- US benchmarks score all-time highs during last week's trade
- Pfizer pill success could prove to be a positive market catalyst
- Oil continues to trade higher
Key Events
US futures on the Dow, S&P and NASDAQ wavered between gains and losses on Monday, while contracts on the Russell 2000 were trading firmly in the green, and European stocks retreated ahead of key US inflation data due to be published this week. Wednesday's CPI figures will provide a gauge on economic growth and may impact monetary policy, including the pace of reducing the current stimulus from the Federal Reserve.
Meanwhile the rally in Bitcoin and Ethereum continues.
Global Financial Affairs
In Europe, the STOXX 600 Index edged lower in trading, with the retail sector's decline overshadowing increases in energy-related stocks.
Most of the Asian benchmarks were in the red, led by Hong Kong. The Hang Seng's 0.43% decline was driven by tech giants and healthcare shares. Vaccine related stocks sold off after Pfizer (NYSE:PFE) announced its experimental antiviral pill against coronavirus reduced the chance of hospitalization or death for adults by 89%. The single bright spot was China's Shanghai Composite's 0.2% gain.
Economically sensitive stocks led a rally on Friday after the Pfizer announcement encouraged investors to believe that the recent solid jobs growth will continue. All major US indices added to a string of records. The S&P 500 posted its fifth straight week of gains, its longest weekly winning streak since August 2020. The NASDAQ 100 rose for its 10th consecutive day, even as industrial and commodity shares outperformed technology stocks.
Treasury traders locked in profits after a two-day selloff at the end of last week, allowing yields on the 10-year Treasury note to near 1.49%
However, we consider this rise temporary from a technical approach and see a retest of the H&S for yields as a return-move.
The dollar sold off along with Treasuries.
Technically, Friday's High Wave candle confirmed the resistance at the 94.50 level since Sept. 29.
Gold maintained its two-day gain as the market struggled between the short-term rebound and the long-term downtrend.
The move possibly reaffirmed by a weekly H&S continuation pattern.
Both Bitcoin and Ethereum rose to new heights.
Oil rose on speculation that President Joseph Biden will tap into US stockpiles after pleading with OPEC+ to increase production in order to help fight inflation. The UAE pointed out that the oil price may double without OPEC+ increasing supply.
Crude blew out a H&S top and climbed back into a rising channel, increasing the odds of another rally.
Up Ahead
- The German, ZEW Economic Sentiment report is released on Tuesday.
- On Wednesday US wholesale inventories are published.
- The US bond market is closed in observance of Veterans Day on Thursday.
Market Moves
Stocks
- The STOXX 600 retreated
- Futures on the S&P 500 fell 0.1%
- Futures on the NASDAQ 100 fell 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index fell 0.4%
- The MSCI Emerging Markets Index fell 0.3%
Currencies
- The Dollar Index rose 0.1%
- The euro fell 0.1% to $1.1554
- The Japanese yen was up 0.03% to 113.43 per dollar
- The offshore yuan was little changed at 6.3953 per dollar
- The British pound fell 0.031% to $1.349
Bonds
- The yield on 10-year Treasuries advanced three basis points to 1.48%
- Germany's 10-year yield rose one basis point to -0.27%
- Britain's 10-year yield increased one basis point to 0.85%
Commodities
- Brent crude rose 0.8% to $83.40 a barrel
- Spot gold fell 0.1% to $1,816.17 an ounce