Market Snapshot: Dow futures retreat to start week after stock market’s best session in months

This post was originally published on this site

U.S. stock-index futures pointed to a lower start to the week, one session after a stellar jobs report ignited bullish sentiment on Wall Street, as investors brace for a wave of policy updates from global central banks and fresh developments in U.S. and China trade negotiations, with key tariff deadline looming Sunday.

How are major benchmarks performing?

Futures for the Dow Jones Industrial Average YMZ19, -0.08% retreated 21 points, or 0.1%, at 27,993. those for the S&P 500 ESZ19, -0.07% gave up 1.85 points, or 0.1%, to 3,144.25, while Nasdaq-100 futures NQZ19, -0.08% slipped 5 points, or 0.1%, at 8,396.

On Friday, the Dow DJIA, +1.22%  rose 337.27 points, or 1.2%, at 28,015.06, while the S&P 500 SPX, +0.91%  gained 28.48 points, or 0.9%, to 3,145.91, and Nasdaq Composite Index COMP, +1.00%  advanced 85.83 points to 8,656.53, a gain of 1%.

The Dow notched its best day since Oct. 4 and sits 0.5% away from its record close of around 28,164 set on Nov. 27, while the S&P 500 posted its best percentage gain since Nov. 1 and remains 0.2% from its record of 3,153.63 also set on Nov. 27. The Nasdaq’s advance put it 0.6% below its Nov. 27 record close of 8,705.18.

For the week, the Dow and Nasdaq lost 0.1%, while the S&P 500 gained 0.2%.

What’s driving the market?

Monetary policy will come into focus this week, with the Federal Reserve set to commence its policy gathering on Tuesday and the European Central Bank, headed by new President Christine Lagarde, scheduled to hold its central-bank convention on Thursday, with investors hoping to garner clues on the state of the global economy and the outlook for interest rates.

Meanwhile, investors continue to assess the state of tariff talks ahead of the Dec. 15 deadline for 15% import duties on $156 billion in annual consumer imports set to take effect. Some experts, however, have speculated that the President Donald Trump may delay implementing tariffs as the parties work toward a lasting detente.

On Friday, anxious stock-market investors shook off tariff concerns to focus on the strength of the U.S. labor market. The U.S. economy created 266,000 new jobs in November, the Labor Department reported, marking the biggest gain since January, signaling job growth remains robust even though economic growth has slowed.

“It was all about the US employment data on Friday, which easily beat forecasts,” wrote Marios Hadjikyriacos, investment analyst at XM in a Monday note. “The icing on the cake was the [University of Michigan] consumer sentiment index for December, which unexpectedly jumped to its highest since May, extinguishing concerns that a recession may be on the horizon.”

“The blockbuster numbers cemented expectations that the Fed will reaffirm its neutral stance at Wednesday’s policy meeting, propelling the dollar higher alongside Treasury yields and US stocks,” he added.

Economic reports out of China indicate that trade tensions have hurt the world’s second-largest economy, as China’s exports unexpectedly dropped 1.1% in November from a year earlier, while shipments to the U.S. fell 23%, data from the General Administration of Customs showed over the weekend.

China’s commerce ministry on Monday said Beijing hopes trade negotiations with the U.S. will result in a “satisfactory” outcome soon, according to reports.

Which stocks are in focus?

Tesla Inc. TSLA, +1.67% gained 0.5% even as reports indicated that a Tesla Model 3 on autopilot crashed into two vehicles — one of them belonged to the Connecticut State Police.

Shares of Merck & Co. Inc. MRK, +0.11% were in focus after the pharmaceutical company said it would buy ArQule Inc. ARQL, +1.63% in a deal worth $2.7 billion.

UnitedHealth Group Inc. UNH, -0.26%  subsidiary OptumRx’s is acquiring Diplomat Pharmacy Inc. DPLO, +3.75%  for $4 per share, the companies said Monday, well below Friday’s closing price of $5.81. Diplomat shares were down 31.5% in premarket trade, while United were unchanged.

Sanofi SA shares SNY, -0.11% edged lower on Monday after the French pharmaceutical company said that it will acquire biotechnology company Synthorx Inc. THOR, +0.20% for an aggregated equity value of around $2.5 billion. U.S.-listed shares of Sanofi edged down 0.1% in premarket action, while those for Synthorx soared 167%.

How are other markets faring?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.85% edged 1.4 basis points lower to 1.823%.

West Texas Intermediate crude for January delivery CLF22, +1.20% on the New York Mercantile Exchange fell 65 cents, or 1.1%, to trade at $58.55 a barrel, after gaining 7.3% gain last week, according to Dow Jones Market Data.

Gold prices on Monday rose modestly. February gold GCF20, +0.27%  on Comex added $3.30, or 0.2%, at $1,462.40 an ounce, after the yellow metal shed 1.2% on Friday and lost 0.5% for the week.

The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, -0.14%, declined 0.1%, to 97.589, against a basket of a half-dozen currency peers. The index lost 0.6% last week.

European stocks inched lower, with the Stoxx 600 Europe index SXXP, -0.20% off 0.2% at 406.65.

In Asia overnight Friday, the Hang Seng HSI, -0.01%  finished little-changed, the China CSI 300 000300, -0.18%  fell 0.2%, while the Shanghai Composite Index SHCOMP, +0.08% gained about 0.1%. Japan’s Nikkei 225 NIK, +0.33%  rose 0.3%.