Market Snapshot: U.S. stock futures point to further Wall Street gains on view bad news is good news


U.S. stock futures pointed to an extension of last week’s gains, buoyed by data showing a slowing economy that in turn could limit the magnitude of Federal Reserve rate hikes.

What’s happening
  • Futures on the Dow Jones Industrial Average YM00, +0.29% rose 120 points, or 0.4%, to 31607.
  • Futures on the S&P 500 ES00, +0.41% gained 20.75 points, or 0.5%, to 3937.
  • Futures on the Nasdaq 100 YM00, +0.29% increased 82.75 points, or 0.7%, to 12223.

Last week, the S&P 500 SPX, +3.06% jumped 6% to snap a three-week losing run. The Dow Jones Industrial Average DJIA, +2.68% rose 5%, and the tech-heavy Nasdaq Composite COMP, +3.34% gained 7%.

What’s driving markets

Strategists at Credit Suisse say bond yields may have seen their peak, particularly for Treasury-inflation protected securities, which in turn means the dollar DXY, -0.31% is close to its summit. They say their lead indicators are consistent with 0% GDP growth, as evidenced by the collapse in housing affordability, the weakness of corporate confidence and the weakness in the employment gauge of the Institute for Supply Management manufacturing index.

JPMorgan quantitative strategist Marko Kolanovic published a note saying the market could rise 7% this week, due to the need for portfolios to rebalance as the month, quarter and first half closes. That effect already played out near the end of the first quarter, and near the end of May.

Group of Seven economic powers are meeting in Germany where they expect to announce an agreement on a price cap on Russian oil.

Durable-goods orders and pending home sales data highlight Monday’s economic calendar.

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