S&P 500, Nasdaq Futures Hold On To Slender Gains As Lack Of Major Trading Cues Keep Sentiment Subdued — These Stocks In Focus Today

Zinger Key Points
  • With the Fed going into a quiet period, Friday's PPI and consumer sentiment report along with bond yield could guide trading.
  • Fed's dovish tone at next week's FOMC meeting is key to unlocking the year-end Santa Claus rally.

Stocks appear on track to open Tuesday’s session on a mixed note after Monday’s sharp retreat amid the climb in bond yields. Given the lack of any major market-moving data and earnings news, the market could witness directionless trading until Friday. All eyes could be on the yield on the 10-year Treasury note, which is considered a proxy for rate expectations.

The major U.S. averages closed Monday’s session notably lower, as a strong service sector reading tempered expectations for a Fed easing. All sector indices moved to the downside, led by consumer discretionary, energy and financial stocks.

U.S. Indices' Performance On Monday
Index Performance (+/-)   Value
Nasdaq Composite -1.93%   3,998.84
S&P 500 Index -1.79%   4,071.70
Dow Industrials -1.40%   33,9741.10

With the Fed officials going into a quiet period ahead of next week’s Federal Open Market Committee meeting, the market is expected to look toward economic data for trading cues. The Dec. 13- Dec. 14 Fed meeting is key for the market direction going into the end of the year.

“With the next major hurdle for the S&P 500 at 4,100 another dose of a “dovish” Powell may be needed even more than positive seasonality,” said Quincy Krosby, chief global strategist for LPL Financial.

Here’s a peek into index futures trading:

U.S. Futures' Performance On Tuesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +0.13%  
S&P 500 Futures +0.04%  
Dow Futures -0.02%  
R2K Futures -0.14%  

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY rose 0.08% to $399.90 and the Invesco QQQ Trust QQQ moved up 0.11% to $287.96, according to Benzinga Pro data.

On the economic front, the Commerce Department is scheduled to release its trade balance report for October at 8:30 a.m. EST. Economists, on average, expect the trade deficit to widen from $73.3 billion to $80 billion.

The Redbook index, a sales-weighted index of year-over-year same-sales growth in a sample of large U.S. general merchandise retailers, is scheduled to be released at 8:55 a.m. EST.

The Energy Information Administration will release its short-term energy outlook at 12 p.m. EST.

See also: Best Penny Stocks

Stocks In Focus:

  • Chinese e-commerce stocks Alibaba Group Holding Limited BABA, JD.com, Inc. JD and Bilibili, Inc. BILI advanced in in premarket trading.
  • PepsiCo PEP could be in focus after reports of job cuts in North America.
  • Another Salesforce, Inc. CRM executive is departing, as Slack CEO Stewart Butterfield announced relinquishing his role at the customer relationship management software provider.
  • Signet Jewelers Limited SIG and auto parts retailer AutoZone, Inc. AZO are among the notable names reporting ahead of the market open.
  • Luxury homebuilder Toll Brothers, Inc. TOL and Smith & Wesson Brands, Inc. SWHC are due to release their quarterly results after the market close.

Commodities, Other Global Equity Markets:

Crude oil futures were extending their losses on Tuesday. A barrel of WTI-grade oil fell about 1.50% to under $76, adding to the 4.62% drop in the previous session.

Most Asia-Pacific markets retreated on Tuesday, tracking Wall Street’s losses overnight. Fed worries continued to keep sentiment subdued even as the Japanese and Chinese markets bucked the downtrend with modest to moderate losses.

European stocks started Tuesday’s session and were seen languishing in late morning trading.

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