By Peter Nurse
Investing.com - U.S. stocks are seen opening lower Monday, falling back from the previous session’s record levels as rising Covid cases stunt the global economic recovery, particularly in China.
At 7:05 AM ET (1105 GMT), the Dow Futures contract was down 100 points, or 0.3%, S&P 500 Futures traded 10 points, or 0.2%, lower, while Nasdaq 100 Futures dropped 35 points, or 0.2%.
The blue-chip Dow Jones Industrial Average posted gains of 0.8% last week, closing at a record, while the S&P 500 finished Friday up 0.7% for the week, also notching its best-ever finish. The tech-heavy Nasdaq Composite underperformed during the week, down just under 0.1%.
The main indices have been supported by a strong quarterly earnings season, with FactSet calculating that 87% of S&P 500 companies have reported positive earnings surprises, the highest percentage since the data company began tracking this metric in 2008.
That said, sentiment has turned more cautious Monday as investors digested signs China’s economic recovery was losing momentum, with both industrial production and retail sales rising more slowly than expected in July, as new Covid-19 outbreaks disrupted business.
The number of coronavirus cases is also growing in the U.S., with the delta variant, which is rapidly spreading among mostly the unvaccinated portion of the U.S. population, causing hospitalizations to spike in recent weeks.
Also causing wariness Monday is the turmoil in Afghanistan with the Taliban overrunning the capital Kabul over the weekend, prompting President Ashraf Ghani to flee the country.
There’s little in the way of significant economic data due Monday, but Tuesday’s U.S. retail sales data will be studied to see if the Covid outbreak has impacted consumer spending patterns.
Additionally, the Fed Reserve’s minutes of its July meeting are released on Wednesday, and will be carefully scrutinized, particularly after a Wall Street Journal report claiming that the central bank is looking at ending its asset purchases by the middle of next year.
In corporate news, Hyatt Hotels (NYSE:H) will be in the spotlight after the hotel operator announced a deal to buy resort company Apple (NASDAQ:AAPL) Leisure Group from private-equity firms KKR and KSL Capital Partners for $2.7 billion in cash.
Elsewhere, oil prices fell by over 1% Monday on concerns mobility restrictions in China, the second largest importer of crude in the world, will hit fuel demand.
China's daily crude throughput last month fell to the lowest since May 2020 as independent refiners slashed production, according to data from the National Bureau of Statistics on Monday. That was the first year-on-year decline since March last year when the coronavirus hit hard.
By 2:05 AM ET, U.S. crude futures traded 1.6% lower at $67.14 a barrel, while the Brent contract fell 1.5% to $69.56.
Additionally, gold futures fell 0.1% to $1,776.05/oz, while EUR/USD traded 0.1% lower at 1.1780.