The stock market was mixed Monday, with Columbus Day in the U.S. likely making for a quiet day of trading, as Alibaba and Chinese tech stocks surged while investors await the beginning of earnings season and key inflation data in the week ahead.
U.S. bond markets are closed for the Columbus Day holiday while the New York Stock Exchange and Nasdaq remain open—but analysts expect much lower volumes Monday and a quiet day ahead. The S&P 500 has seen an average gain of 0.7% on Columbus Days dating back to 1991, compared with a daily average rise of 0.04%.
Investor attention remains focused on familiar themes, such as supply-chain pressures on company profits, a global energy crunch, inflation, and the future of central bank stimulus.
Markets will be able to digest new updates on many of these topics in the week ahead. Earnings season gets under way in earnest in the coming days, and a major inflation indicator—the Consumer Price Index (CPI)—will be released Wednesday along with the latest minutes from the Federal Reserve’s monetary policy committee.
“The week ahead will center around the U.S. CPI release on Wednesday but it might be a touch backward looking given that energy has spiked more recently and that used car prices are again on the march after a late summer fall that will likely be captured in this week’s release,” said Jim Reid, a strategist at Deutsche Bank.
“Elsewhere, we’ve got a potentially more challenging U.S. earnings season than that seen over the last year,” Reid added. “In addition, minutes from the last [Federal Open Market Committee meeting] will give clues to the latest taper thinking on Wednesday as well.”
Investors will closely watch the wave of coming corporate earnings for the impact of rising energy prices and supply-chain complications, but the first major groups to release results are banks later this week.
Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS), and Goldman Sachs (GS) all report Thursday or Friday, and analysts noted that their outlooks for 2022 are likely to be more influential for stocks than the economic data releases on the calendar.
But minutes from the latest meeting of the Federal Reserve’s Federal Open Market Committee—the central bank’s monetary policy body—will also grab attention, as the Fed considers slowing, or tapering, its program of monthly asset purchases. Most expect the Fed to announce a taper in November.
Overseas, Tokyo’s Nikkei 225 rose 1.6% as investor sentiment was buoyed by comments from the new prime minister, Fumio Kishida, that he isn’t considering changes to Japanese capital-gains tax. The pan-European Stoxx 600 was 0.2% lower.
In commodity markets, the price of oil surged, with continuous contract futures for international benchmark Brent crude up more than 2% to above $$84.10 a barrel, with U.S. oil similarly up to above $81.40.
Here are eight stocks on the move Monday
Alibaba (9988.H.K.) stock rose 7.9% in Hong Kong, with Alibaba ‘s (BABA) U.S.-listed shares up 5.6% in the premarket. It rallied along with other Chinese tech stocks in Hong Kong, as Tencent (0700.H.K.) lifted 3%, Meituan (3690.H.K.) surged 8.4%, Baidu (BIDU) rose 6.4%, and JD.com (JD) increased 5.4%.
U.K. retailer Asos (ASC.U.K.) sank 8.6% in London, after issuing a profit warning for 2022 and the resignation of its CEO.
Danone (BN.France) fell 1.2% in Paris, after the food-products group was downgraded by HSBC to hold from buy amid rising costs and supply-chain issues.
Rio Tinto (RIO) rose 1.9% in London, after the mining giant made progress in enabling access to Covid-19 vaccines for fly-in-fly-out workers in Western Australia.
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