U.S. stock index futures were little changed on Monday morning as traders monitored the negotiations over the U.S. debt ceiling as government officials scramble to avoid a default. Futures for the Dow Jones Industrial Average and S&P 500 futures traded flat, while Nasdaq 100 futures were 0.1% lower. Stocks rose last week despite the uncertainty in Washington. The Nasdaq Composite climbed 3.04%, while the S&P 500 gained 1.65%. The Dow added 0.38%. President Joe Biden and House Speaker Kevin McCarthy, R-Calif., are set to meet Monday to continue negotiations. Treasury Secretary Janet Yellen has said the U.S. could default on its debt as early as June 1. The market has continued to grind higher, led by tech stocks, even in the face of a potential debt default and stubborn inflation. Bank of America strategist Savita Subramanian on Sunday hiked her year-end target for the S&P 500 to 4,300 from 4,000, saying that the focus of companies on efficiency would make earnings more stable and that stocks were not overvalued. “Current valuations are not low, but rarely are low during profits recessions. On cyclically adjusted earnings, valuations argue for price returns of 5% per year for the S&P 500 over the next decade,” Subramanian said in a note to clients. The first-quarter earnings season is winding down, but there are a few notable reports in the coming days, with Zoom Video on Monday and Lowe’s and Dick’s Sporting Goods on Tuesday. The upcoming week has a relatively light slate of economic data, highlighted by a second reading for first-quarter GDP on Thursday and the personal consumption expenditures gauge, the Federal Reserve’s preferred inflation measure, on Friday. The release of the Fed minutes on Wednesday from the May meeting could also shed light on how central bankers are thinking about the possibility of further rate hikes. Fed Chairman Jerome Powell on Friday indicated that stresses in the banking system could slow economic growth and reduce the need for higher interest rates. Traders will also be keeping an eye on JPMorgan Chase’s investor day on Monday. Asia-Pacific markets mostly rose on Monday as stocks in Tokyo extended its rally and talks on the U.S. debt ceiling were slated to resume. Hong Kong’s Hang Seng index rose 1.23%, leading gains in the region as the Hang Seng Tech index jumped 2.17%. In mainland China, the Shanghai Composite closed 0.39% up at 3,296.47 and the Shenzhen Component was 0.32% higher and ended at 11,127.04 as the People’s Bank of China left its 1-year and 5-year loan prime rates unchanged. South Korea’s Kospi rose 0.76% to end the day at 2,557.08 as chip stocks such as SK Hynix and Samsung Electronics saw gains. This comes after Beijing said it would bar operators of key infrastructure from buying products of Micron. The Nikkei 225 gained 0.9% to close at 31,086.92 and the Topix rose 0.66% to end at 2,175.9, marking its seventh winning streak as stocks in Japan stayed at the highest levels since 1990. At this level, the Nikkei is up just over 20% year to date. Stocks in Australia bucked the trend with the S&P/ASX 200 was 0.18% lower, finishing Monday at 7,266.6. Oil prices slipped on Monday as caution around the U.S. debt ceiling talks and concerns about demand recovery in China offset support from lower supplies from Canada and OPEC+ producers. Brent crude futures fell 48 cents, or 0.6%, to $75.10 a barrel by 0201 GMT while U.S. West Texas Intermediate (WTI) crude for July delivery, the more actively traded contract, fell 45 cents, or 0.6%, to $71.24. The June WTI contract, which expires later on Monday, fell 52 cents to $71.03 a barrel. Gold prices edged up on Monday as drawn-out discussions around the U.S. debt ceiling and Federal Reserve Chair Jerome Powell’s less-hawkish comments added to the safe-haven bullion’s appeal. Spot gold was up 0.1% at $1,978.06 per ounce as of 0347 GMT, while U.S. gold futures eased 0.1% to $1,979.40.
Roodeweg 222, Willemstad, Curaçao