US Stocks Start New Trading Week On Negative Note Amid Lack Of Clarity On Rate Outlook — China Stocks Rip Higher; Apple, Tesla In Spotlight

Zinger Key Points
  • Analysts have diverging opinion about the course of the market for the remainder of the month.
  • The Santa Claus rally, typical of the year end, largely hinges on economic data and the Fed's take on the rate outlook.

The index futures are pointing to a moderately lower opening by Wall Street stocks on Monday after the averages closed Friday’s session narrowly mixed in reaction to the November non-farm payrolls report. Traders could look ahead to rising oil prices, the easing COVID-19 curbs in China and two services sector readings due for the session.

The major averages clocked in a second straight weekly gain in the week ended Dec. 2, as traders began pricing in a less aggressive stance from the Federal Reserve going forward.

U.S. Indices' Performance During Week Ended Dec. 2
Index Performance (+/-)   Value
Nasdaq Composite +1.56%   11,461.50
S&P 500 Index +1.13%   4,071.70
Dow Industrials +0.24%   34,429.88

Here’s a peek into index futures trading:

U.S. Futures' Performance On Monday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures -0.32%  
S&P 500 Futures -0.42%  
Dow Futures -0.42%  
R2K Futures -0.53%  

In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY fell 0.42% to $405.20 and the Invesco QQQ Trust QQQ moved down 0.29% to $291.70, according to Benzinga Pro data.

On the economic front, the S&P is scheduled to release its final service sector and composite purchasing managers’ indices for November at 9:15 a.m. EST. Both readings are expected to stay at levels suggesting contracting activity.

At 10 a.m. EST, the Institute for Supply Management will release the results of its November non-manufacturing sector survey. The non-manufacturing PMI is expected to slip from 54.4 in October to 53.3 in November.

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The Commerce Department is due to release its factory goods orders report for October at 10 a.m. EST. Factory orders may have risen 0.7% month-over-month, faster than the 0.3% increase seen in September.

The Treasury will auction 3-month, and 6-month bills at 11:30 a.m. EST.

Stocks In Focus:

  • Tesla Inc. TSLA shares are in focus after the electric vehicle maker reported record China deliveries in November. A separate Reuters report also said the company is planning to reduce China Model Y production by 20% in December.
  • Apple Inc. AAPL may see some activity after a report in The Wall Street Journal suggested the tech giant could be accelerating its shift out of China.
  • China stocks were moving to the upside in premarket trading. Alibaba Group Holding Limited BABA, Inc. JD, Bilibili Inc. BILI, Nio Inc. NIO, XPeng Inc. XPEV and Li Auto Inc. LI were all solidly higher.

Commodities, Other Global Equity Markets:

Crude oil futures were reversing course and traded higher on Monday as the European Union is set to discuss sanctions against Russia this week. Meanwhile, OPEC+, which met on Sunday, decided to push ahead with its plan to cut output by two million barrels per day from November through 2023. A barrel of WTI-grade crude oil traded up 2.18% to $81.72.

The major Asia-Pacific markets closed Monday’s session on a mixed note, with the easing COVID-19 curbs in China and the nervous close on Wall Street on Friday serving as catalysts.

Hong Kong’s Hang Seng Index skyrocketed 4.51% and China’s Shanghai Composite Index advanced 1.76%. Sentiment in the rest of the markets was muted.

European stocks opened lower but have turned mixed in late-morning trading. While Germany’s DAX Index and France’s CAC 40 Index retreated, U.K.’s FTSE 100 Index gained ground.
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