MARKET SNAPSHOT: Wall Street Stocks Set To Retreat As Investors Look Past French Election

By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica Features Dow Jones Newswires

Sohn hedge-fund conference could spark individual volatility

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U.S. stock-index futures traded slightly lower on Monday, following Emmanuel Macron's closely watched presidential election victory in France on Sunday, which helped to ease some concerns about turmoil in the eurozone.

However, given the lack of surprise in the French election, investors struggled to find catalysts to underpin buying, with U.S. stock benchmarks near records.

Dow Jones Industrial Average futures eased 38 points, or 0.2%, to 20,917, while S&P 500 futures dipped 3.70 points, or 0.1%, at 2,394. Nasdaq-100 futures 6.50 points, or 0.1%, to 5,641.

The S&P 500 and the Nasdaq Composite indexes ended at records last week (http://www.marketwatch.com/story/us-stock-futures-glued-in-place-as-oil-takes-a-roller-coaster-ride-jobs-data-ahead-2017-05-05), following Friday's stronger-than-expected April employment report. The Dow Jones Industrial Average closed higher and above the 21,000 mark--at 21,006.94--for the first time since early March.

Asian stocks appeared to be one of few places that were getting a positive boost from Sunday's victory for French centrist Macron over far-right candidate Marine Le Pen. Losses for U.S. stock futures increased slightly as European stocks pulled back from a nine-year high (http://www.marketwatch.com/story/european-stocks-pull-back-from-21-month-high-after-macron-wins-french-election-2017-05-08), with the French CAC 40 index last down 0.9%.

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Volatility was seen as likely under a Le Pen victory, as she had proposed removing France from the European Union. Investors had backed Macron because he was seen as a safer choice for regional stability, and not because of the specifics of his policies.

"I think Mr. Macron is in for tough challenges from both the left and the right and the country may, in effect, become ungovernable, before all is said and done," Mark Grant, chief strategist at Hilltop Securities, wrote in a research note. He added that for investors, "the rejoicing may be brief."

See: What will be the hot pick from this year's Sohn hedge-fund conference? (http://www.marketwatch.com/story/what-will-be-the-hot-pick-from-this-years-sohn-hedge-fund-conference-2017-05-05)

"I think Mr. Macron is in for tough challenges from both the left and the right and the country may, in effect, become ungovernable, before all is said and done," Mark Grant, chief strategist at Hilltop Securities, wrote in a research note. He added that for investors, "the rejoicing may be brief."

Grant said some investors may shift the focus to French parliamentary votes in June, with questions about Macron's ability to build a majority.

"It is entirely possible that [Macron] won't secure enough seats to push through his agenda. His party will face stiff opposition for the two main French political parties as well as the Le Pen group which are far better organized, in my opinion, than Mr. Macron's group...I think the investment focus will shift, and rather quickly, to the Parliamentary elections and the governance of France as skepticism grows, once again, about the French economy, and the place of France in the European Union."

Read:Macron handily wins French presidential election--seen as an upbeat sign for the stock market (http://www.marketwatch.com/story/macron-handily-wins-french-presidential-electionan-upbeat-outcome-for-wall-street-2017-05-07)

See also:Investors are breathing a sigh of relief over France, for now (http://www.marketwatch.com/story/investors-are-breathing-a-sigh-of-relief-over-france-for-now-2017-05-07)

Recent action in equities has been slight. As of Friday, the S&P moved less than 20 points in either direction for eight consecutive days, the longest streak since 1964. However, some say that could be a good omen for stocks going forward (http://www.marketwatch.com/story/stocks-just-did-this-for-the-first-time-since-the-beatles-landed-in-us-2017-05-06).

Markets won't be getting any directional cues from U.S. data, as there are no top-tier readings due Monday.

A key driver on Monday could come from the annual Sohn Conference, where a number of major hedge-funds managers will speak on the market and could give market-moving calls on individual companies.

Stocks on the move: Shares of Kate Spade & Co.(KATE) jumped 8% in premarket trading on news luxury handbag retailer Coach Inc.(COH) will buy its rival in a deal valued at $2.4 billion. (http://www.marketwatch.com/story/kate-spades-stock-soars-after-24-billion-coach-buyout-deal-2017-05-08)

TV station operators Sinclair Broadcast Group Inc.(SBGI) and Tribune Media Co.(TRCO) could make moves following takeover news. Sinclair is nearing a deal to buy Tribune Media for close to $4 billion, in a tie-up that would combine two of the country's biggest local-television operators, according to a report in The Wall Street Journal (http://www.marketwatch.com/story/sinclair-closes-in-on-4-billion-deal-to-buy-tribune-media-2017-05-07), which cited sources.

Read:Live-blog recap from Berkshire Hathaway's annual meeting featuring Warren Buffett (http://www.marketwatch.com/story/advice-from-berkshires-annual-meeting-stay-sane-be-honest-2017-05-07)

(http://www.marketwatch.com/story/advice-from-berkshires-annual-meeting-stay-sane-be-honest-2017-05-07)Other markets: In Asia, Japan's Nikkei 225 index reached a 16-month high (http://www.marketwatch.com/story/nikkei-other-asian-markets-surge-after-macrons-victory-2017-05-07) and Korea's Kospi hit an all-time high, helped in part by the French election result, but also enthusiasm following the U.S. jobs report.

Oil prices traded up and down on Monday (http://www.marketwatch.com/story/oil-rebounds-on-expectations-of-more-opec-production-cuts-2017-05-08), with West Texas Intermediate crude futures last flat at $46.22 a barrel, after tumbling around 6.3% last week. Crude made an attempt to retake the $47 level after Saudi Arabia's oil minister said a deal to cut production could be extended into 2018, before backing off.

Gold prices rose $7.10, or 0.6%, to $1,234.10 an ounce.

Opinion:The commodity conundrum--why are prices so weak? (http://www.marketwatch.com/story/the-commodity-conundrum-why-are-prices-so-weak-2017-05-08)

The dollar was moving higher (http://www.marketwatch.com/story/euro-slips-from-6-month-high-as-macron-relief-rally-loses-steam-2017-05-08), as measured by the ICE U.S. Dollar Index , up 0.2% at 98.89. The dollar was largely gaining against the euro , which slipped from a 6-month high as a relief rally linked to the French election lost steam. The euro fell to $1.0950 from a close ahead of the French election on Friday of $1.0999.

(END) Dow Jones Newswires

May 08, 2017 08:54 ET (12:54 GMT)