Even with US exchanges closed for the Memorial Day holiday, the new trading week is off to a positive start. Building on Friday’s gains of 1.75% to 3.33% for US indices, US index futures are up 0.3% to 1.0% with the NASDAQ once again leading the charge.
Overseas, Asia Pacific markets soared on reports that Beijing and Shanghai have started to emerge from their recent COVID lockdowns that shuttered their economy and disrupted global supply chains. Hong Kong and Tokyo gained 2.1%, while Sydney jumped 1.4%. In Europe this morning, the Dax is up 0.7% while the FTSE is steady. Trading in cryptocurrencies, where Bitcoin is up 5.3%, also suggests improving investor confidence.
Today’s commodity trading finds crude oil on the rise with both WTI and Brent up 0.6%, and WTI trading above $115.00/bbl. European leaders are meeting today to discuss another round of energy sanctions against Russia which could further impede supply. OPEC+ is meeting later this week with another 400,000 bbl/day monthly increase widely expected. Reports of the US and Iran seizing tankers may also be adding to supply uncertainty. Meanwhile, natural gas is up 1.0% today and copper is up 0.6%.
Earnings season is over but it’s a busy week for economic news. The Bank of Canada meets on Wednesday with the street widely expecting another 0.50% rate increase just like the RBNZ did last week. The turn of the month also brings manufacturing and service PMI reports, plus US ADP and nonfarm payrolls. While the strength of the economy may be of interest, investors may continue to focus more on the inflation related components of these reports, looking for signs of whether inflation pressures are increasing, levelling off, or decreasing ahead of the June Fed meeting.