expected to release results on Tuesday, rose more than 4%. Tyson Foods rose 3.5% after reporting an increase in profits and sales, driven by the reopening of restaurants.
American National Group jumped more than 7% after announcing that Brookfield Asset Management would acquire the insurance company for around $ 5 billion. Brookfield edged down 1%.
Sanderson Farms climbed more than 8% after Cargill and Continental Grain confirmed they would buy the chicken farmer for $ 4.5 billion.
Golden Nugget Online Gaming climbed more than 29% after DraftKings said it had reached a deal to acquire it in an all-stock deal.
Oil service companies have slipped. Halliburton lost 2.2%, Schlumberger fell 2.4% and Baker Hughes lost 2%.
Overseas, the pancontinental Stoxx Europe 600 rose 0.1%, holding steady after finishing last week at a record high. A data release showed German exports increased in June and returned to pre-pandemic levels, according to analysis by Dutch bank ING.
Among European stocks, shares of Hargreaves Lansdown fell 11% after the retail platform reported declining pre-tax profit. Food delivery company Deliveroo rose 8% after saying Delivery Hero, a Berlin-based competitor, now owns more than 5% of its issued share capital.
In Asia, most of the major benchmarks rose. The Shanghai Composite Index rose 1.1% and the Hong Kong Hang Seng Index rose 0.4%. Japanese markets were closed for a public holiday.
Investors were awaiting a JOLTS job posting report in June for more information on the labor market, which is due out at 10 a.m. ET.
Write to Anna Hirtenstein at [email protected]
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