Monday July 11th

11-07-2016

Watch out for record highs on Wall Street on Monday

U.S. stock index futures gained on Monday, as global equity markets cheered hopes of more monetary stimulus in Japan and strong jobs data from the U.S. Friday's U.S. non-farm payrolls showed 287,000 jobs were created in June, beating expectations. The unemployment rate read 4.9 percent, also better than forecast.  Having rallied on Friday, the S&P 500 is close to setting record highs. The index ended at 2129.90 points on Friday, not far off an all-time closing high of 2,130.82, set on May 21, 2015. The benchmark index is also within striking distance of its all-time intraday high of 2,134.72, set on May 20, 2015. "Friday's U.S. labor report was a great source of comfort to markets," Kit Juckes, strategist at Societe Generale, said in a note on Monday. On Sunday, Japan's ruling coalition won a landslide victory in upper house elections. This makes it likelier Prime Minister Shinzo Abe will be able to push through further monetary easing measures. A stimulus package of at least 10 trillion yen ($97.9 billion) is expected. Japan's Nikkei 225 closed up 601.84 points, or 3.98 percent, at 15,708.82, while the Topix closed up 45.91 points, or 3.79 percent, at 1,255.79. Those gains came as the yen relatively weakened against the dollar, trading at 101.88 as of 3:12 p.m., compared with the dollar earlier fetching as little as 100.42 yen. Hong Kong's shares joined the regional rally, with the Hang Seng Index up 1.52 percent in late-afternoon trade. On the mainland, the Shanghai Composite added 7.94 points, or 0.27 percent, to 2,996.04, while the Shenzhen composite dropped 11.30 points, or 0.56 percent, to 2,000.97. In South Korea, the Kospi added 25.44 points, or 1.3 percent, to 1,988.54. No major economic data are due from the U.S. on Monday. However, earnings season will kick off with results from Alcoa, which is no longer part of the Dow Jones Industrial Average. Oil prices came off lows on Monday morning, but remained under pressure on signs that U.S. shale drillers have adapted to lower prices and on renewed indications of economic weakness in Asia. Brent crude was trading at $46.77 per barrel by 8:38 a.m. ET (1238) GMT, up 1 cent and off a session low of $45.90. U.S. West Texas Intermediate (WTI) crude was up 3 cents at $45.44 a barrel, after earlier falling as low as $44.53. Gold fell on Monday as strong U.S. jobs data and the prospect of more monetary stimulus from some central banks boosted stock markets, while the dollar pushed higher against the euro, while the dollar pushed higher against a basket of currencies. Simmering concerns over the prospect of Britain leaving the European Union kept gold underpinned, however, and it is still within $20 of last week's more than two-year high. The UK's vote to leave the currency bloc has buffeted markets in recent weeks. Spot gold was down 0.6 percent at $1,358.60 an ounce, having touched its highest since March 2014 last week at $1,374.91 an ounce.