Monday June 26th

26-06-2017

Oil, banks in the spotlight for traders on Wall Street

U.S. stock index futures pointed to a higher open on Monday, as investors watched an uptick in oil prices carefully, while digesting key data. Dow futures climbed 71 points, while S&P and Nasdaq futures rose 7 percent and 28.5 points, respectively. Kicking off the week, durable goods orders fell 1.1 percent, more than the expected 0.6 percent decline. Stock futures pared some of their gains after the data release.The Dallas Fed manufacturing survey is due at 10:30 a.m. ET. In the commodities space, oil prices posted slight gains on Monday, on the back of a weaker dollar, however, glut concerns continued to weigh on sentiment as U.S. drilling activity showed signs of rising. On Monday, U.S. crude hovered around $43.17 at 8:33 a.m. ET, while Brent sat around $45.66. Investors also kept an eye on financials after the Italian government agreed to spend billion to rescue two of the country's banks. European bank stocks rose broadly, with the Stoxx Europe 600/Banks index advancing 1.5 percent. U.S. financials followed their European counterparts higher, with the Financial Select Sector SPDR Fund exchange-traded fund (XLF) advancing 0.25 percent in the premarket. In the central bank sphere, San Francisco Fed President John Williams told an audience in Australia, that the U.S. Federal Reserve needed to keep increasing rates gradually to keep the economy stable, as if the Fed delays too long, the "economy will eventually overheat", according to Reuters. "Gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time," said Williams at a seminar at the University of Technology Sydney.In politics, the U.S. President Donald Trump is set to meet with the Prime Minister of India, Narendra Modi at the White House on Monday, with topics such as fighting terrorism and promoting economic growth expected to be up for discussion. In Europe, bourses were trading higher, while Asia-Pacific markets finished trade on a relatively positive note. Japan's benchmark Nikkei 225 index edged up by 0.1 percent, or 20.68 points, to close at 20,153.35, and South Korea's Kospi rose 0.42 percent, or 10.06 points, to finish the session at 2,388.66. Markets in greater China trended higher. Hong Kong's Hang Seng Index was up by 0.63 percent at 3:00 p.m. HK/SIN. On the mainland, the Shanghai Composite rose 0.89 percent, or 28.1736 points, to close at 3,186.0466, and the Shenzhen Composite surged 1.36 percent, or 25.4577 points, to end at 1,896.7946. Markets in Indonesia, Singapore, Malaysia, India and the Philippines were closed for the end of Ramadan. Gold prices fell one percent to hit their lowest in near six weeks on Monday, amid a stronger dollar and rise in Asian shares, ahead of a flurry of U.S. data due this week. "This sharp depreciation, which lacks any fundamental drivers on a relatively quiet trading day has left investors bewildered," said Lukman Otunuga, research analyst, FXTM. "With the fundamentals out of the picture, price action may be the key culprit behind the decline," he added. Spot gold was down 1.21 percent at $1,241.20 per ounce, touching its lowest since May 17. U.S. gold futures for August delivery slipped 1.15 percent to $1,241.80 per ounce.