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U.S. stock futures pointed to a rise at the open Monday, keeping the Dow Jones Industrial Average on track for an April gain with one session left in the month.
Traders will be reacting to Sprint Corp. and T-Mobile US Inc.’s planned merger and other deal news, as well as to economic reports, with releases on inflation and the housing market on tap.
What are the main benchmarks doing?
Dow futures added 128 points, or 0.5%, to 24,411, while S&P 500 futures rose by 7.85 points, or 0.3%, to 2,679.25. Nasdaq-100 futures climbed by 28.75 points, or 0.4%, to 6,697.50.
On Friday, the Dow S&P 500 and Nasdaq Composite all finished little changed for the session and in the red for the week.
The Dow is on track for a monthly rise of 0.9% as of Friday’s close, cutting its year-to-date loss to 1.7%. The S&P is up 1.1% in April, but down 0.1% in 2018, and the tech-laden Nasdaq has tacked on 0.8% this month, stretching its year-to-date advance to 3.3%.
What’s driving markets?
April’s gains have come as more than half of the S&P 500’s companies have posted first-quarter results, with 79% of those names beating Wall Street’s expectations for earnings, according to FactSet data.
But strategists say the market’s advance has been limited by other factors, including worries about protectionism and geopolitics, as well as concerns that the days of synchronized global economic growth are over.
The prospect of a trade war between the U.S. and China is one of those worries, so traders are likely to watch U.S. Treasury Secretary Steven Mnuchin’s visit to China this week for high-level trade talks.
Investors also have been tracking the 10-year Treasury yield , which last week climbed above 3% for the first time since 2014, but then slipped back under that psychologically important level. A jump for that benchmark rate tends to peel money away from riskier assets such as equities.
What are strategists saying?
“Investors should prepare for a barrage of ‘sell in May, and go away’ financial news articles this week, and we admit it’s been sound advice if an investor followed it without question for the last 68 years,” said Ari Wald, an Oppenheimer & Co. technical analyst, in a note.
“Since 1950, the S&P 500 has averaged a mere 1.4% gain between the months of May and October vs. a 7.2% gain between November and April,” Wald added. He also said his firm expects the S&P 500 can draw buyers around the 2,610 level and eventually will rally toward 2,800 or 2,900.
Which stocks are in focus?
Sprint Corp. shares fell 12% in premarket action following news Sunday that the wireless carrier plans to merge with rival T-Mobile US Inc.
T-Mobile’s stock dropped 2% premarket. The two companies have struck an all-stock $26 billion merger that, if allowed by antitrust enforcers, would leave the U.S. wireless market dominated by three national players. It’s the third time in recent years that the two rivals have attempted the combination.
In other deal news, Walmart Inc. shares edged up 0.7% in thin premarket action after the retail giant’s U.K. arm, Asda Group Ltd., agreed to merge with British supermarket chain J Sainsbury PLC . The combined entity would have annual revenue of about $69 billion.
Marathon Petroleum Corp. has confirmed that it plans to buy rival refinerAndeavor in a $35.6 billion deal. Andeavor’s stock jumped 17% premarket.
Timeshare company Marriott Vacations Worldwide Corp. said it has entered into a $4.7 billion deal to acquire peer ILG Inc. , whose shares rose 5.7% in premarket trading.
Logistics company Prologis Inc. has agreed to buy competitor DCT Industrial Trust Inc. for $8.4 billion including debt, as a surge in e-commerce ramps up demand for warehouses and distribution centers. DCT’s stock climbed 12%.
Shares in burger chain McDonald’s Corp. rose 3.5%, after reporting better-than-expected profit and revenue for the first quarter.
Metals companies Arconic Inc.‘s stock fell in the premarket after the metals company reduced its outlook but produced results that outpaced forecasts.
U.S.-listed shares in WPP PLC jumped 6.6% in premarket trade after the advertising giant’s first-quarter results beat expectations, in the first earnings report after the departure of Martin Sorrell as chief executive.
AK Steel Holding Corp. saw its shares rise after reporting first-quarter results, with revenue coming in better than expected. The mining company also offered a bullish outlook, saying that it expected market conditions to improve.
Which data are in focus?
The PCE index, the Federal Reserve’s preferred inflation gauge, rose to 2% year over year from a 1.7% pace in February, hitting the central bank’s target for the first time in a year.
The inflation figures are included in the government’s monthly report on consumer spending. Outlays rose 0.4% last month to mark the first advance since the end of 2017.
A report on Chicago-area manufacturing for April is due at 9:45 a.m.
Which economic reports are on tap?
- March readings on personal income, consumer spending and core inflation are due at 8:30 a.m. Eastern Time.
- An April release on the Chicago area’s business conditions is expected at 9:45 a.m. Eastern.
- A March report on pending home sales is due at 10 a.m. Eastern.
Check out: MarketWatch’s Economic Calendar
On the Federal Reserve front, no speeches are scheduled. The central bank’s policy makers are slated to start a two-day meeting on Tuesday, and they are expected on Wednesday to leave interest rates on hold and signal no change to a tightening path of two more rate hikes in 2018.
What are other markets doing?
European stocks were mostly higher, while Asian markets closed with gains.
Gold futures and oil futures lost ground, as the ICE U.S. Dollar Index advanced.