Traders May Continue To Look For Bargains After Last Friday's Rebound

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to extend the notable rebound seen during last Friday's session.

Traders may continue to look to pick up stocks at relatively reduced levels, as the jump seen in the previous session only partly offset the steep drop seen earlier in the week.

Concerns about valuations and the outlook for interest rates weighed on the markets for much of last week, dragging the Nasdaq and the S&P 500 down to their lowest closing levels in over two months last Thursday.

Positive sentiment may also be generated amid signs of progress toward an agreement to end the protracted war between Russia and Ukraine.

Secretary of State Marco Rubio said "tremendous progress" had been made in talks with Ukrainian officials, calling the sticking points on the Trump administration's peace proposal "not insurmountable."

Overall trading activity may be somewhat subdued, however, as traders await the release of long-delayed U.S. economic data in the coming days.

Traders are likely to keep a close eye on reports on retail sales, producer prices and durable goods orders in the month of September.

While the data is more backward looking than preferred, the reports could still impact the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting in December.

Stocks showed a lack of direction early in the session on Friday but moved notably higher over the course of the trading day. The major averages all showed strong moves to the upside following the substantial downturn seen during Thursday's session.

The major averages pulled back well off their best levels going into the end of the day but remained firmly positive. The Dow surged 493.15 points or 1.1 percent to 46,245.41, the Nasdaq advanced 195.03 points or 0.9 percent to 22,273.08 and the S&P 500 jumped 64.23 points or 1.0 percent to 6,602.99.

Despite the rebound on the day, the major averages all posted steep losses for the week. The Nasdaq plunged by 2.7 percent, the S&P 500 tumbled by 2.0 percent and the Dow slumped by 1.9 percent.

The strength that emerged on Wall Street may partly have reflected renewed optimism about the Federal Reserve lowering interest rates at its next monetary policy meeting in December.

CME Group's FedWatch Tool indicated the chances of a quarter point rate cut at the Fed's December meeting soared to 71.5 percent from just 39.1 percent on Thursday.

The increased bets on a rate cut next month come following dovish remarks by New York Federal Reserve President John Williams.

During remarks at the Central Bank of Chile Centennial Conference, Williams described monetary policy as being "modestly restrictive" and said he sees "room for a further adjustment" to rates in the near term.

However, it is worth noting that the minutes of the latest Fed meeting revealed officials have "strongly differing views" about whether to continue cutting rates in December.

Potentially adding to the optimism about the outlook for interest rates, the University of Michigan released a report showing decreases by both year-ahead inflation and long-run inflation expectations in November.

The advance by stocks may also have reflected bargain hunting on the final day of a difficult week for the markets, which saw the Nasdaq and the S&P 500 tumble to their lowest levels in over two months.

Housing stocks turned in some of the market's best performances on the day, with the Philadelphia Housing Sector Index soaring by 4.0 percent.

Substantial strength was also visible among airline stocks, as reflected by the 3.0 percent surge by the NYSE Arca Airline Index.

Biotechnology, oil service, healthcare and computer hardware stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are inching up $0.02 to $58.08 a barrel after plunging $0.94 to $58.06 barrel last Friday. Meanwhile, after climbing $19.50 to $4,079.50 an ounce in the previous session, gold futures are edging up $3.10 to $4,082.60 an ounce.

On the currency front, the U.S. dollar is trading at 156.92 yen versus the 156.39 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1538 compared to last Friday's $1.1511.

Asia

Asian stocks ended mixed in thin trading on Monday, with Japanese markets closed for a holiday. Regional sentiment was underpinned somewhat by hopes for a Federal Reserve rate cut in December and easing Ukraine-Russia tensions.

Gold dropped for a third consecutive session as the dollar hovered near six-month highs ahead of a slew of U.S. economic data due this week, including reports on retail sales, producer prices and weekly jobless claims.

Investors also awaited cues from the Thanksgiving holiday shopping season and earnings results from retailers such as Kohl's, Dick's Sporting Goods, Best Buy, Petco and Urban Outfitters.

Oil prices were little changed in Asian trading after falling nearly 3 percent last week on ceasefire speculation around the Russia/Ukraine war.

After meeting Ukrainian officials in Geneva, U.S. Secretary of State Marco Rubio said that negotiators made "significant" advances on the U.S.-backed 28-point plan and that the United States was giving Ukraine flexibility beyond Trump's proposed November 27 response deadline.

China's Shanghai Composite Index finished little changed at 3,836.77 as the China-Japan spat continued, with China escalating the dispute over Taiwan at the UN and Japan's defense minister visiting a military base close to Taiwan.

Chip-related stocks rose following reports that the Trump administration was considering allowing sales of Nvidia's H200 artificial intelligence chips to China.

Hong Kong's Hang Seng Index surged 2.0 percent to 25,716.50. Alibaba Group Holding shares jumped 4.7 percent after the e-commerce leader said it's newly launched Qwen app has seen explosive growth, surpassing 10 million downloads within a week.

Seoul stocks ended slightly lower as investors waited for clearer signals on the Federal Reserve's policy outlook. The Kospi ended down 0.2 percent at 3,846.06, giving up early gains and extending losses for a second straight session after offshore investors turned net sellers in the afternoon.

Australian markets rallied, with tech, real estate and healthcare stocks leading gains after a Fed official signaled that there are potentially more rate cuts to come.

The benchmark S&P/ASX 200 Index shot up 1.3 percent to 8,525.10, while the broader All Ordinaries index settled 1.3 percent higher at 8,800.40.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index gained 0.6 percent to close at 13,499.85, recouping losses from last week.

Europe

European stock have moved omstly higher on Monday, with hopes for a Federal Reserve rate cut in December and signs of progress on a Ukraine peace plan helping boost investor sentiment.

Meanwhile, traders shrugged off the results of a survey showing German business morale unexpectedly deceased in November.

The ifo institute said its business climate index fell to 88.1 in November from 88.4 in October. Economists had expected a score of 88.6.

While the German DAX Index is up by 0.8 percent, the U.K.'s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.1 percent.

German pharma company Bayer has moved sharply higher after reporting positive study results for its anticoagulant asundexian.

BHP Group has also moved to the upside. The mining giant confirmed it held preliminary discussions with rival miner Anglo American but said it was now "no longer considering a combination of the two companies." Shares of the latter were up half a percent.

Meanwhile, Julius Baer has tumbled. The Swiss private bank said it has booked an additional 149 million Swiss francs in loan-loss provisions.

U.S. Economic News

The Treasury Department is scheduled to announce the results of this month's auction of $69 billion worth of two-year notes at 1 pm ET.