OPENING CALL
Stock futures pointed to minor losses on Monday as investors await a decision on interest rates from the Federal Reserve this week and the latest data on inflation.
In Europe, the strong showing by right-wing parties in European Union elections drove down shares, hit the euro and pushed up borrowing costs across the continent.
France's CAC 40 retreated 1.6%, led lower by bank stocks, as Emmanuel Macron called a legislative election after Marine Le Pen's party trounced his forces.
A big concern for money managers is that Marine Le Pen's National Rally might open the spigots on spending, endangering France's fragile fiscal position, State Street Global Advisors said.
"The feeling is that what Macron is doing is a very high-risk strategy."
Premarket Movers
Apple rose 0.4% ahead of the start of the company's Worldwide Developers Conference. The event, which runs through Friday, will kick off with a keynote speech from Tim Cook. The company is expected to outline its strategy around artificial-intelligence software.
Diamond Offshore Drilling was up 6.8% after agreeing to be acquired for about $1.6 billion in a cash-and-stock deal by Noble.
GameStop was up 3.2%. Shares closed down 39% on Friday, even after Keith Gill, the meme trader known as Roaring Kitty, used a livestream on Friday to reiterate his bullish position on the stock.
Nvidia will start trading on a split-adjusted basis. The 10-for-1 stock split took effect Friday after the close of trading. Shares were down 0.5% premarket.
Southwest Airlines rose 5.6% to $29.30 after WSJ reported activist Elliott Investment Management has built a stake of nearly $2 billion in the carrier and plans to push for changes aimed at reversing the airline's underperformance.
Post Close Movers
KKR, CrowdStrike and GoDaddy will all join the S&P 500 later this month, S&P Dow Jones Indices said. They will replace Robert Half, Comerica and Illumina.
KKR rose 8.1%, CrowdStrike was up 5.4% and GoDaddy gained 3.7%.
Nisun International Enterprise Development Group said it had achieved a breakthrough in its egg business. The company said it now had daily supply capacity of over 20 million eggs since entering the industry one year ago. Shares rose 25%.
Watch For:
Employment Trends Index for May; Earnings from FuelCell Energy, Yext
Today's Top Headlines/Must Reads:
- The Shortcut That Allows Risky Startups to Raise Billions From Rookie Investors
- Meme Stocks Are Back, but Fund Investors Moved On
- Americans Really, Really Hate Inflation-and That's a Big Problem for the Fed
MARKET WRAPS
Forex:
The dollar could rise further after the jobs data caused markets to reduce expectations of interest-rate cuts by the Fed even more ahead of a meeting this week, MUFG said.
"The strong employment report increases the risk of the Fed providing a more hawkish policy update," it said.
"Recent developments have increased the risk that the dollar will remain stronger for longer."
MUFG expects the Fed to signal a delay to rate-cut plans due to inflation staying elevated. Inflation data are also due on Wednesday.
The euro slid to a one-month low against the dollar after European elections sparked concerns that European unification "appears gradually more fragile," Commerzbank said.
"The euro suffers when the question arises as to whether a politically created transnational currency can survive in the long term if the political framework conditions change," it said.
"So far, the rampant euro skepticism has not caused any significant damage to the euro. However, the risk that this will not remain the case increased yesterday. Only marginally, but to a visible extent."
Energy:
Oil prices edged higher despite a stronger dollar, but market sentiment remains broadly bearish, ING said.
After the jobs data, all eyes are now on the Fed's two-day policy meeting starting on Tuesday and the May CPI inflation data release on Wednesday.
Traders will also be watching for monthly oil-market reports from OPEC and the International Energy Agency this week for insights on the supply and demand outlook.
Goldman Sachs said Brent crude is expected to reach $86 a barrel in the third quarter of the year on healthy fuel demand over the summer.
The bank expects solid demand for transportation and cooling to push oil markets into a deficit of 1.3 million barrels a day, sending the benchmark price higher from current levels of around $79 a barrel.
Metals:
Gold futures fell to their lowest level since early April on the U.S. jobs report and on news that China halted buying gold for reserves in May, ING said.
The Chinese central bank bought just 60,000 ounces in April, down from 160,000 ounce in March, ING said.
TODAY'S TOP HEADLINES
Elon Musk Says a Key Group of Tesla Shareholders Back His Massive Pay Package
The world should find out this week if Tesla shareholders reapprove a massive $56 billion pay package for CEO Elon Musk.
It's looking more and more likely things will go Musk's way.
Nvidia's New Sales Booster: The Global Push for National AI Champions
Global governments are leaping into the AI spending boom.
