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| | US Market |  | | NYSE | AMEX | Dow Jones | Nasdaq |  |  |  |  | | Please click on the images to view our interactive charts | | The major U.S. index futures are pointing to a lower opening on Monday, with stocks likely to move back to the downside after closing higher over the two previous sessions.
Lingering trade concerns are likely to weigh on the markets as tariffs on $34 billion worth of Chinese imports to the U.S. and a matching $34 billion worth of U.S. exports to China are due to take effect on July 6th.
Potentially adding to the concerns, news website Axios obtained a leaked draft of bill ordered by President Donald Trump that would declare America?s abandonment of fundamental World Trade Organization rules.
The bill, known as the United States Fair and Reciprocal Tariff Act, essentially provides Trump a license to raise U.S. tariffs at will, without congressional consent, Axios said.
?It would be the equivalent of walking away from the WTO and our commitments there without us actually notifying our withdrawal,? a source familiar with the bill told Axios.
However, the source noted Congress would never give the president the authority, and a White House spokeswoman told Axios the administration does not have actual legislation it is preparing to rollout.
A previous report from Axios said Trump has repeatedly told top White House officials he wants to withdraw the United States from the World Trade Organization.
Overall trading activity is likely to be somewhat subdued, however, with the upcoming July 4th holiday likely to keep some traders on the sidelines.
Later this week, trading may be impacted by reaction to the Labor Department?s monthly jobs report and the minutes of the latest Federal Reserve meeting.
After trading notably higher throughout much of the session, stocks pulled back sharply going into the close of trading on Friday. The major averages showed a notable decline but managed to end the day in positive territory.
The tech-heavy Nasdaq briefly dipped into negative territory but inched up 6.62 points or 0.1 percent to 7,510.30. The Dow edged up 55.36 points or 0.2 percent to 24,271.41, and the S&P 500 crept up 2.06 points or 0.1 percent to 2,718.37.
Despite moving higher over the past two days, the major averages all moved notably lower for the week. The Nasdaq tumbled by 2.4 percent, while the Dow and the S&P 500 both slumped by 1.3 percent.
The late-day pullback on Wall Street may have reflected lingering concerns about the global economic impact of recent trade disputes between the U.S. and other major economies.
Strength in the financial sector helped to drive the markets higher early in the day after most of the nation's largest banks passed the Federal Reserve's annual stress test.
Financial giants such as Wells Fargo (WFC), Citigroup (C), and JPMorgan Chase (JPM) have subsequently announced billions of dollars in stock buybacks and raised their quarterly dividends.
Strength in the overseas markets also generated early buying interest on Wall Street despite the lingering trade concerns.
Asian stocks reversed early losses to end mostly higher after China eased restrictions on foreign investment in sectors including banking, automotive, heavy industry and agriculture amid scrutiny from its top trading partners.
The U.S. and the European Union have been complaining that Beijing limits foreign firms' ability to enter the world's second-largest economy.
News EU leaders have reached an agreement on migration, averting a political crisis in Germany, also contributed to strength in the European markets.
On the U.S. economic front, a report released by the Commerce Department showed personal income increased in line with economist estimates in the month of May, although the report also showed weaker than expected growth in personal spending.
The report said personal income climbed by 0.4 percent in May after edging up by a downwardly revised 0.2 percent in April.
Economists had expected income to rise by 0.4 percent compared to the 0.3 percent increase originally reported for the previous month.
Meanwhile, the Commerce Department said personal spending rose by 0.2 percent in May after climbing by a downwardly revised 0.5 percent in April.
Personal spending had been expected to increase by 0.4 percent compared to the 0.6 percent growth originally reported for the previous month.
A separate report from the University of Michigan showed consumer sentiment improved by much less than initially estimated in the month of June.
The report said the consumer sentiment index for June was downwardly revised to 98.2 from the preliminary reading of 99.3.
The index for June is still slightly above the final May reading of 98.0, although economists had expected a much more modest downward revision to 99.2.
Surveys of Consumers chief economist Richard Curtin said the downward revision was largely due to concerns about the potential impact of tariffs on the domestic economy.
Despite the late-day pull back by the broader markets, gold stocks showed a significant move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.4 percent. The strength among gold stocks came amid an increase by the price of the precious metal.
Considerable strength also remained visible among biotechnology stocks, as reflected by the 1.9 percent jump by the NYSE Arca Biotechnology Index. The index continued to recover after hitting its lowest intraday level in well over a month on Thursday.
Housing and oil stocks also ended the session notably higher, while most of the other major sectors showed more modest moves on the day.
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| | U.S. Economic Reports | | | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | |
At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of June.
The ISM?s purchasing managers index is expected to dip to 58.1 in June after climbing to 58.7 in May, with a reading above 50 indicating growth in the manufacturing sector.
The Commerce Department is also due to release its report on construction spending in the month of May at 10 am ET. Construction spending is expected to rise by 0.5 percent in May after jumping by 1.8 percent in April.
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| | Stocks in Focus |
Shares of VMWare (VMW) are moving sharply higher in pre-market trading after Dell Technologies said it would buyout the shares that track the performance of the cloud software company.
