Stocks ended a three-session skid with a win on Friday, but look poised to resume their downward march this morning. The S&P 500 futures are trading nine points, or 0.3%, below fair value.
Overseas, equity markets in the Asia-Pacific region started the week on a mixed note, while European bourses are mostly higher--with the exception of Italy's MIB (-0.5%). Italian national elections on Sunday produced an inconclusive result, likely ushering in a period of political instability, as populist parties staged a strong showing.
U.S. Treasuries are relatively flat this morning, with the yield on the 10-yr note down one basis point at 2.85%. Meanwhile, the U.S. Dollar Index is up 0.2% at 90.11, and West Texas Intermediate crude futures are flat at $61.24 per barrel as energy executives and oil ministers from around the globe kick off CERAWeek in Houston.
In Washington, President Trump tweeted that his proposed tariffs on steel and aluminum imports, which he announced last week, will only come off if a "new and fair" NAFTA agreement is signed. Representatives from the U.S., Canada, and Mexico will be in Mexico City today, looking to wrap up the latest round of NAFTA negotiations.
Investors will receive just one piece of economic data today, the ISM Services Index for February (Briefing.com consensus 58.8), which will be released at 10:00 AM ET.
In U.S. corporate news:
- Qualcomm (QCOM 63.65, -1.09): -1.7% after requesting a U.S. government review of Broadcom's (AVGO 250.55, -0.32) takeover offer and thereby delaying a shareholder vote.
- Monster Beverage (MNST 55.09, +0.93): +1.7% after Deutsche Bank upgraded shares to 'Buy' from 'Hold.'
Reviewing overnight developments:
- Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei -0.7%, Hong Kong's Hang Seng -2.3%, China's Shanghai Composite +0.1%, India's Sensex +0.9%.
- In economic data:
- China's February Caixin Services PMI 54.2 (expected 54.3; last 54.7)
- Hong Kong's February Manufacturing PMI 51.7 (last 51.1)
- India's February Nikkei Services PMI 47.8 (last 51.7)
- Australia's January Building Approvals +17.1% month-over-month (expected 5.1%; last -20.6%). Q4 Gross Operating Profits +2.2% quarter-over-quarter (expected 1.6%; last -0.1%)
- In news:
- China's government set a 6.5% growth target for 2018, adding that prudent and neutral monetary policy will be maintained. The minimum wage will be adjusted "reasonably" while taxes on manufacturing and transportation will be lowered. Taxes for enterprises and individuals will be lowered by CNY800 billion while tariffs on vehicles and consumer goods will also be cut.
- Bank of Japan Governor Haruhiko Kuroda is expected to sail through tomorrow's confirmation hearings.
- Bank of Korea Governor Lee-Ju-yeol is expected to be reappointed to a second term.
- Major European indices trade on a mostly higher note while Italy's MIB (-0.5%) underperforms after yesterday's election produced an inconclusive result. Germany's DAX +0.6%, UK's FTSE +0.2%, France's CAC +0.1%.
- In economic data:
- Eurozone February Services PMI 56.2 (expected 56.7; last 56.7). January Retail Sales -0.1% month-over-month (expected 0.3%; last -1.0%); +2.3% year-over-year (consensus 2.1%; last 2.1%). March Sentix Investor Confidence 24.0 (expected 31.1; last 31.9)
- Germany's February Services PMI 55.3, as expected (last 55.3)
- UK's February Services PMI 54.5 (expected 53.3; last 53.0)
- France's February Services PMI 57.4 (expected 57.9; last 57.9)
- Italy's February Services PMI 55.0 (expected 57.3; last 57.7)
- Spain's February Services PMI 57.3 (expected 56.5; last 56.9)
- In news:
- Movimento Cinque Stelle received 32.3% of the vote in Italy, but the party is likely to take a backseat to a right-wing coalition composed of Matteo Salvini's Lega Nord, Silvio Berlusconi's Forza Italia, and Giorgia Meloni's Fratelli d'Italia. A coalition made up of Movimento Cinque Stelle and Lega Nord would likely invite speculation about Italy's exit from the euro, since Lega Nord opposes the single currency.
- In Germany, SPD voted in favor of forming a coalition with Angela Merkel's CDU/CSU after record negotiations.