Futures Pointing To Modestly Higher Open On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher opening on Monday following the lackluster performance seen in the previous session.

The markets may continue to benefit from recent upward momentum, which has helped propel stocks to new record highs despite a lack of major catalysts.

Stocks have trended higher throughout much of the past month, as traders express optimism about a phase one U.S.-China trade deal.

Trading activity is likely to remain relatively subdued, however, as the upcoming New Year's Day holiday is likely to keep some traders on the sidelines.

Stocks showed a lack of direction throughout the trading session on Friday as many traders remained away from their desks following Christmas. The major averages spent the day bouncing back and forth across the unchanged line before closing mixed.

While the Dow and the S&P 500 crept up to new record closing highs, the Nasdaq edged down 15.77 points or 0.2 percent to 9,006.62. The Dow edged up 23.87 points or 0.1 percent to 28,645.26 and the S&P 500 inched up 0.11 points or less than a tenth of a percent to 3,240.02.

For the holiday-interrupted week, the Nasdaq advanced by 0.9 percent, while the Dow and the S&P 500 climbed by 0.7 percent and 0.6 percent, respectively.

Stocks have moved steadily higher throughout much of the past month, rarely showing significant moves to the upside but also refraining from the pullbacks typically seen as traders cash in on recent strength.

The perpetual advance comes as the news the U.S. and China reached an agreement on a phase one trade deal has helped lift some of the uncertainty hanging over the markets.

Buying interest has remained somewhat subdued, however, as the details of the deal are still unknown and the trade dispute between the U.S. and China will persist even after the agreement is signed.

As the same time, the somewhat stifled nature of the rally has made traders reluctant to take profits amid concerns about missing out on any further upside.

Many traders remained away from their desks following the Christmas holiday on Wednesday and the New Year's Day holiday next Wednesday.

A lack of major U.S. economic data also kept traders on the sidelines as they attempt to deduce what is in store for the economy in the New Year.

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Tobacco stocks showed a substantial move to the upside, however, with the NYSE Arca Tobacco Index surging up by 2.1 percent to a four-month closing high.

The strength in the sector came amid news the FDA has officially changed the federal minimum age to purchase tobacco products, including e-cigarettes, from 18 to 21.

On the other hand, energy stocks saw notable weakness on the day, with the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index falling by 1.6 percent and 1.1 percent, respectively.

Commodity, Currency Markets

Crude oil futures are rising $0.38 to $62.10 a barrel after inching up $0.04 to $61.72 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,514.90, down $3.20 from the previous session's close of $1,518.10. On Friday, gold rose $3.60.

On the currency front, the U.S. dollar is trading at 109.21 yen compared to the 109.44 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1186 compared to last Friday's $1.1177.

Asia

Asian stocks ended mostly lower on Monday as investors exercised caution amid rising political tensions in Northeast Asia and violence in the Middle East.

North Korean leader Kim Jong Un called for "positive and offensive measures" to ensure security ahead of a year-end deadline he has set for denuclearization talks with the United States.

The U.S. military carried out air strikes in Iraq and Syria on Sunday against Iran-backed militia group, while Turkey announced its plan to send forces to Libya to assist Al-Seraj government.

Chinese stocks rallied after the country's central bank ordered lenders to adopt a new loan-pricing regime for all credit from next year, a move that could lower costs for some of the 152 trillion yuan (S$29.4 trillion) in yuan-denominated outstanding loans held by financial institutions and boost economic growth.

The benchmark Shanghai Composite Index climbed 34.99 points, or 1.2 percent, to 3,040.02, while Hong Kong's Hang Seng Index ended up 0.3 percent at 28,319.39.

Japanese stocks fell sharply as caution prevailed ahead of the New Year holidays. Japanese financial markets will be closed from Tuesday through Friday.

The benchmark Nikkei 225 Index dropped 181.10 points, or 0.8 percent, to 23,656.62 but ended 2019 with a gain of 18 percent on optimism about a U.S.-China trade deal. The broader Topix closed 0.7 percent lower at 1,721.36.

Casual clothing shop operator Adastria plunged 6.7 percent after its quarterly earnings and profit guidance for the year ending in February fell short of market expectations.

Australian markets edged lower as traders looked to square up positions ahead of the year-end. The benchmark S&P/ASX 200 Index dropped 16.80 points, or 0.3 percent, to 6,804.90, while the broader All Ordinaries Index ended down 14.70 points, or 0.2 percent, at 6,921.60.

Miners paced the decliners, with BHP, Rio Tinto and Fortescue Metals Group falling between 0.6 percent and 1.1 percent.

Banks ANZ and Commonwealth ended little changed with a positive bias and Westpac rose 0.3 percent while NAB eased 0.2 percent.

Energy stocks such as Woodside Petroleum and Santos finished marginally lower despite oil prices hitting three-month highs on Friday.

Shares of Sydney Airport slumped 4.3 percent and Transurban Group lost 2.6 percent on going ex-dividend.

Seoul stocks closed lower in the final trading session of 2019. The benchmark Kospi slid 6.54 points, or 0.3 percent, to end at 2,197.67 after official data showed industrial production in the country declined a seasonally adjusted 0.5 percent month-on-month in November.

That follows the 1.7 percent drop in October. On a yearly basis, industrial production dipped 0.3 percent after dropping 2.5 percent in the previous month.

Europe

European stocks have fallen in cautious trade on Monday as investors awaited the final details of a promised trade deal between the United States and China, which is expected to be signed in January.

In an interview with Chinese state television CGTN on Saturday night, Beijing's ambassador to the U.S. Cui Tiankai said that China will honor its phase-one trade commitments and suggested that the U.S. live up to theirs on issues such as Taiwan.

Rising political tensions in Northeast Asia and air strikes in the Middle East also weighed on markets ahead of New Year holidays.

North Korean leader Kim Jong Un will give his New Year's speech on Wednesday, with all eyes on nuclear-armed Pyongyang's threat of a "new way" after its end-of-year deadline for sanctions relief from the U.S. China's Xi Jinping is also scheduled to give a New Year's address.

While the German DAX Index has fallen by 0.7 percent, the U.K.'s FTSE 100 Index is down by 0.3 percent and the French CAC 40 Index is down by 0.2 percent.

Smiths Group shares have dropped. The company's Chief Executive Andy Reynolds Smith will likely step down next year after a demerger of its medical unit, the Sunday Times reported.

Domino's Pizza Group has also fallen. Its Chief Financial Officer, David Bauernfeind, died in a tragic accident on 26th December whilst on holiday with his family, the company said in a statement.

Rio Tinto has slid after the mining giant said a phased restart is now in progress across the operation at Richards Bay Minerals in South Africa.

The company expects Richards Bay Minerals to return to full operations in early January, leading to regular production in early 2020.

French eyewear firm EssilorLuxottica has also fallen. The company said its subsidiary Essilor International recently discovered fraudulent financial activities in one of its plants in Thailand.

Meanwhile, Tecnicas Reunidas has jumped after the Spanish oil servicing firm said it expects an increase in sales and operating margins in 2020.

U.S. Economic Reports

MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of December at 9:45 am ET. The Chicago business barometer is expected to inch up to 48.0 in December from 46.3 in November, although a reading below 50 would still indicate a contraction.

At 10 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of November. Pending home sales are expected to climb by 1.1 percent in November after slumping by 1.7 percent in October.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.