Monday June 14th
S&P 500 futures are little changed with benchmark at a record, Nasdaq futures gain
U.S. stock index futures were steady in early morning trading Monday as investors digested the S&P 500′s record level heading into a week with a key Federal Reserve meeting. Dow Jones Industrial average futures rose 11 points. S&P 500 futures were flat. Nasdaq 100 futures were the relative standout performer, gaining 0.3%. Investors are giving growth and tech stocks another chance as bond yields come down. The 10-year Treasury went below 1.43% on Friday, a three-month low. Cathie Wood's Ark Innovation, an ETF that focuses on disruptive technology, returned about 6% last week. Boosting cryptocurrency sentiment, Tesla CEO Elon Musk on Sunday said the company will resume bitcoin transactions once it confirms there is reasonable clean energy usage by miners. Bitcoin recovered back above $39,000 on the news. Tesla, also a big holder of bitcoin, gained about 1% in premarket trading. Other key tech stocks Nvidia and Zoom also rose in premarket trading. The Fed's two-day policy meeting will likely dominate investor behavior this week. Although the central bank is not expected to take any action, its forecasts for interest rates, inflation and the economy could move the markets. The Fed could possibly move up its forecast for a rate hike after saying in its last quarterly update that it would keep its benchmark rate near zero through 2023, the Wall Street Journal reported on Monday. Fed Chairman Jerome Powell speaks to the press after the central bank issues its statement Wednesday and traders will be parsing his comments for any clues as to when the Fed could start to end its aggressive monthly asset purchases, especially given recent hotter-than-expected inflation readings. "Considering the recent outsized inflation reports, the Federal Reserve's meeting this week will be scrutinized for any telltale sign the Fed's timetable for either raising the Funds Rate or tapering QE is being moved forward," Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. "Any evidence suggesting monetary tightening is being moved forward will likely bring volatility to the stock market," added Paulsen. U.S. stocks ended last week with a record closing high for the S&P 500 and the beginning of a rotation back into growth names. Last week, the 30-stock Dow Jones Industrial Average fell 0.8%, but the S&P 500 rose 0.4%, for its third straight positive week. The Nasdaq Composite was the outperformer with a gain of nearly 1.9%, posting its fourth winning week in a row as the tech trade came back into favor. "Because the S&P 500 Index reached yet another new record high last week, investors will be watching to see if this signals even higher levels near term," said Paulsen. Meme stocks also garnered attention last week. AMC Entertainment, Clover Health Investments, GameStop and more experienced volatile trading as the group continued to get attention from the social media investors on Reddit. Shares in Asia-Pacific were mixed in Monday trade, with multiple major markets in the region closed for holidays. The Nikkei 225 in Japan rose 0.74% to close at 29,161.80 while the Topix index gained 0.29% to finish its trading day at 1,959.75. South Korea's Kospi closed fractionally higher at 3,252.13. Over in Southeast Asia, Singapore's Straits Times index slipped about 0.1% in afternoon trade. Markets in Australia, mainland China and Hong Kong were closed on Monday for holidays. Oil prices rose on Monday, hitting their highest levels in more than two years supported by economic recovery and the prospect of fuel demand growth as vaccination campaigns in developed countries accelerate. Brent was up 45 cents, or 0.6%, at $71.36 a barrel, their highest since April 2019. U.S. West Texas Intermediate gained 53 cents, or 0.7%, to $73.22 a barrel, their highest since October 2018. Gold prices fell more than 1% on Monday, weighed down by a stronger dollar and easing concerns about inflation, while investors awaited cues from the U.S. Federal Reserve's policy meeting due later this week. Spot gold fell 1.4% to $1,849.98 per ounce by 1217 GMT, after hitting its lowest since May 17 at $1,848.49. U.S. gold futures dropped 1.4% to $1,852.50 per ounce.