Stocks May Tick Higher As Commodities Rebound

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Monday, although they are off their early highs. An economic report released short while ago showed that personal income rose slightly more than expected in February, although downward revision to January's growth took the sheen off in line-consumer spending growth. On a quiet day, when most European markets remain closed, Asian stocks ended mostly lower, although Japan did see some strength on yen weakness.

The corporate news flow for the day is very light, in alignment with the subdued economic calendar. Oil and the rest of the commodities are back on their way higher, as the dollar rally loses steam. The domestic markets may receive some support from rebounding commodities, if they manage to sustain the gains. The pending home sales data may also offer some directional cues.   U.S. stocks moved lower during the holiday-shortened week ended March 24th, snapping five straight weeks of gains. Fears of another Fed rate hike and volatility in the prices of commodities proved to be the undoing of the markets.    Last Monday, the major averages kept the 5-week rally alive, although the gains were only modest. Some M&A announcements and higher crude oil prices helped offset profit-taking related weakness. After trading with steep losses early on Tuesday amid geopolitical concerns raised by explosions in Brussels, the averages recovered to end mixed.    Notwithstanding the release of positive new home sales data, the averages retreated on Wednesday, as the price of crude oil turned lower. With the Fed rhetoric pointing to a rate hike in April, stocks came under pressure on Thursday, although they did well to recoup their losses by the close of trading and finish mixed.    For the week ended March 24th, the Dow Industrials fell 86.57 points or 0.49 percent to 17,516, the S&P 500 Index was down 13.64 points or 0.67 percent at 2,036 and the Nasdaq Composite lost 22.15 points or 0.46 percent before ending at 4,774. 

The Dow and the S&P 500 Index are still in the green for the year, while the Nasdaq Composite is trading with a loss for the year.    Currency, Commodity Markets    Crude oil futures for May delivery are rising $0.32 to $39.78 a barrel after declining in the week ended March 24th. Last week, oil fell about 4 percent to $39.46 a barrel, with bearish weekly EIA crude oil inventory data and easing supply concerns weighing on the commodity.    Gold futures, which slumped $32.70 or 2.61 percent to $1,221.60 an ounce in the previous week, are currently declining $0.80 to $1,220.80 an ounce. Gold has lost much of its luster in recent weeks, as the precious metal has been under pressure for three straight weeks. The latest week saw the worst weekly loss amid Fed rate hike expectations, which propped up the dollar.    Among currencies, the U.S. dollar advanced against most currencies in the week ended March 24th. The buck rallied 1.53 percent against the yen before ending the week at 113.08 yen and added a more modest 0.91 percent against the euro to $1.1167. For much of last week, the dollar piggy-backed on Fed rate hike expectations.    The U.S. dollar is currently trading at 113.40 yen and it is worth $1.1174 a euro.    Asia    The major Asian markets that were open for trading ended lower as commodities continued to see weakness. However, the Japanese market advanced as the yen weakened. The Australian, New Zealand and Hong Kong markets were closed for 'Easter Monday' holidays.    Japan's Nikkei 225 Index opened higher and moved sideways till late trading. After declining sharply in late trading and briefly turning negative, the index recovered and ended up 131.62 points or 0.77 percent at a 3-week high of 17,134, but off the day's high of 17,168.    A majority of stocks advanced. Utility, marine transportation, chemical, telecom, financial, retail, export, resource, pharma, food and construction stocks all gained ground.     China's Shanghai Composite Index lost 21.61 points or 0.73 percent before ending at 2,958. South Korea's Kospi and Taiwan's Weighted Average were down 0.06 percent and 0.17 percent, respectively.     Europe    The major European markets remain closed for Easter Monday.    U.S. Economic Reports    The unfolding week's economic calendar is heavily loaded both in terms of quantity and quality. Headlining the week's economic news flow will be two separate labor market reports, one on private payrolls due on Wednesday and another on non-farm payrolls scheduled for Friday. The weekly jobless claims data may also be scanned for additional insights into the labor market.    Some consumer readings such as the Commerce Department's personal income and outlays report for February and the results of two separate consumer confidence surveys by the Conference Board and the University of Michigan may also be in the spotlight.     Also on the radar will be the National Association of Realtors' pending home sales report for February, the results of the S&P/Case-Shiller house price survey for January, the results of Institute for Supply Management's national manufacturing survey and MNI Indicators' regional Chicago business barometer survey, both for March, Markit's final U.S. manufacturing PMI for March and some Fed speeches.     Traders may also take cues from the monthly auto sales due to be released on Friday. The Commerce Department's construction spending report for February, the Dallas Federal Reserve's regional manufacturing survey for March and Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.    Personal income in the U.S. increased by slightly more than expected in the month of February, according to a report released by the Commerce Department. The report said personal income rose by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected income to tick up by 0.1 percent.

The Commerce Department also said personal spending inched up by 0.1 percent in February, matching the downwardly revised uptick seen in the previous month. The slight increase in spending matched economist estimates, although spending in January was downwardly revised from the originally reported 0.5 percent growth.   At 10 am ET, the National Association of Realtors is due to release its pending home sales index for February. The consensus estimate calls for a 1.5 percent month-over-month increase in pending home sales for the month.    In January, pending home sales fell 2.5 percent month-over-month, while economists expected a 0.5 percent increase. However, December's reading was upwardly revised to show 0.9 percent growth compared to the 0.1 percent growth estimated initially. Sales were down in three of the four geographic regions, while the South reported sales growth.    The Dallas Federal Reserve is set to release its general activity index for March at 10:30 am ET. In February, the index was at -31.8.     The Treasury Department is scheduled to announce the results of its auction of 2-year notes at 1 pm ET.    Stocks in Focus    Schlumberger (SLB) and Cameron International (CAM) announced that the Chinese Ministry of Commerce has cleared their proposed merger without any conditions. The companies now expect the deal to close on April 1st, 2016.    UDR (UDR) announced a 6 percent increase in its annualized common stock dividend.    Gamestop (GME) reported better than expected non-GAAP earnings per share for its fourth quarter and its net sales rose 1.4 percent to $3.53 billion. For 2016, the company expects sales and earnings that could be qualified as lackluster.