Cyber Monday shopping in focus
Stock rose at the start of trade, following the worst Thanksgiving-week performance in seven years, as oil prices and global equities rally, and as U.S. shoppers begin to take advantage of deals offered by retailers on Cyber Monday.
How are the benchmarks performing?
The Dow Jones Industrial Average DJIA, +1.57% surged 331 points, or 1.4%, to 24,614, while the S&P 500 index SPX, +1.41% rose 31.11 points, or 1.2%, to 2,664. The Nasdaq Composite Index COMP, +1.73% rallied 92 points, or 1.3%, to 7,028.
On Friday, the Dow Jones Industrial Average fell 178.74 points, or 0.7%, to 24,285.95, the S&P 500 index off 17.37 points, or 0.7%, at 2,632.56, while the Nasdaq Composite Index retreated 33.27 points to 6,938.98, a decline of 0.5%.
Last week, the Nasdaq tumbled 4.3%, the Dow ended the week 4.4% lower, while the S&P 500 notched a week-on-week decline of 3.8%. It marked the worst Thanksgiving week since 2011 for all three U.S. indexes.
What’s driving the market?
Losses for oil prices helped drive stocks lower last week, and the reverse was true for Monday. After losing 7.7% in Friday’s session alone, U.S. crude futures CLF9, +2.80% rose 1.7% to $51.27 a barrel, while Brent crude LCOF9, +3.13% jumped 2.1% to $60.22 on Monday.
Signs that Italy’s coalition government was prepared to cut its budget deficit target — a move that could defuse tensions between Rome and the European Union — also helped buoy sentiment. U.K. Prime Minister Theresa May also walked away from an EU meeting with approval for her Brexit deal.
The retail industry will be in focus Monday, as investors digest initial data on the U.S. consumer’s willingness to spend this holiday season, after shoppers began deal-hunting in earnest following last week’s Thanksgiving holiday.
In-store traffic fell as much as 9% compared with last year’s Black Friday, according to closely watched metrics from RetailNext and ShopperTrak. But consumers made up for it by spending more money online, as internet sales rose by 26.4% from last Wednesday through Friday, according to an estimate by Adobe Systems Inc. Traders will continue to focus on incoming data on spending on today’s Cyber Monday, from retailers and outside analysts.
Meanwhile, the issue of U.S.-China trade tensions continues to loom over the market, in the days leading up to a Group of 20 summit beginning Friday, when President Trump and Chinese President Xi Jinping are expected to meet and discuss trade issues.
Which stocks are in focus?
Shares of Amazon.com Inc. AMZN, +4.01% are up 1.8% in early trade amid forecasts Cyber Monday holiday shopping is expected to generate $7.8 billion in sales this year, a gain of 18% on the previous year, making for the biggest online shopping day in the U.S. ever, according to Adobe Analytics.
Other retailers seeing a boost in premarket action include Best Buy Co Inc. BBY, +2.73% which is up 1.3% before the bell, and Target Corp. TGT, +1.95% rising 1% early Monday.
Stocks of retailers without robust online operations, like Dollar Tree, Inc. DG, +1.04% are sinking early Monday, down 0.8%.
What are the strategists saying?
Paul Hickey, co-founder of Bespoke Market Intelligence cautioned investors to put Monday’s early gains in perspective. “Last Friday the S&P 500 did close at a new low for the current correction, and even with today’s 1% gain at the open, the S&P 500 will only be back to levels it was trading at a half-hour before the close on Wednesday,” he said.
“Futures are on fire this morning,” Dave Lutz, head of ETFs at JonesTrading, wrote in a Monday-morning note to clients. “Traders are on the lookout for signs that fresh concessions will be made before President Trump and China’s President Xi Jinping sit down together later this week, “ he wrote, adding that the market “hopes for a strong showing this ‘Cyber Monday’ from online retailers.”
How are other markets trading?
Asian markets traded broadly higher, with Japan’s Nikkei NIK, +0.76% rising 0.7% and Hong Kong’s Hang Seng Index HSI, +1.73% closing the day up 1.7%. Chinese markets were more muted, with the Shanghai SHCOMP, -0.14% up early but ending down 0.1%.
European markets are broadly higher Monday, with the Stoxx Europe 600 SXXP, +1.23% and the FTSE 100 UKX, +1.17% in positive territory.
Crude oil CLF9, +2.80% was in rebound mode, up 2.8%, after plunging 7.7% Friday in its biggest one-day fall in more than three years, while gold GCZ8, +0.05% edged higher and the U.S. dollar DXY, -0.01% started the week on a soft note.
