Before The Bell
The major U.S. stock averages turned in a mixed performance on Monday, however the S&P 500 and NASDAQ composite barreled ahead to new highs.
News was light on the economic front. U.S. pending home sales data for July posted a surprise decline, falling 1.8% compared to June, whereas many were expecting a modest increase. This marked a second consecutive decrease, as available inventory remains well below demand. Moreover, July’s figure was down 8.5% versus the year before.
Meanwhile, concerns over the COVID-19 virus continue. The European Union announced that it was considering banning nonessential travel from the U.S. And, as if spiking cases of the Delta variant weren’t enough (cases in the U.S. have risen 20% over the past two weeks, to over 150,000), an even more virulent strain has been identified in South Africa.
The Dow Jones Industrials started the session on the right foot, but closed down 55 points. However, the broader S&P 500 was up by 19 points, while the tech-heavy NASDAQ closed up 136 points, or just under 1%, marking new all-time highs for both indexes. Performance among the major market sectors was mixed, but mostly positive. The plus side was led by real estate and technology shares, each rising about 1.1%, while consumer discretionary stocks were up nearly a full percentage point. In the minus column, financials took the biggest hit, falling nearly 1.5%, while energy shares were down 1.2%.
Elsewhere oil prices advanced, with light sweet crude up about half a percentage point, to about $69.00 a barrel as assessments of the damage from Hurricane Ida began. The commodity is down about 3% over the past 30 days. However, it’s still up by more than 60% versus where it was a year ago, reflecting the economic recovery in the wake of 2020’s lockdowns. Meanwhile, the European bourses had an up day. Germany’s DAX spent the entire session in positive territory and closed with a modest gain. While France’s CAC-40 held on to end just above breakeven. The UK was closed due to a bank holiday.
As we look to the new day, stocks in Asian markets closed mostly higher, while the European bourses are showing modest losses. On our shores, U.S. stock futures are suggesting the major indexes will open down slightly, while crude oil prices have edged about 1% lower. On the economic agenda this week, on Wednesday the Institute for Supply Management (ISM) will report its manufacturing index for August, where a slight deceleration is expected. That day will also bring the latest figures on construction spending. On Friday, we get the August jobs report, with expectations calling for about 750,000 new positions created, which would mark an eighth straight month of advances. Also, the ISM will be announcing its services index for August, with consensus calling for a modest slowing in the rate of expansion.
– Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
