By
Bhushan Akolkar
April 17th, 2024
US stock futures registered gains to begin the week as global financial news optics remain slightly positive.
The stock markets regained firmer ground on Monday with the futures of the leading US indexes taking center stage. This development came about as a result of the coronavirus easing in China and improving Fed optics.
Run-through of US Stock Futures Performance
The S&P 500’s futures climbed 0.35% intraday to 4,170, representing its highest level in three weeks. By doing so, the major US index erased the losses conceded in May and snapped a string of seven weekly drawdowns. This also marked a fourth consecutive day uptrend for the S&P 500 that closely tracked Wall Street’s gains. The latter had its best week since November 2020.
The S&P’s current optimistic outlook has led to institutional investors looking to rebalance portfolios into the end of the month.
Other stocks and US futures also remained mildly positive as the Nasdaq 100 contracts inched upwards by more than 1%. However, US Treasury yields are still feeling the pressure and sit at a 2.74% monthly low. As of press time, the government financial instruments remained inactive due to the Memorial Day bank holiday. This holiday, as well as a light calendar, may broadly be restricting short-term market moves.
The Fed seemingly reconsidered its aggressive continuous rate hike policy after analyzing depressive figures in consumption, income and inflation. In addition, the dollar slipped for a third day versus its major peers, with the dollar index weighed down by trader indecisiveness. US Personal Consumption Expenditure (PCE) data was less-than-stellar for the month of April, with Core PCE Price Index equaling 4.9% year-on-year (YoY) forecasts. Furthermore, Personal Income rise fell short of expectations even though Personal Spending improved.
Traders will be keeping a close eye on the US payroll numbers later this week to ascertain the Fed’s current tightening stance. In other news, the US central bank looks to begin shrinking its $8.9 trillion balance sheet from Wednesday.
Beyond US Affairs
Besides US stock futures, European equities also ascended to their highest level in three weeks. In addition, in East Asia, Japanese and Hong Kong equities were at the forefront of Asian stock gains. Furthermore, upbeat corona-related news coming from China helped to spur the yuan. Beijing and Shanghai reported fewer outbreak cases and proceeded to ease covid-impressed activity restrictions. This action was taken by the Chinese government in order to stimulate staggering growth. Concerning the easing of the pandemic-induced restrictions in China’s business districts, a Reuters report read:
“Shanghai said on Sunday ‘unreasonable’ curbs on businesses will be removed from June 1, as it looks to lift its COVID-19 lockdown, while Beijing reopened parts of its public transport as well as some malls and other venues as infections stabilized.”
Global oil prices also rose following China’s decision to ease lockdowns, as well as amid ongoing plans by the European Union to ban Russian crude imports.