US Market

The major U.S. index futures are currently pointing to a modestly lower open on Tuesday, with stocks likely to extend the mild pullback seen in the previous session.

The downward momentum on Wall Street may reflect caution ahead of the release of several key economic reports in the coming days.

On Thursday, the Commerce Department is due to release its report on personal income and spending in the month of October.

The report includes readings on inflation said to be preferred by the Federal Reserve and could impact the outlook for interest rates.

Recent data has generated optimism the Fed is done raising rates, leading to strength on Wall Street that has lifted the major averages to their best levels in over three months in recent sessions.

Reports on weekly jobless claims, pending home sales and manufacturing activity may also attract attention along with the Fed’s Beige Book as well as remarks by Fed Chair Jerome Powell.

Stocks showed a lack of direction over the course of the trading day on Monday, extending the lackluster performance seen during last Friday’s holiday-shortened session. The major averages bounced back and forth across the unchanged line before eventually closing modestly lower.

The Dow slipped 56.68 points or 0.2 percent to 35,333.47 and the S&P 500 dipped 8.91 points or 0.2 percent to 4,550.43, pulling back off their best closing levels in over three months, while the Nasdaq edged down 9.83 points or 0.1 percent to 14,241.02.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of some key economic data in the coming days.

The Commerce Department’s report on personal income and spending may be in the spotlight, as it includes readings on inflation said to be preferred by the Federal Reserve.

Economists currently expect the report to show the annual rate of consumer price growth slowed to 3.1 percent in October from 3.4 percent in September. Core price growth is expected to slow to 3.5 percent from 3.7 percent.

Traders will be looking for additional clues about the outlook for interest rates, with optimism the Fed is done raising rates contributing to recent strength on Wall Street.

The Commerce Department released a report Monday morning showing new home sales in U.S. pulled back sharply in the month of October after soaring in September.

The report said new home sales plunged by 5.6 percent to an annual rate of 679,000 in October after spiking by 8.6 percent to a downwardly revised rate of 719,000 in September.

Economists had expected new home sales to tumble by 4.5 percent to a rate of 725,000 from the 759,000 originally reported for the previous month.

Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.

Transportation stocks saw considerable weakness, however, with the Dow Jones Transportation Average falling by 1.3 percent after ending last Friday’s trading at its best closing level in a month.

Notable weakness was also visible among networking stocks, as reflected by the 1.2 percent loss posted by the NYSE Arca Networking Index.

Biotechnology and pharmaceutical stocks also moved to the downside on the day, while gold stocks saw significant strength amid an increase by the price of the precious metal.

Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index jumped by 1.9 percent to its best closing level in almost four months

U.S. Economic Reports

Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of September at 9 am ET.

At 10 am ET, the Conference Board is due to release its report on consumer confidence in the month of November. The consumer confidence index is expected to slip to 101.5 in November after falling to 102.6 in October.

Chicago Federal Reserve President Austan Goolsbee is also scheduled to deliver remarks before a hybrid “Who Owns Midwest Farmland? And Why?” Midwest Agricultural Conference at 10 am ET.

At 10:05 am ET, Federal Reserve Board Governor Christopher Waller is due to speak on the economic outlook before an American Enterprise Institute event.

Federal Reserve Board Governor Michelle Bowman is scheduled to speak on “Monetary Policy and the Economy” before a Utah Bankers Association and Salt Lake Chamber breakfast at 10:45 am ET.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $39 billion worth of seven-year notes.

Federal Reserve Vice Chair for Supervision Michael Barr is scheduled to speak virtually at a Modernized Community Reinvestment Act and Indian Country event at 1:05 pm ET.

Barr is also due to speak virtually at the Opportunity Finance Network’s Fireside Chat on the Community Reinvestment Act Regulations at 3:30 pm ET.

Stocks in Focus

Shares of Carlyle Group (CG) are moving sharply higher in pre-market trading after S&P Dow Jones Indices announced the private equity company will replace ICU Medical Inc. (ICUI) in the S&P MidCap 400.

ICU Medical is being added to the S&P SmallCap 600, replacing PacWest Bancorp (PACW), which is being acquired by Banc of California (BANC) in a deal expected to be completed soon.

Renewable energy company Clearway Energy (CWEN, CWEN.A) is also likely to see initial strength on new it will replace Veritiv Corp. (VRTV) in the S&P SmallCap 600. Clayton, Dubilier & Rice, LLC is set to acquire Veritiv in a deal expected to be completed soon.

Shares of Being (BA) may also move to the upside after RBC Capital Markets upgraded its rating on the Dow components stock to Outperform from Sector Perform.

Meanwhile, shares of Shopify (SHOP) may come under pressure after Piper Sandler downgraded its rating on the e-commerce platform to Underweight from Neutral.

Europe

European stocks have moved mostly lower during trading on Tuesday amid lingering concerns about a global economic slowdown and uncertainty about the outlook for interest rates.

Markets have also been weighed down by recent comments from ECB officials that the fight against inflation is not yet over. With crucial economic data due this week, investors appear a bit reluctant to make significant moves.

While the French CAC 40 Index has slid by 0.7 percent, the U.K.’s FTSE 100 Index is down by 0.4 percent and the German DAX Index is down by 0.1 percent.

On the economic front, a report from market research group Gfk showed the GfK Consumer Climate Indicator for Germany edged up to -27.8 heading into December 2023 from a downwardly revised -28.3 in November, compared with market forecasts of -27.9.

