Analyst: U.S.-North Korea tensions stall as Trump deals with domestic terrorism
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U.S. stock-index futures pointed to a solidly higher open on Monday, indicating that major benchmarks were poised to rebound from last week's sharp decline, which represented their biggest weekly drops in months.
That weakness was driven in part by fears over North Korea, where tensions with the U.S. have been escalating. That issue overshadowed the state of the equity market, where earnings have been strong at a time of high employment and low inflation, as well as valuations that appear elevated by many metrics. However, the Korea issue ebbed for investors over the weekend, pushed to the background amid domestic unrest.
Dow Jones Industrial Average futures were recently up by 93 points, or 0.4%, to 21,941, after earlier showing a rise of 106 points. S&P 500 futures tacked on 0.5% to 2,453.25, while Nasdaq-100 futures advanced by 0.5% to 5,867.00.
"The markets have opened with an eerie note of calm at the start of a fresh week," said Kathleen Brooks, a London-based research director at City Index, in emailed comments Monday, noting safety plays such as gold were trading lower.
"The U.S.-North Korea tensions stalled over the weekend as President Trump dealt with more pressing matters of domestic terrorism," she added.
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White House officials over the weekend found themselves working to clarify President Donald Trump's comments (http://www.marketwatch.com/story/a-day-later-white-house-says-trump-meant-to-condemn-white-supremacists-2017-08-13) on deadly violence at a white supremacist rally in Charlottesville, Va., after his initial remarks on the matter (http://www.marketwatch.com/story/watch-live-trump-comments-on-charlottesville-va-display-of-hatred-bigotry-and-violence-on-many-sides-2017-08-12) drew flak from Democrats and Republicans.
Also over the weekend, Secretary of Defense James Mattis and Secretary of State Rex Tillerson sought to play down the risk of a conflict, writing in The Wall Street Journal that the Trump administration is seeking diplomatic solutions (http://nation.foxnews.com/2017/08/13/mattis-and-tillerson-were-holding-pyongyang-account) to achieve the "irreversible denuclearization" of North Korea.
Last week, the Dow gave up 234.49 points, or 1.1% (http://www.marketwatch.com/story/sp-500-poised-for-worst-week-since-november-as-global-tensions-persist-2017-08-11), with analysts blaming much of the selling on an escalating war of words between Trump and North Korean officials. The S&P 500 lost 1.4% for the week, while the Nasdaq Composite Index gave up 1.5%. The week marked the biggest one-week percentage drop for both the Dow and the S&P since March, as well as the biggest for the Nasdaq since June, although it was also the Nasdaq's third straight weekly loss.
The selloff took the S&P and Nasdaq below their 50-day moving averages, seen as a bearish sign for near-term momentum if they continue to trade under that level. If they recover above it, however, that would be the latest example of investors using any decline as an opportunity to buy on the dip (http://www.marketwatch.com/story/a-problem-for-buy-the-dip-investors-no-dips-to-buy-2017-08-08).
Read more:Bruising stock-market selloff may have cracked the rally's foundation (http://www.marketwatch.com/story/bruising-stock-market-selloff-may-have-cracked-the-rallys-foundations-2017-08-11)
See also:This 'warning siren is blaring,' but that's not stopping the Wall Street hype machine (http://www.marketwatch.com/story/this-warning-siren-is-blaring-but-thats-not-stopping-the-wall-street-hype-machine-2017-08-14)
Other markets: European equities stepped higher, and Asian markets mostly closed with gains (http://www.marketwatch.com/story/asian-markets-mostly-higher-as-north-korea-rhetoric-settles-down-2017-08-13). Oil futures traded lower, as a key dollar index advanced modestly.
Individual movers: Shares in Tesla Inc.(TSLA) traded nearly 2% higher in premarket action around $364 after Baird analyst Ben Kallo--a longtime Tesla bull (http://www.marketwatch.com/story/heres-why-tesla-is-bairds-top-stock-market-pick-for-2017-2016-12-30)--hiked his price target for the electric-car maker's stock to $411 (http://www.marketwatch.com/story/tesla-price-target-lifted-to-411-at-baird-who-says-dont-short-ahead-of-model-3-2017-08-14) from $368.
Netflix Inc.'s stock (NFLX) traded 0.3% lower premarket after a Barron's cover story over the weekend warned the stock could drop more than 50% as "Disney goes its own way and Amazon looms (http://www.barrons.com/articles/the-trouble-with-netflix-1502510711?mod=mktw)," referring to a Netflix-Disney distribution deal that's ending and the threat from Amazon.com Inc.'s (AMZN) streaming business.
Don't miss:Netflix will survive the Disney cord-cut, and here's the proof: Piper Jaffray (Netflix will survive the Disney cord-cut, and here's the proof:Piper%20Jaffray)
And in other Netflix news, the streaming giant has recruited prolific TV producer Shonda Rhimes (http://www.marketwatch.com/story/netfix-poaches-producer-shonda-rhimes-from-abc-in-a-volley-lobbed-at-hollywood-2017-08-14), the creator of hits such as "Grey's Anatomy" for Walt Disney Co.'s (DIS) ABC, in a sign of an arms race for talent.
Economic news: There are no top-tier U.S. economic reports expected Monday, and no Federal Reserve officials are due to speak.
Tuesday should bring U.S. retail sales data for July, and minutes from the Fed's last policy meeting are on tap for Wednesday.
See:North Korea could take back seat as stocks face big week for consumer data (http://www.marketwatch.com/story/north-korea-could-take-back-seat-as-stocks-face-big-week-for-consumer-data-2017-08-12)
And read:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
(END) Dow Jones Newswires
August 14, 2017 08:21 ET (12:21 GMT)