Countries in Asia, the Middle East, Europe and the Americas are pouring billions of dollars into new domestic computing facilities for artificial intelligence, opening up a fast-growing source of sales for Nvidia and other tech companies.
Airlines Keep Trying to Cut Out the Middleman. Here's Why It Backfires.
Ask which occupations have been killed by the internet, and someone will soon say travel agents. Except that it isn't quite true-to airlines' chagrin.
When American Airlines Chief Executive Robert Isom recently backtracked on his plans to steer customers away from agents, the American Society of Travel Advisors cheered.
Fed won't move interest rates this week, but meeting will still be a feast for economists
The Federal Reserve is widely expected keep its benchmark interest rate steady at the end of their two-days of deliberations on Wednesday, but economists will be watching closely for any clues on the timing of the first rate cut in four years.
A move this week is off the table because Fed officials have stressed the need to be patient as the decline in inflation has shown a lack of progress over the first quarter of the year, said Ian Pollick, head of fixed income strategy at CIBC Capital Markets.
Iran Approves Six Candidates to Run for President. All but One Are Conservatives.
Iranian authorities approved a list of six candidates-almost all conservatives-to run in a presidential contest on June 28 following the death of President Ebrahim Raisi in a helicopter crash last month, setting off what will likely be a carefully managed campaign as the country's clerical leaders face mounting domestic and external stress points.
At home, growing numbers of Iranians have chosen not to vote at all in recent elections to mark their dissatisfaction with Iran's strict Islamic rules and a faltering economy. Internationally, Tehran is facing growing pressure over advances in its nuclear program and its support for regional proxies across the Middle East as the war in Gaza drags on.
U.S. to Offer Landmark Defense Treaty to Saudi Arabia in Effort to Spur Israel Normalization Deal
The Biden administration is close to finalizing a treaty with Saudi Arabia that would commit the U.S. to help defend the Gulf nation as part of a long-shot deal to encourage diplomatic ties between Riyadh and Israel, U.S. and Saudi officials said.
But the success of the diplomatic effort hinges on Israel's commitment to a separate Palestinian state, and more immediately an end to the war in Gaza, an unlikely proposition amid months of fruitless cease-fire talks and an Israeli weekend raid to retrieve hostages from the heart of the territory.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Enghouse Sys 2Q
Economic Indicators $(ET)$:
Nothing scheduled
Stocks to Watch:
Vecima Networks: Asset-Purchase Agreement With Casa Systems Terminated; Subscription Receipts Canceled; U.S. Bankruptcy Court Approved Sale of Casa Systems Cable Business Assets to Successful Bidder
Expected Major Events for Monday
04:30/JPN: May Corporate Insolvencies
05:00/JPN: May Economy Watchers Survey
06:00/GER: 1Q Labour cost index
08:00/ITA: Apr Industrial Production
14:00/US: May Employment Trends Index
14:00/US: 1Q Quarterly Financial Report - Industry
14:00/US: 1Q Quarterly Financial Report - Retail Trade
23:01/UK: 3Q Manpower UK Employment Outlook Survey
23:50/JPN: May Money Stock, Broadly-defined Liquidity
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
3D Systems Corp $(DDD)$ is expected to report $-0.11 for 1Q.
AEterna Zentaris Inc (AEZS,AEZS.T) is expected to report for 1Q.
Ayala Pharmaceuticals Inc (ADXS) is expected to report $-1.95 for 1Q.
Buckle Inc $(BKE)$ is expected to report.
Calavo Growers $(CVGW)$ is expected to report $0.36 for 2Q.
California First Leasing Corp (CFNB) is expected to report for 3Q.
Catalent Inc (CTLT) is expected to report $-0.13 for 3Q.
Enghouse Systems Ltd (ENGH.T) is expected to report $0.36 for 2Q.
FuelCell Energy Inc $(FCEL)$ is expected to report $-0.08 for 2Q.
Kaspien Holdings Inc $(KSPN)$ is expected to report for 1Q.
MIND Technology Inc $(MIND)$ is expected to report $-0.01 for 1Q.
Optical Cable Corp $(OCC)$ is expected to report for 2Q.
Pioneer Power Solutions $(PPSI)$ is expected to report $0.02 for 1Q.
Seneca Foods (SENEA,SENEB) is expected to report for 4Q.
Skillsoft Corp $(SKIL)$ is expected to report for 1Q.
Video Display Corp (VIDE) is expected to report for 4Q.
Yext Inc $(YEXT)$ is expected to report $-0.03 for 1Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
3M Raised to Buy From Neutral by B of A Securities
Biomea Fusion Cut to Equal-Weight From Overweight by Barclays
(MORE TO FOLLOW) Dow Jones Newswires
June 10, 2024 06:12 ET (10:12 GMT)
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