Still, consumer sentiment remains very weak characterized by uncertainty and concern, with no signs of a sustainable recovery in the coming months, the report says.

According to a report from INSEE, the consumer confidence index in France rose to 87 in November, the highest reading since April last year, from 84 in the previous month.

A report from European Central Bank said lending to companies in the Euro area dropped by 0.3 percent year-on-year in October, marking the first decline since July 2015. Meanwhile, loans to households in the eurozone rose by 0.6 percent year-on-year in October, the slowest pace since June 2015.

The report from the ECB also said M3 money supply in the Euro area dropped for the fourth consecutive month, falling by 1.0 percent year-on-year to 16 trillion euros in October after a 1.2 percent decrease in the prior month.

In the U.K. market, Entain is down more than 4 percent. Burberry Group, Just Eat Takeaway.com, Pearson, Royal Mail and ITV are down 2 to 3 percent.

RightMove, Rentokil Initial, Prudential, BT, Diageo, WPP, TUI, Croda International, Segro, Rio Tinto and Antofagasta are also notably lower.

Rolls-Royce Holdings is climbing 6.5 percent. Rolls-Royce has set out ambitious new profit targets and said it plans to sell it electric aircraft division, aiming to turn around the company.

Smurfit Kappa Group is surging nearly 4 percent, and Ds Smith has gained 1.1 percent. EasyJet has jumped, lifted by strong earnings and guidance.

In the German market, Siemens Energy is down 2.6 percent. Bayer is down nearly 2 percent, while Porsche, Zalando, BASF, Vonovia, Volkswagen and Merck are lower by 1 to 1.5 percent.

RWE is surging 3 percent. Fresenius Medical Care and Infineon are gaining 1.2 percent and 1 percent, respectively. Fresenius, Hannover Rueck, Commerzbank, Deutsche Bank, Deutsche Post and E.On are posting modest gains.

In Paris, Pernod Ricard, Kering and LVMH are declining 2.5 to 3 percent. WorldLine, Alstom, Hermes International, Edenred and L’Oreal are down 1 to 2 percent.

TotalEnergies, Safran, Orange, Airbus Group, Engie, Air Liquide and Capgemini are gaining 0.5 to 1 percent.

Asia

Asian markets closed on a mixed note on Tuesday amidst anxiety ahead of crucial economic data. Hong Kong’s Hang Seng Index closed deep in the red ahead of PMI updates from China.

Meanwhile, assurances of an accommodative monetary policy from the People’s Bank of China leadership supported sentiment in the region.

China’s Shanghai Composite Index added 0.2 percent to finish trading at 3,038.55. The day’s trading ranged between 3,020.23 and 3,039.69. The Shenzhen Component Index added 0.5 percent to close at 9,833.46.

The Japanese benchmark Nikkei 225 Index edged down 0.1 percent to end trading at 33,408.39. The day’s trading range was between 33,545.85 and 33,298.04.

Industrial conglomerate Sojitz Corporation was the top gainer with a surge of 8.5 percent. Yokohama Rubber followed with a gain of 4.1 percent. Keio Corp. as well as Nippon Paper Industries added more than 3 percent. Credit Saison also gained close to 3 percent.

Denso Corp was the biggest laggard with a decline of more than 4 percent. Hino Motors, Mazda Motor, Shiseido and T&D Holdings all fell more than 2 percent.

The Hang Seng Index of the Hong Kong Stock Exchange shed 1.0 percent from the previous close to finish trading at 17,354.14. The day’s trading range was between a high of 17,541.48 and a low of 17,303.82.

The Korean Stock Exchange’s Kospi Index jumped 1.1 percent to close trading at 2,521.76. The day’s trading range was between 2,502.26 and 2,522.45.

Australia’s S&P/ASX200 Index closed trading at 7.015.20, adding 0.4 percent. With the gain, the index crossed its 50-day moving average. The day’s trading range was between 6,985.5 and 7,049.20.

Collins Foods surged more than 9 percent following upbeat half-yearly results. Healthcare equipment business Healius followed with a gain of 6.4 percent. Gold miner Regis Resources added 5 percent. Emerald Resources and NRW Holdings, both rallied more than 4 percent.

Core Lithium slipped 4.5 percent. Sayona Mining, specialty retail business Bapcor, engineering business Johns Lyng Group and semiconductor business Weebit Nano all declined more than 2 percent.

The NZX 50 of the New Zealand Stock Exchange climbed 0.7 percent to close trading at 11,237.38 versus the previous close of 11,155.79. Trading ranged between 11,140.17 and 11,237.38.

EROAD and Restaurant Brands New Zealand both surged more than 6 percent in the day’s trading. Oceania Healthcare gained 4.4 percent, followed by Sky Network Television that gained 3.2 percent. Skycity Entertainment Group also gained 2.8 percent.

Vital Healthcare Property Trust, Sanford and Stride Property all declined more than 2 percent. Serko and Air New Zealand both slipped more than 1 percent.

Commodities

Crude oil futures are rising $0.15 to $75.01 a barrel after falling $0.68 to $74.86 a barrel on Monday. Meanwhile, after climbing $9.40 to $2,012.40 an ounce in the previous session, gold futures are inching up $3 to $2,015.40 an ounce.

On the currency front, the U.S. dollar is trading at 148.42 yen compared to the 148.69 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0957 compared to yesterday’s $1.0954.