Five things you need to know before the market opens on Monday June 12.
1. -- Stock Futures Higher Ahead of Key Market Tests
U.S. equity futures moved higher Monday, extending gains for the S&P 500 into what is likely to be a stern test this week for the benchmark's recent move into bull market territory.
Three major central bank decisions, nearly $300 billion in bond and Treasury bill sales as well as key readings of inflation and retail sales from the Commerce Department are all expected to challenge the market's resilience this week as investors debate the strength of the domestic U.S. economy and the breadth of the S&P 500's 12% year-to-date gain.
Mega-cap tech stocks, which now comprise around 30% of the S&P 500's total weight, have powered the benchmark's 2023 gains, suggesting the headline strength may not be as telling for the broader investment complex.
However, with more than half of the S&P 500 stocks now trading above their 200-day moving average, a key technical indicator, investors will use this week's performance to judge the market's overall potential heading into the summer months.
The first of this week's test will likely come later today, when the Treasury auctions $32 billion in re-opened 10-year notes as part of a funding wave over the next few weeks designed to replenish is 'Treasury General Account' with the Federal Reserve.
Benchmark 10-year note yields were marked at 3.753% in overnight trading, while 2-year paper added 3 basis points to change hands at 4.613%. The U.S. dollar index was modestly lower against a basket of its global peers in overnight dealing, falling 0.22% to 103.335.
Heading into the start of trading on Wall Street, futures contracts tied to the S&P 500 are indicating a 16 point opening bell gain and those linked to the Dow Jones Industrial Average priced for a 55 point move to the upside. The tech-focused Nasdaq is set to open around 91 points higher.
European stocks were heading firmly higher, as well, with the Stoxx 600 rising 0.55% in Frankfurt, while Britain's FTSE 100 up 0.2% in London.
Overnight in Asia, the region-wide MSCI ex-Japan index rose 0.25% into the close of trading while Japan's Nikkei 225, meanwhile, closed 0.52% higher at 32,434.00 points.
2. -- Week Ahead: Fed, Inflation, Retail Sales In Focus
The Federal Reserve's June rate decision, slated for Wednesday afternoon, highlights what is likely to be a crucial week for global stocks, which are holding at the highest levels in more than a year.
Interest rate traders are pricing in a 70% chance that the Fed hold its key lending rate steady at a range of between 5% and 5.25%, but are nonetheless expecting the central bank to execute one more rate hike, likely in July, amid elevated inflation and a resilient job market.
The European Central Bank will follow the Fed with its only policy decision on Thursday in Frankfurt, with analysts fulling expecting Christine Lagarde to boost the region's refinancing rate, which sits at 3.75% by at least 25 basis points, with a summer rate hike still likely as inflation around the region hovering at around 6.1%.
The Bank of Japan will wrap-up its two day policy meeting in Tokyo on Friday.
The Commerce Department will also publish what could be a key reading on May inflation on Tuesday at 8:30 am Eastern time, with economists expecting the headline rate to slow to around 4.1%, down from the 4.9% recorded in April, with the so-called core reading, which strips out food and energy prices, falling to 5.2% from 5.5%.
May retail sales data is also scheduled for Thursday at 8:30 am Eastern time, with consumer sentiment figures from the University of Michigan's benchmark survey published at 8:00 am Eastern time on Friday.
A light earnings calendar for the week will be highlighted by fourth quarter earnings from Oracle Corp. (ORCL) after the close of trading on Monday, homebuilder Lennar (LEN) before the bell on Wednesday and a second quarter update from Adobe (ADBE) after the bell on Thursday.
3. -- Biogen Surges As FDA Panel Gives Final Nod To Alzheimer's Treatment
Biogen (BIIB) shares powered higher in pre-market trading after a panel advising the U.S. Food & Drug Administration cleared the path for approval of the drugmaker's Alzheimer's treatment.
The expert panel, using data from a late-stage trial made with Biogen's Japan-based partner, Eisai Pharmaceuticals, said the treatment -- known as Leqembi -- "clearly demonstrated a clinical benefit" and is "an effective treatment in the population as it was defined."
Full FDA approval, which could come before early July, is expected to expand Medicare payments for users needing the treatment.
Leqembi had a success rate of between 23% to 37%, compared with a placebo, in slowing the decline of cognition and daily function in the 1,800-patient trial that lasted for 18 months. Side-effects, however, were also observed in some 13% of those involved in the study, which included two fatalities linked to microhemorrhages in a separate study.
Eisai said the deaths were not linked to the use of Leqembi and the Alzheimer's Association has asked the FDA to approve it.
Biogen shares were marked 3.3% higher in pre-market trading to indicate an opening bell price of $319.00 each.
4. -- Oracle Set For New Record High Ahead of Q4 Earnings
Oracle (ORCL) shares moved firmly higher in pre-market trading, and are set to open at a fresh all-time high, ahead of the cloud-focused software group's forth quarter earnings after the closing bell.
Oracle, which accelerated its earnings potential last year with the $28 billion purchase of Cenrer, the second-largest designer of software used by doctors and hospitals to mange and store medical records, is set to become one of the early beneficiaries of the buildout in AI spending following a partnership with chipmaker Nvidia (NVDA) it inked in March.
Oracle is expected to post a bottom line of $1.58 per share, up 4 cents from the same period last year, with revenues rising 16% to $13.73 billion.
Oracle itself said it expects to add more healthcare customers thanks to the Cenrer acquisition, and said fourth quarter revenues would grow between 15% and 17% with profits coming in between $1.50 and $1.60 per share.
Oracle shares were marked 4% higher in pre-market trading to indicate an opening bell price of $114.28 each.
5. -- Silvio Berlusconi, Billionaire Media Mogul and Former Prime Minister of Italy, Dies at 86
Silvio Berlusconi, the controversial media baron who was Italy's longest-serving Prime Minister, died Monday at the age of 86 following a series of hospital visits in his home city of Milan.
Berlusconi, once nicknamed Il Cavaliere -- 'The Knight' --- built and owned Italy's Mediaset empire, as well a the A.C. Milan Football Club, before entering politics in 1994 as Deputy Prime Minister and winning a general election for his 'Forza Italia' party shortly after.
Plagued by scandals linked to both his business and political dealings, Berlusconi was convicted of tax evasion linked to Mediaset in 2012, while avoiding sentences in six others due to changes in Italian law brought by the majority his government lead in Italian parliament.
In 2011, the then 73-year old Prime Minister was charged with paying for sex with a minor, and abusing his power to cover up the alleged crime. Convictions linked to the case were eventually overturned.
