U.S. Stocks Waver, Oil Price Rebound Likely to Persist

Barry Adams
27 Jun, 2022
New York City

U.S. stocks traded sideways in early trading after a week of strong gains following steep declines in the last four months. 

The popular indexes are likely to close the first-half with double-digit losses, the worst decline since 1971. 

The S&P 500 index added 0.1% to 3,916.17 and the Nasdaq Composite index declined 0.08% to 11,597.81. 

In subdued trading stocks braved to climb higher fighting the worries of looming economic slowdown or a recession and potential rate hikes. 

New orders for durable goods rose 0.7% in May after rising 0.4% in April, the Commerce Department said on Monday. 

Excluding volatile transportation orders, durable goods orders rose 0.7% after rising 0.2% in April. 

Futures of crude oil gained $1.83 to $109.45 a barrel and natural gas edged up a fraction to $6.23 a unit. 

The Ukraine war is likely to persist well into 2023 as neither Russia nor Ukraine are discussing peaceful settlement. 

Energy prices are likely to remain higher on the expectations of a long a war combined with the slow rebound in manufacturing activities in China.   

Ukraine's elevation to the European Union candidacy status is seen more as a signaling step rather than accession to the union in the near future. 

Albania and Turkey have the EU candidacy status for nearly two decades with no clear deadline. 

The yield on 10-year U.S. Treasury notes edged up a fraction to 3.175% despite the cooling expectations of faster rate hikes next month. 

On the earnings front, Nike is scheduled to release earnings after the market close today followed by results later in the week from Walgreens, Constellation Brands, General Mills, and Bed Bath & Beyond.  

European Markets Lose Early Momentum 

European markets advanced in volatile trading and commodities prices traded higher on the expectations of rising demand from China. 

The indexes in the region traded at a two-week high on the easing of aggressive rate hike worries.  

The U.S. dollar edged lower and one euro fetched $1.0556. 

The DAX index increased 0.6% to 13,197.61, the CAC 40 index declined 0.3% to 6,055.47, and the FTSE 100 index advanced 0.5% to 7,244.03. 

The indexes opened sharply higher following a surge in New York in Friday's trading and the S&P 500 index closed up more than 3%. 

European markets began to lose momentum after the first 45 minutes of trading in Frankfurt, Paris, and London. 

Higher commodities prices kept the positive market sentiment in check and the elevated wholesale prices also affected the market sentiment. 

Spain's producer price index in May soared 43.6% in May following 44.5% in April, the statistical office INE reported on Monday. 

Finland's producer prices accelerated in May to 31.7% after rising at 29.2% in April, according to data from Statistics Finland on Monday. 

Norway's retail sales fell 8.8% in May on an annual basis after adjusting for seasonality factors and faster than 2.4% decline in April, Statistics Norway reported today. 

Commodities stocks led the gainers in European trading. 

Antofagasta, Angle American, and Glencore advanced between 1% and 2%. 

BP Plc and Shell Plc added more than 1%. 

Intesa Sanpaolo jumped 1.4% after the bank received an approval from the supervisory committee of the European Central Bank to buy back 3.4 billion euros of its own shares. 

Sandvik AB closed up 3.2% to 172.95 Swedish kroner after the company agreed to acquire Portugal-based  Frezigest, SGPS. 

Prosus NV soared 13.8% to 60.36 euros after the company said it plans to sell its $134 billion stake in China-based Tencent, the parent of Wechat.  

 

Asian Markets Close at 2-week High 

Markets in Asia closed higher tracking the gains in the U.S. markets. 

The Nikkei index soared after tech stocks led the gainers and Softbank soared 3.7 and. ship builders closed higher. 

Indexes in China advanced after profits of large industrial companies declined less than expected in May 6.5% after falling at 8.5% in April, the National Bureau of Statistics said on Monday.   

The Nikkei index increased 1.4% to 26,871.27, the Hang Seng index soared 2.4% to 22,229.52, and the Sensex index advanced 0.8% to 53,161.28.  

The yen near two-decade low and one U.S. dollar fetched 135.45 and record high 78.45 rupees.