Clothing company Perry Ellis (PERY) may also move to the upside after a report from the Wall Street Journal said men?s accessories company Randa Accessories is preparing to submit a $28 per share bid for the company.
On the other hand, shares of Nordstrom (JWN) may see initial weakness after Cowen downgraded its rating on the company?s stock to Market Perform from Outperform. |
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| | Europe |
European stocks succumbed to selling pressure on Monday as Germany faced a political crisis over immigration and trade worries persisted ahead of a July 6th deadline when the United States is due to impose tariffs on Chinese exports. Weak manufacturing data from China, Europe and the U.K. has also weighed on the markets.
While the German DAX Index has fallen by 0.4 percent, the U.K.?s FTSE 100 Index and the French CAC 40 Index are both down by 0.8 percent.
Nestle shares are marginally lower after U.S. activist investor Daniel Loeb ratcheted up pressure on the Swiss food giant to raise its financial returns and sell its stake in L'Oréal SA.
Cement giant LafargeHolcim has also moved to the downside. The company said it has terminated the liquidity enhancement agreement with Exane S.A. for its listing on Euronext Paris as of June 30, 2018.
Recordati shares have slumped after a consortium of investment funds led by private-equity firm CVC Capital Partners agreed to buy a stake in the Italian pharmaceutical company at a discount.
Airbus shares have declined in Paris. A report from Bloomberg said the global aerospace major will miss its delivery target for Pratt & Whitney-powered A320neo narrow-body jets this year after problems with the engines caused an almost three-month halt in shipments.
Germany's ThyssenKrupp has also moved lower after signing a definitive agreement with Tata Steel to create a new company by combining their European steel businesses in a 50/50 joint venture.
On the other hand, software firm Micro Focus has jumped in London after announcing the sale of its SUSE business segment to Blitz 18-679 GmbH.
Vedanta Resources has also surged higher after chairman Anil Agarwal's family trust agreed to buy the remaining minority stake in the company in a deal that values the mining conglomerate at 2.3 billion pounds.
In economic news, Eurozone factory activity grew at the weakest pace in more than a year in June, final data from IHS Markit showed.
The factory Purchasing Managers' Index fell to an 18-month low of 54.9 in June from 55.5 in May. This was slightly below the flash estimate of 55.0.
Separately, survey results from IHS Markit showed that U.K. manufacturing sector growth remained subdued in June.
The IHS Markit/Chartered Institute of Procurement & Supply factory Purchasing Managers' Index rose slightly to 54.4 in June from revised 54.3 in May. The score was almost four points below the 51-month high reached in November 2017.
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| | Asia | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | |
Asian stocks ended mostly lower on Monday as trade worries persisted, oil prices declined on supply worries, Chinese manufacturing data came in softer than expected and a resolution to Germany's government crisis proved elusive.
Crude oil prices fell more than 1 percent in Asian trading after U.S. President Donald Trump claimed that Saudi Arabia has agreed to raise oil production.
China's Shanghai Composite Index tumbled 71.65 points or 2.5 percent to 2,775.77 after surveys showed a deterioration in the outlook for Chinese manufacturing, adding to concerns over tighter government controls on lending. Hong Kong markets were closed for the SAR Day holiday.
Japanese shares hit 2-1/2-month lows as the dollar pared back gains against the yen ahead of a July 6th deadline when the United States is due to impose tariffs on Chinese exports. A slump in China's stock market and weak data on manufacturer sentiment also forced investors to unwind long positions.
An index monitoring business sentiment in Japan ebbed in the second quarter of 2018, the Bank of Japan said in its quarterly Tankan business survey. The large manufacturers' index came in with a score of +21, missing expectations for +22 and down from +24 in the previous quarter.
Separately, a Nikkei survey showed that activity in Japan's manufacturing sector continued to expand in June, and at an accelerated rate.
The Nikkei 225 Index plunged 492.58 points or 2.2 percent to 21,811.93, marking the largest single-day loss since mid-March and the lowest closing level since April 13th. The broader Topix Index plummeted 2.1 percent to close at 1,695.29.
Defensive stocks came under selling pressure, with Kikkoman Corp. and Aeon falling around 6 percent. Sharp Corp. shares fell 7.8 percent on profit taking after moving sharply higher last Friday.
Australian shares fell modestly as investors digested mixed data on consumer inflation, manufacturing and job advertisements and looked ahead to Reserve Bank of Australia?s monetary policy decision on Tuesday.
The benchmark S&P/ASX 200 Index dropped 16.80 points or 0.3 percent to 6,177.80. The broader All Ordinaries Index ended down 16.40 points or 0.3 percent at 6,273.30.
While healthcare stocks rebounded after six straight sessions of losses, banking and realty stocks succumbed to selling pressure.
Automotive Holdings Group plunged 8.8 percent after China's HNA Group pulled out of a A$280 million deal to buy its refrigerated logistics business.
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| | Commodities |
Crude oil futures are sliding $0.40 to $73.76 a barrel after climbing $0.70 to $74.15 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,250, down $4.50 from the previous session?s close of $1,254.50. On Friday, gold rose $3.50.
On the currency front, the U.S. dollar is unchanged compared to the 110.76 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1634 compared to last Friday?s $1.1684.
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