US stocks start mostly higher as upbeat mood rolls on

9.40am: US benchmarks mostly higher

US stocks opened mixed to start the week, with the Dow lagging, but the S&P 500 and Nasdaq hit new intraday highs as the bullish investor mood appears to be continuing.

Soon after the bell, the Dow Jones Industrial Average shed around 84 points at 34,349.

The S&P 500 added around three points at 4,283. The Nasdaq advanced over 92 points at 14,452.

“Despite a weaker start on Monday, sentiment is overall positive in these last few days of the month and quarter,” said Fawad Razaqzada, market analyst at ThinkMarkets.com.

“Buying-the-dip is likely to remain the trade of choice in the equity markets, as despite rising inflationary pressures, central banks are still keen to keep their record stimulus measures in place for the time being.”

He added: “This message is likely to be echoed by a handful of central bank officials scheduled to speak. On Wednesday, we might see some volatility as money managers rebalance their portfolios ahead of the third quarter.”

Coming up, attention will turn to this Friday’s US jobs data, where traders will be looking for a rebound from some disappointing recent monthly stats.

“Analysts expect a 600K reading, which would be a little higher than the May print. However, average hourly earnings have beaten expectations in the previous two months and another sharp rise could re-ignite inflation concerns,” noted Razaqzada.

7.30am: Dull Monday expected

US stocks are expected to start the new week on the back foot as investors brace for the start of a new month which will bring the always important latest US job data on Friday, although little is due to provide any direction on Monday aside from. speeches from some Federal Reserve members.

The Dow Jones Industrial Average is expected to open at around 34,403, down 31 points on Friday’s close, while the broader S&P 500 is expected to start at around 4,282, off a point or so. The tech-heavy Nasdaq 100 is tipped to open 12 points weaker at 14,372.

“With no US economic data for investors to focus on, attention will be firmly on John Williams and Patrick Harker, Presidents of the Federal Reserve Banks of New York and Philadephia, respectively, for further clues over the next steps,” said Sophie Griffiths, market analyst at OANDA.

She added: “Fed speakers have been sending mixed messages. We know the Reserve is thinking about policy normalisation, but at the same time, Fed speakers are also insisting the spike in inflation is temporary, and there is no rush to start hiking rates.”

The Fed’s preferred measure of inflation, the PCE, increased by a smaller-than-expected 0.5% month-on-month in May indicating that the Fed might not be so rushed to start tightening monetary policy.

Five things to watch on Monday:

• The United States cannot afford a “boom and bust cycle” in the housing market that would threaten financial stability, Boston Federal Reserve Bank President Eric Rosengren told the Financial Times in an interview on Monday.
• United Airlines is putting the finishing touches to an airplane order potentially worth $30 billion at list values for up to 270 narrowbody jets in a bid to secure a coronavirus pandemic recovery at favourable prices, industry sources have told Reuters.
• Burberry boss Marco Gobbetti is leaving the company to return home and take the helm of Italian luxury goods group Ferragamo, casting a pall over the British fashion brand’s revamp.
• French carmaker Renault said on Monday it had sealed partnerships with China’s Envision AESC and France’s Verkor to produce electric car batteries in northern France.
• China’s biggest ride-sharing firm Didi Global Inc will close the investor order books on Monday for its US initial public offering (IPO) to raise up to $4 billion one day early, two people with direct knowledge of the matter have told Reuters.

Story by ProactiveInvestors