Market Snapshot: U.S. stocks futures nudge higher as bank sector stress wanes


U.S. stock futures were a tad firmer on Monday as traders welcomed waning signs of banking sector stress.

How are stock-index futures trading
  • S&P 500 futures ES00, +0.32% rose 8 points, or 0.2%, to 4009
  • Dow Jones Industrial Average futures YM00, +0.31% added 70 points, or 0.2%, to 32504
  • Nasdaq 100 futures NQ00, +0.12% climbed 7 points, or 0.1%, to 12897

On Friday, the Dow Jones Industrial Average DJIA, +0.41% rose 132 points, or 0.41%, to 32238, the S&P 500 SPX, +0.56% increased 22 points, or 0.56%, to 3971, and the Nasdaq Composite COMP, +0.31% gained 37 points, or 0.31%, to 11824.

What’s driving markets

Stock futures were firmer as investors welcomed signs that recent anxiety surrounding the banking sector is waning.

Europe’s Stoxx 600 Banks index was up 2% as Deutsche Bank DBK, +3.89%, source of Friday’s worries, rebounded 5%.

News that First Citizens FCNCA, -1.11% has agreed to buy the deposits and loans of failed Silicon Valley Bank also is helping underpin sentiment.

“With Silicon Valley Bank’s deposits and loans now housed in longer term accommodation in the U.S., a calm of sorts has descended on the banking sector…Shunting parts of the failed bank off to a new owner may give the regulator more capacity to deal with problems still threatening to pop up elsewhere, particularly with U.S. regional banks,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Mohamed El-Erian, adviser to Allianz and Gramercy, welcomed the calmer mood, but noted that underlying uncertainty may linger unless signs of stress in the market for insuring ban debt, known as credit default swaps, dissipated further.

U.S equities have been particularly choppy in recent weeks as traders have expressed anxiety about banking sector stress while welcoming the lower bond yields those concerns have delivered.

This has left the S&P 500 stuck near the middle of the 3800-4200 range it has held for four months, and leaves the Wall Street barometer “stuck on either side of its 200-day moving average”, notes Jonathan Krinsky, chief technical strategist at BTIG.

Source BTIG.

There are no notable U.S. economic updates set for release on Monday, but there will be some Fed-speak when Governor Philip Jefferson is due to deliver comments at 5 p.m. Eastern.

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