Consumer stocks were leaning lower pre-bell Monday, with the State Street Consumer Staples Select Sector SPDR ETF (XLP) down 0.3% and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) declining by 0.4%.
Taylor Morrison Home (TMHC) has agreed to be acquired by Berkshire Hathaway (BRK.A, BRK.B) for $6.8 billion in cash and a total equity value of $8.5 billion, the companies said. Taylor Morrison Home shares were up more than 22% in recent premarket activity.
Technology stocks were flat to higher premarket Monday, with the State Street SPDR S&P Semiconductor ETF (XSD) inactive and the State Street Technology Select Sector SPDR Fund (XLK) advancing by 1.2%.Nvidia (NVDA) has launched RTX Spark, a new AI chip that will feature in Microsoft (MSFT) Windows laptops and desktop personal computers. Nvidia stock rose past 2% and Microsoft shares were up more than 3% pre-bell.
Oil prices rose early on Monday, climbing off a six-week low as Iran and the United States traded attacks, dimming expectations for a peace deal in a war now entering its fourth month that has caused the largest-ever oil supply shock.West Texas Intermediate crude oil for July delivery was last seen up US$3.09 to US$90.45 per barrel after falling to the lowest since April 17 on Friday, while August Brent oil was up US$2.62 to US$93.74.The rise comes after the United States over the weekend attacked Iranian military sites, while The Guardian reported Iran on Monday targeted a U.S. military base in Kuwait.The hostilities have dimmed prospects for a end to the war that began on Feb. 28, when the United States and Israel launched strike on Iran, which responded by blockading the Strait of Hormuz, the narrow waterway that is the chokepoint for 20% of daily oil demand supplied by Persian Gulf countries.The price of the commodity rose well above US$100 per barrel in April as the war blocked exports from the Gulf, but have since moderated on hopes talks between the two countries hosted by Qatar will produce a deal that reopens the Strait, while some of the region's exporters have found alternatives to tanker shipments and demand has weakened due to high prices."Traders continue to price in the likelihood that any agreement could trigger a near-term surge in supply from vessels currently stranded inside the Persian Gulf. By now, it is also clear that several key release valves have helped prevent an even larger price spike. These include a sharp increase in US oil exports, a slump in Chinese crude imports, the use of UAE and Saudi Arabian pipeline infrastructure that bypasses the Strait of Hormuz, strategic petroleum reserve releases, and weaker end-user demand through a combination of demand destruction and use of domestic stockpiles," Saxo Bank noted.
The fresh week is starting off in "mixed" fashion, said Scotiabank.Oil is up by about US$3/barrel in terms of WTI and Brent after the United States and Iran exchanged blows and Israel continues to expand its war in Lebanon, which makes a deal with Iran even less likely, noted the bank.President Donald Trump keeps talking about a deal that is simply not credible and sounds more like a vain attempt at controlling energy prices as Iran digs in against giving up uranium and control of the Strait of Hormuz, stated Scotiabank. Iran remains aligned with the 'managed irresolution' strategy in a U.S. election year during which the Trump administration has entered a conflict from which there doesn't appear to be a credible exit.Bonds are broadly cheaper with sovereign yields up by 2bps-5bps across maturities and markets, added the bank.Stocks are mixed, with North American futures clinging to small gains versus flat overall European cash markets, according to Scotiabank. The US dollar (USD) is broadly firmer, but mostly against lower-weighted crosses.