Opening Bell: Energy Shares, WTI Fly On Iran Sanctions But U.S. Futures Falter


  • Europe drops, U.S. futures waver after Asian session is besieged by low volumes
  • U.S. Treasury yields stumble upon resistance, dollar bounces back
  • Oil extends Iran-sanction rally but fundamentals tell a different story

Key Events

Equities in Europe and futures on the , and slipped this morning, following a mixed performance across Asian indices.

SPX contracts edged lower after rebounding from a slide at the end of the Asian session, thereby increasing the risk of a small double-top to yesterday’s rally.

The halted a seven-day advance at the open, pulled down by builders, which tracked a U.S. slump in the sector on disappointing industry data. Conversely, energy companies were buoyed by a 2.5% jump in prices following the White House’s announcement, on Monday, that it will withdraw waivers on Iranian sanctions. The news helped contain the overall slump of the pan-European benchmark—in line with its effect on U.S. indices yesterday.

In earlier Asian trading, volumes stood below 30-day averages ahead of Japan’s extended Golden Week holiday. Shares climbed on Tokyo’s (+0.19%) and slipped on Hong Kong’s (-0.14%) and China’s (-0.51%). Australia’s outperformed its regional peers, climbing 0.95%

Global Financial Affairs

On Monday, U.S. stocks managed to seal a gain despite light volumes, with prices reaching the highest close since Oct. 3 ahead of an onslaught of corporate earnings reports.

The eked out a 0.1% gain, with sector performance widely split. shares (+2.11%), which tracked surging oil prices, almost singlehandedly pushed the index into green territory, as the second-best performer, , followed quite far behind (+0.45%). stocks tumbled (-1.10%) after data disappointed expectations, falling to -4.9% in March, against the -3.8% slide analysts had forecast. Technically, the SPX closed 0.77% from the Sept. 20 record.

The slid 0.18%, erasing half of Thursday’s jump, which had pushed the index 1.01% away from its Oct. 2 record close.

The outperformed, advancing 0.22% to within 1.15% from its Sept. 29 record close.

The dropped 0.49%, faring as the session’s hardest faller. Technically, the small-cap stock benchmark fell to the lowest level since Apr. 9, increasing the potential for a double-top reversal.

Meanwhile, the yield on Treasurys struggled to maintain its monthly high levels, after last Wednesday’s shooting star confirmed the resistance of the bottom of the Jan. 31- Mar. 11 trading range.

DXY Daily Chart - Powered by TradingView

DXY Daily Chart – Powered by TradingView

The bounced back from a two-day selloff, toward the top of an ascending channel.

On the other side of the Atlantic, European sovereign bonds ticked lower with the .

Overall, earnings results from the world’s biggest technology companies (see details below) will likely monopolize investor attention this week, along with first-quarter U.S. figures out on Friday. However, global central banks’ monetary policy will continue to be the biggest catalysts for stocks, after their recent dovish tilt boosted global equity prices.

In commodities trading, yesterday’s oil price leap completed a pennant continuation pattern, with a conservative inherent target—based on measuring the previous sharp move—of about $67. This may be preceded by a return move, to retest the pattern’s integrity and, with it, the uptrend.

From a fundamentals perspective, China remained defiant against U.S. sanctions on Iranian oil and analysts don’t see prices rallying despite the reimposition of the ban.

Up Ahead

Earnings

  • Twitter (NYSE:) is scheduled to before market open on Tuesday, with expectations of $0.06 EPS, from $0.09 in the same quarter last year. The social media company may soon start to reap the benefits of its recent efforts to step up both transparency and user experience standards.
  • Snap (NYSE:) after market close today, with EPS forecasts at $-0.22 and revenues at $305.5m. The online platform operator has set itself a high bar by posting rosy expectations on user engagement and other key metrics.
  • Microsoft (NASDAQ:) after market close on Wednesday, with an EPS of $1, from the $0.95 it posted last year.
  • Facebook (NASDAQ:) is expected to after market close on Wednesday, with a $1.65 EPS, slightly lower than the $1.69 it posted last year.
  • Amazon (NASDAQ:) is due to after market close on Thursday, with a $4.61 EPS forecast, from $3.27 last year.
  • European bank earnings kick into full gear with reports from (DE:), (NYSE:), (LON:), (SIX:) and (ST:).

Market Moves

Stocks

Currencies

Bonds

  • Canada’s was down early Tuesday at 1.783, a 0.22-percent decrease.
  • The yield on 10-year Treasurys slid one basis point to 2.58%.
  • Germany’s yield increased one basis point to 0.04%.
  • Britain’s yield gained one basis point to 1.212%.
  • The spread of Italy’s bonds over Germany’s advanced two basis points to 2.593%age points to the widest in almost eight weeks.

Commodities

  • The climbed less than 0.05% to the highest in more than a week.
  • gained 0.6% to $74.46 a barrel, the highest in almost six months.
  • LME fell 0.8% to $6,426.50 per metric ton, the lowest in more than a week.
  • dropped 0.2% to $1,272.95 an ounce, the weakest in almost four months.



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