Stock Futures Tread Lightly Ahead of Monday’s Trading

Stocks ended last week on a sour note after the Dow Jones Industrial Average tumbled close to 300 points to slip further below the 35,000 threshold. The S&P 500 and tech-heavy Nasdaq also finished Friday in the red. For the week, all three major indices lost ground after advancing for three straight weeks.

Retail sales climbed a higher than expected 0.6% last month vs. May, but investors chose to see the glass half empty and turned their attention toward inflation once again. Consumers are beginning to feel the effects of rising prices on real estate, cars and durable goods, according to the University of Michigan’s consumer sentiment index, which fell to 80.8 in the first half of July from June’s 85.5.

Stock index futures were not showing any clear direction on Sunday evening. Dow Jones Industrial Average futures were unchanged, while S&P 500 and Nasdaq futures were slightly positive. Economists cited by The Wall Street Journal believe economic growth saw its best days in the second quarter and will begin to ease. Nonetheless, the economy will keep expanding in 2022, economists say.

Stocks to Watch

Meme stocks were a mixed bag on Friday. AMC Entertainment shed nearly 3% while GameStop hit a stride and gained slightly more than 1% after five consecutive days of declines. GameStop has a new competitor after streaming giant Netflix made a key hire to muscle its way into the video game fray.

In the oil patch, OPEC+ has decided to bolster production for the next couple of years amid strengthening demand in a post-COVID-19 economy. The barrels of oil will be added on an incremental basis until the end of next year. Oil prices including WTI and Brent crude have retreated approximately 5% as the likelihood of an agreement between OPEC and its allies increased.

Look Ahead

Existing home sales for June come out on Thursday at 10 a.m. ET. Wells Fargo economists predict that they climbed higher to 6.06 million units vs. 5.8 million units for May.

As the earnings parade rolls on, technology companies are the next in line. IBM is in the pipeline for Monday. Wall Street has high expectations given that Big Blue is up against numbers from last year’s pandemic-fueled economic slowdown.

In addition, investors will be watching to see the results out of the transportation sector, which tends to serve as a gauge of the economy. J.B. Hunt Transport Services will report earnings after the market closes.