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HomeAll NewsMost read newsBusiness Leaders Biography
Birthday : 06/28/1971
Place of birth : Pretoria - South Africa
Biography : Elon Reeve Musk is an entrepreneur and businessperson who founded 7 companies, which include: Tesla,

North American Morning Briefing: Stock Futures Tick Up After S&P 500 Hits Record

06/14/2021 | 06:09am EDT

MARKET WRAPS

Watch For:

Canadian Manufacturing Survey for April.

Opening Call:

Stock futures edged up Monday, pointing to a fresh record for the S&P 500 after it ended last week at an all-time high.

Futures tied to the S&P 500 ticked up less than 0.1%. The broad market gauge has climbed for three consecutive weeks. Nasdaq-100 futures added 0.2%, pointing to a moderate rise in technology stocks at the opening bell.

Stocks have ground higher amid an improving growth outlook in many developed countries and continued central bank support. All eyes will be on Federal Reserve policy makers' comments this week following a two-day meeting. Investors remain concerned that the Fed's evolving views on inflation and the labor market could prompt the central bank to scale back easy-money policies sooner than previously expected.

"Stock markets are by and large around all-time highs. We think there is still more upside there," Salman Baig, multiasset investment manager at Unigestion. "We're seeing clear signs that the recovery is sustainable."

Forex:

All eyes this week are on Wednesday's U.S. Federal Reserve decision but ahead of that various U.S. economic data will be released, including retail sales and industrial production, which could weigh on the dollar if weaker than expected, said Commerzbank.

"Following the strong previous rise these [data] are likely to have lost significant momentum," said currency strategist Thu Lan Nguyen. "Fiscal policy stimulus is fading and bottlenecks are making business more difficult," she said.

If this is the case, "US dollar euphoria might quickly ease again just ahead of the FOMC meeting."

RBC Capital Markets advises buying the dollar against the Swiss franc as its trade of the week before the Federal Reserve and Swiss National Bank policy meetings on Wednesday and Thursday respectively.

It targets 0.9170 in USD/CHF with a stop loss of 0.8900, compared to 0.8989 currently. With short-seller bets against the dollar having rebuilt in recent weeks and markets fully priced for the first U.S. interest rate rise by mid-2023, the "balance of risk favors being long dollar" into the Fed's meeting, RBC's Adam Cole said.

The Fed's new economic projections could bring forward rate rise expectations, he said. Meanwhile, the SNB will likely reiterate that the franc is highly valued and it's prepared to intervene, he said.

Bitcoin jumped 6.6% from its level at 5 p.m. ET Friday to trade around $39,300, according to CoinDesk. Elon Musk tweeted Sunday that Tesla will resume accepting the cryptocurrency as a form of payment when miners use more clean energy.

Sterling weakened following reports the U.K. government is set to announce that its plan to fully ease England's lockdown on June 21 will be delayed by four weeks.

Prime Minister Boris Johnson is expected to confirm the delay at a news conference around 1700 GMT.

"It is unlikely that the formal announcement of the delay will trigger any sharp currency movements, as it won't come as a shock," ActivTrades analyst Ricardo Evangelista said. "However, should Johnson surprise the markets by confirming the end of restriction on June 21, the pound would be likely to reverse this morning's losses."

Bonds:

In bond markets, the yield on the benchmark 10-year Treasury note edged up to 1.464% from 1.462% on Friday. The yield, which moves inversely to price, has dropped for four consecutive weeks, in part because foreign investors and pension funds are boosting their holdings of U.S. government bonds.

"Fundamentally, bond yields should be much higher," Mr. Baig said. "You're seeing higher inflation being priced into cyclical commodities, growth being priced higher in equities, but bond yields are still pricing fairly muted growth and inflation."

Another reason for the low yields is that money managers believe Fed officials will hold off on tapering until the economy is much stronger, said Lale Akoner, market strategist BNY Mellon Investment Management.

"What the Fed is saying around transitory price pressures are resonating in the bond market," said Ms. Akoner.

Commodities:

Oil prices were higher, with DNB Markets' Helge Andre Martinsen citing positive equity markets and a relative lack of oil-specific news. Both benchmarks are on course to break multiyear highs, with Brent settling Friday at its highest since April 2019 and WTI closing at its highest since October 2018 as demand continues to improve despite high coronavirus rates in the developing world.

Slow vaccination rates in emerging economies means oil demand in 3Q and 4Q will be lower than expected, the IEA said on Friday. Demand will hit its pre-pandemic high in 4Q next year, the watchdog added.

TODAY'S TOP HEADLINES

Bitcoin on the Balance Sheet Is an Accounting Headache for Tesla, Others

Elon Musk's curious Twitter war with bitcoin is expected to hit Tesla Inc.'s bottom line this quarter.

Mr. Musk is widely blamed by investors for starting the digital currency's most punishing slide of the year after announcing on Twitter that Tesla would stop accepting bitcoin as payment for its electric vehicles. He added fuel to the fire earlier this month, tweeting breakup memes with "#bitcoin" and a broken-heart emoji. Bitcoin has slumped 30% since the original May 12 tweet.

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European Privacy Ruling Could Mean More Scrutiny of Companies

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High-speed trader Virtu Financial Inc. is pushing back against critics in Washington who say the stock market is rigged against small investors.

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On Wednesday, Facebook's head of global advertising sales Carolyn Eversonsaid she was leaving the company after more than a decade. Just a few months ago, Facebook's revenue chief David Fischer said in a Facebook post that he would be leaving the company later this year.

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Boeing Offloads Unclaimed MAX Jets as Air Travel Recovers

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Fed Officials Could Pencil In Earlier Rate Increase at Meeting

WASHINGTON-Federal Reserve officials could signal this week that they anticipate raising interest rates sooner than previously expected following a spate of high inflation readings.

In March, the last time they released quarterly economic forecasts, most officials expected to keep the Fed's benchmark interest rate near zero through 2023 to encourage the economy's recovery from the pandemic. Officials are set to release updated projections Wednesday after a two-day policy meeting.

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G-7 Leaders Rally to Biden's Call to Challenge China

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A 25-page joint statement released by leaders of the G-7 nations on Sunday-covering issues ranging from pandemic recovery to the global economy, tax, trade and girls' education-asked China "to respect human rights and fundamental freedoms, especially in relation to Xinjiang and those rights, freedoms and high degree of autonomy for Hong Kong." The same section of the statement said the G-7 would continue to consult on how to challenge China's behavior in the global economy.

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Eurozone Industrial Production Growth Beat Expectations Despite Supply Chain Woes

Eurozone industrial production growth in April was higher than expected despite supply bottlenecks hindering activity in many sectors, Eurostat data showed.

Output from factories, mines and utilities across the single-currency area rose by 0.8% over the previous month in April, the EU statistics agency said Monday. This was above forecasts from economists polled by The Wall Street Journal, who had expected a 0.3% increase.

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(MORE TO FOLLOW) Dow Jones Newswires

06-14-21 0608ET