S&P 500, Nasdaq Futures Slip From Multi-Month Highs: As China's Economy Sneezes, Will Wall Street Catch A Cold?

The U.S. index futures are seen pulling back on Monday following buoyant performances in the week ended Aug. 12.

At the time of going to press, the S&P 500 futures and Nasdaq 100 futures were retreating 0.56% each. The Dow futures were down a more modest 0.44%. As seen for much of last week, small-caps could underperform, as reflected by the 0.76% pullback by the Russell 2000 futures. "In the U.S., we are in the 'dog days of summer' and the stock market is expected to meander listlessly on light trading volume for the remainder of August. Since CNBC was touting "meme" stocks last week and there was a lot of short covering in low quality companies, I am expecting that the stock market will begin to consolidate after an incredible run since June 16th," Louis Navellier, Founder Of Navellier & Associates told Benzinga.

Market Cues: The market seems to look toward a couple of Main Street data for drawing trading cues.

• The New York Federal Reserve is scheduled to release the results of the Empire State manufacturing survey at 8:30 a.m. ET. Economists, on average, expect the headline manufacturing index to slip from 11.1 in July to 5.5 in August. A reading above zero suggests the manufacturing sector in the New York region is in expansion territory. Incidentally, the index was in contraction territory in May and June before recovering.
• The National Association of Home Builders will release its housing market index for August at 10 a.m. ET. The metric is expected to remain unchanged at 55 for the month.
• Investors may also exercise caution ahead of the retail sales report for July and the minutes of the FOMC’s July meeting, both due on Wednesday. A few Fed officials are due to make public appearances this week and their comments could potentially sway the markets.

After a week of not-so-encouraging earnings reports, market attention turns to the unfolding week, which has a heavy dose of retail earnings. Notable among these are Walmart, Inc. WMT, Home Depot, Inc. HD, Lowe's Companies, Inc. LOW, and Target Corporation TGT

Tech names, including Cisco Systems, Inc. CSCO and Applied Materials, Inc. AMAT are also due to report this week.

Energy stocks could come under pressure as the WTI September crude oil futures have shed over 3% and are trading under the $89-a-barrel level.

Read Benzinga’s story on the past week’s market movement.

Stocks moving in premarket trading:

• Plus Therapeutics, Inc. PSTV shares are soaring after the company presented positive data for its lead drug Rhenium-186 Nanoliposome at a CNS-related medical conference held in Canada.
• Unity Biotech, Inc. UBX is running on the momentum it picked up from Friday’s session when it reacted to positive data on a macular edema treatment candidate.
• Meme stock Bed Bath & Beyond, Inc. BBBY is seen extending its recent rally.

Overseas Markets: The Asian markets meandered around, as investors in the region took stock of the soft data out of China. The Indian and South Korean markets remained closed for public holidays.

China’s National Bureau of Statistics announced a slew of economic data, and among these retail sales, industrial production and fixed asset investment all came in below expectations. The negative impact of the soft data points was mitigated by the Chinese central bank’s decision to announce an unexpected rate cut to jumpstart the COVID-19-hit economy. Japan’s Nikkei 225 rallied, taking cues from strengthening GDP growth in the second quarter.

European stocks opened sharply higher but have since given back much of the gains.

Data showing a let-up in inflationary pressure catalyzed a strong move on Wall Street in the week ended Aug. 12. The S&P 500 Index extended its weekly winning streak to four. The Dow Industrials and the S&P 500 Index ended the week at their highest level since early May and the Nasdaq Composite Index closed at its best level since late April.

In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY was down 0.54% to $424.78, and the Invesco QQQ Trust QQQ was trading 0.36% lower at $329.20, according to Benzinga Pro data.