Monday, June 5, 2023

Stock futures are flat to start the week

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Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on February 01, 2023 in New York City. 

Michael M. Santiago | Getty Images

U.S. stock futures were flat on Sunday evening.

Futures tied to the Dow Jones Industrial Average added 25 points, while S&P 500 and Nasdaq-100 futures gained about 0.1% each.

Over the weekend, billionaire investor Warren Buffett commented on a slew of topics, including the latest banking crisis that rocked Wall Street, at Berkshire Hathaway‘s annual meeting in Omaha, Nebraska. The latest results from the conglomerate showed operating earnings increase 12% in the first quarter, while its cash hoard topped $130 billion.

Despite recent fears, Buffett said deposits should be safe in the banking sector, while also noting that commercial real estate is beginning to experience the consequences of higher borrowing costs. Even with its more than 20% stake in Occidental Petroleum, Buffett also indicated that Berkshire has no plans to take over the oil giant.

Stocks are coming off a volatile week that saw the Dow Jones Industrial Average and S&P 500 notch their worst weekly stretches since March. The losses came despite a late-week rally that saw volatile regional bank stocks jump off their lows.

The Dow on Friday added more than 546 points, while the S&P 500 and Nasdaq Composite popped 1.85% and 2.25% respectively. The gains came even after a stronger-than-expected April jobs report.

On the inflation front, investor attention this week turns to April’s consumer price index due out Wednesday, followed by the producer price index on Thursday.

Both reports “could help analysts decipher the direction of the more stubborn crevices of the economy where inflation remains sticky,” said Quincy Krosby, chief global strategist at LPL Financial.

Following last week’s rate decision from the Federal Reserve, traders are pricing in just a 9% chance for a hike at the central bank’s next policy meeting, according to CME’s FedWatch tool.

“Financial markets are hoping that it continues to remain subdued, but only if inflation cooperates,” Krosby said.

This week marks another busy earnings stretch, with results from Disney, PayPal, Occidental Petroleum and Tapestry on deck.

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