US benchmarks start week higher as retail sales set to take center stage

9.36am: US benbchmarks on front foot Monday

US benchmarks started higher on Monday as investors await a slew of retail sales data this week, which will act as gauge for consumer sentiment.

In early deals in New York, the Dow Jones Industrial Average added around 113 points to stand at 36,213, while the  broader-based S&P 500 gained over 11 points at 4,694.

The technology company weighted Nasdaq advanced over 47 points at 15,908.

Retail sales data from the US, China, UK and Canada is all expected this week and Fawad Razaqzada, Market Analyst at ThinkMarkets, said this will mean seeing how “surging energy prices and global supply chain issues have impacted consumer spending, and what this might mean for the markets”.

“We already know US consumer sentiment hit a 10-year low, according to a University of Michigan’s closely-watched survey that was released at the back end of last week,” he said.

“With sentiment downbeat among consumers, this might be reflected in lower levels of spending in the months. We will get to see the latest retail sales data for the month of October from the US, as well as some of the other largest economies in the world. Meanwhile we will have earnings from top US retailers such as Walmart, Target and Home Depot to provide as an alternative snapshot of the health of the US consumer,” he added.

6.30am: US shares seen starting higher

US stocks are expected to start the new trading week positively on Monday, extending Friday’s rally even though last week overall showed a modest loss, snapping a five-week winning streak.

Futures for the Dow Jones Industrial Average were up 0.3% on Monday, while those for the broader S&P 500 and tech-laden Nasdaq-100 both rose 0.2%.

On Friday the Dow gained 0.6%, the S&P 500 rose 0.4%, and the Nasdaq Composite added 0.2%.

Worries over rising inflation and when the Federal Reserve might start to hike interest rates have weighed on markets recently, though major indexes are still close to record highs.

Corporate earnings will be back in focus again, with Tyson Foods (NYSE:TSN), WeWork and Warner Music Group among companies set to report quarterly results before the opening bell on Monday. Companies that have reported earnings so far this season have broadly beaten analysts’ expectations.

In pre-market trading, Dollar Tree was higher after The Wall Street Journal reported Friday that activist investor Mantle Ridge has a stake of at least $1.8 billion in the discount retailer and plans to push it to act to boost its share price.

Higher inflation has also suppressed the returns on government bonds recently, with the yield on the benchmark 10-year Treasury note slipping to 1.546% from 1.583%. 

Story by ProactiveInvestors