Stock Market Update

Equity futures point to a lower opening to start the week as crude oil surges past the $100 per barrel mark to its highest level since mid-2022. The sharp rise in oil prices amid the conflict in Iran was the central theme to last week's action that saw the major averages finish firmly lower across the board. 

Bloomberg reports that the UAE and Kuwait have reduced oil production as the Strait of Hormuz remains nearly closed. 

President Trump says there is no timetable for the Iran war, telling reporters, "I never project that, whatever it takes," according to CBS News.

Crude oil futures have pulled back from their highest levels after reports that the G7 will discuss the joint release of energy reserves, according to Financial Times. 

The market has an important week of economic data that will include the February CPI report (Briefing.com consensus 0.3%) on Wednesday and the January PCE Price Index on Friday (Briefing.com consensus 0.3%). The spike in oil prices will not show up in these prints, though it is worth noting that the expected monetary policy path has been muddied as investors fear the higher energy prices will seep into inflation readings. 

Earnings are on the lighter side this week, though the market will hear from Oracle (ORCL 151.01, -1.95, -1.3%) on Wednesday, which traded nicely higher last week as software names put together a solid rebound from recent lows. 

In corporate news:

• China is warning of global chip shortages, according to Reuters. 
• NVIDIA (NVDA 176.10, -1.78, -1.0%) backed Nscale has reached a $14.6 billion valuation, according to CBS News. 
• Novo Nordisk (NVO 39.06, +0.48, +1.2%) is aiming to sell its weight loss drugs on the Him & Hers (HIMS 22.60, +6.86, +43.6%) platform, according to Bloomberg. 

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region had a poor start to the week amid a continued rise in the price of oil, which has soared past the $100/bbl mark to its highest level since mid-2022. Japan's Nikkei: -5.2%, Hong Kong's Hang Seng: -1.4%, China's Shanghai Composite: -0.7%, India's Sensex: -1.7%, South Korea's Kospi: -6.0%, Australia's ASX All Ordinaries: -2.9%.

In news:

• Japanese refiners requested a release from the national reserve, but an official decision has not been made yet.
• Later in the night, Financial Times reported that G7 nations are discussing a potential joint reserve release, which helped pressure crude oil futures from a high near $120/bbl.
• Japan's real wages for January increased for the first time in 13 months with base salaries growing at their fastest pace since 1992.

In economic data:

• China's February CPI 1.0% m/m (last 0.2%); 1.3% yr/yr (expected 0.9%; last 0.2%). February PPI -0.9% yr/yr (expected -1.1%; last -1.4%)
• Japan's January Overall Wage Income 3.0% yr/yr (expected 2.5%; last 2.4%). January Leading Index 112.4 (expected 113.0; last 110.3) and January Coincident Indicator 2.5% m/m (last -0.5%)

Major European indices trade in the red amid pressure on sentiment stemming from an ongoing rise in the price of oil. STOXX Europe 600: -1.6%, Germany's DAX: -1.3%, U.K.'s FTSE 100: -1.1%, France's CAC 40: -1.9%, Italy's FTSE MIB: -1.6%, Spain's IBEX 35: -1.4%.

In news:

• Lufthansa and ASML are among the laggards while British homebuilder Barratt Redrow is also under pressure amid rising Gilt yields.
• French President Macron said that G7 officials are likely to hold a joint call this week to address surging energy prices.

In economic data:

• Eurozone's March Sentix Investor Confidence -3.1, as expected (last 4.2)
• Germany's January Factory Orders -11.1% m/m (expected -4.2%; last 6.4%). January Industrial Production -0.5% m/m (expected 1.0%; last -1.0%); -1.1% yr/yr (last 0.4%)
• Swiss February SECO Consumer Climate -30 (expected -29; last -30)