Equity futures rise ahead of economic data

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U.S. equity futures edged higher on Monday, suggesting the major indices will kick off the week as investors wait for data on the U.S. manufacturing and services sectors.

S&P 500-linked futures rose 0.4%, pointing to the broad market index extending Friday’s 0.8% gain. Futures on the Nasdaq-100 climbed 0.3%, indicating a more modest rise in tech stocks after the opening bell.

Investors are largely focused on the Federal Reserve’s annual economic policy symposium later this week, awaiting further clues as to when policymakers may slow down bond buying. At the same time, growing concerns that high levels of Covid-19 infection could slow the global economic recovery pushed stocks down last week. Dallas Fed Chairman Rob Kaplan said on Friday he may rethink his call to start cutting asset purchases soon if the Delta variant weighs on growth.

“If there is any sign that the US economy is slowing, the Fed will not shrink,” said Michael Hewson, chief market analyst at CMC Markets. “There is a long road between blazing a trail for tapering and actually doing it.”

In pre-market exchanges, shares of rideshare companies declined after a California judge said a move to continue to treat their drivers as independent contractors rather than employees is unconstitutional. Uber Technologies fell and Lyft fell about 4%.

Pfizer increased by more than 3% and BioNTech by more than 7%. The U.S. Food and Drug Administration is expected to grant full approval this week for the Covid-19 vaccine developed by the two companies, people familiar with the matter told the Wall Street Journal.

Preliminary purchasing managers’ surveys on manufacturing and services in the United States for August are expected at 9.45 a.m. ET. Similar data for Australia overnight showed a contraction in activity amid tighter Covid-19 restrictions. The indicators for Japan and the euro zone were lower than economists’ expectations.

“We will probably see signs of [global] growth stabilizes, that will be the big picture, ”said Carsten Brzeski, Global Head of Macro at ING. “There are two reasons for this: a little more fear and uncertainty due to the Delta variant and the friction in the supply chain. “

A gauge of existing home sales in the United States is expected at 10 a.m. Economists forecast a moderate pullback for July after prices hit a record high in June.

The benchmark 10-year T-bill yield edged up to 1.272% from 1.259% on Friday. Yields increase when prices fall. The current level of yields indicates that the bond market expects a continuation of extremely loose monetary policy, Brzeski said.

Oil prices rebounded, with Brent crude rising more than 3% to trade at $ 67.34 a barrel, after the benchmark commodity closed its worst week since October.

The price of bitcoin has crossed $ 50,000 for the first time since May. It traded around $ 50,250, an increase of over 3% from its 5pm level on Friday. PayPal extended its cryptocurrency services to the UK on Monday, allowing its UK customers to buy, hold and sell digital assets such as bitcoin on its platform.

A trader was working on the floor of the New York Stock Exchange on Friday.


Photo:

andrew kelly / Reuters

Overseas, the pancontinental Stoxx Europe 600 rose 0.5%.

Among European stocks, UK supermarket chain J Sainsbury jumped nearly 15% on a report that private equity giant Apollo Global Management is considering a takeover.

In Asia, most of the major benchmarks increased as markets closed. The Shanghai Composite Index rose 1.5% and the Hong Kong Hang Seng Index rose 1.1%.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

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