XLE - S&P Dow Nasdaq futures drift; crude oil rises after Saudi cut

2023-06-05 05:08:33 ET

Stock index futures point to little change at the open, with more action in the bond and commodities markets.

S&P futures ( SPX ) were little changed. Dow futures ( INDU ) +0.1% were higher and Nasdaq 100 futures ( NDX:IND ) -0.2% were lower.

WTI crude rose nearly 3% following the OPEC+ meeting where Saudi Arabia agreed to a voluntary production cut of another 1M bpb .

Energy ( XLE ) stocks are doing the best premarket, up 1% the remaining sectors close to unchanged.

"Any price increase transfers money from buyers to sellers, so the global growth impact is more redistributive than negative," UBS" Paul Donovan said. "The impact on developed economy consumers depends on changes in oil demand, and whether other factors influence prices. UK auto fuel prices fell recently, after the competition authority became interested in retailers’ profits."

The 10-year Treasury yield ( US10Y ) rose 4 basis points to 3.74%. The 2-year yield ( US2Y ) rose 4 basis points to 4.54%.

The Fed enters its blackout period ahead of next week's FOMC meeting.

"At the moment markets price in around a 1 in 3 chance of a (Fed) hike next week and maybe CPI might be the main thing that shifts those odds towards a hike if the report is strong," Deutsche Bank's Jim Reid said. "If the Fed wants to subtly communicate to the market one way or another ahead of next week then well placed media stories might surface."

"However before CPI that does seem unlikely as nothing will be 100% decided until then. We are back to having a fair bit of uncertainly over the near-term Fed outlook though. After spending most of the 4-day shortened week last week rallying around 25bps from the highest point post-SVB, 2yr US notes sold off +16bps on Friday after a strong headline payroll number that seemed to mask some notable weakness under the surface in the report."

On the Monday economic calendar, April factory orders arrive shortly after the start of trading. Economists predict a monthly rise of 1.1%.

"Media reports have suggested that China will account for less than half of US imports of low-cost products from Asia by the end of 2023 - some of this is switching to other locations, but some of this is onshoring," Donovan said.

At the same time, the ISM services index for may hits. It's expected to stay about steady at 51.8.

Among active stocks, Palo Alto Networks ( PANW ) is the top gainer as it is tipped to replace Dish Network ( DISH ) in the S&P 500 . Dish is among the biggest decliners.

More on the markets

• S&P 500: Genuine Breakout? Week Starting 5th June
• Traders Bet Billions On A 2023 Fed Pivot: Powell Could Crush Them
• S&P 500 posts three-week win streak as traders up bets for rate hike skip later this month

For further details see: