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The Monday Market Minute

  • Global stocks mixed as China’s latest tech crackdown keeps Asia in the red, while growth bets trigger rebounds in Europe.
  • Beijing demands big tech firms stop blocking links to rivals, while reports say Ant Group’s Alipay app could be broken up.
  • House Democrats plan corporate and capital gains tax hikes to pay for Biden’s spending plans, but the tallies fall short of the President’s ambitious targets.
  • Apple shares rebound from Friday’s slump, the worst in four months, ahead of its iPhone launch event Tuesday.
  • Oil prices extend gains as Gulf drillers continue to struggle with re-starts following the late August damage from Hurricane Ida.
  •  U.S. equity futures suggest a firmer open on Wall Street ahead key readings on inflation and retail sales later this week.

Wall Street futures powered higher Monday as the two main U.S. indices looked to snap their longest losing streak since February ahead of key readings on inflation and retail sales later this week.

Recovery bets are starting to emerge again following weeks of uncertainty linked to both the ongoing rise in Delta-variant coronavirus infections and the timing of stimulus withdraw from the world’s major central banks.

However, with the European Central Bank offering only a partial tapering of its bond purchases, while boosting growth forecasts, investors are now looking at an autumn glide path for stocks based on a similar move by the Federal Reserve later this month.

Much could depend on key data releases for inflation, which will be published on Tuesday, and retail sales, which are expected on Thursday.

In Washington, House Democrats have drafted plans to raise taxes in order to pay for President Joe Biden’s ambitious $3.5 trillion spending ambitions, taking aim at corporate levies and capital gains, but the levels will likely fall far shy of the President’s targets, underscoring the difficulty his economic agenda faces in a divided House with only a narrow Democratic majority.

Tech stocks are also likely to be in focus Monday following yet another crackdown on internet giants in China, where officials are demanding that companies stop blocking links to their rivals, and reports of a planned breakup of Ant Group’s popular payment app Alipay. 

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Ant Group parent Alibaba’s  (BABA) – Get Alibaba Group Holding Ltd. Sponsored ADR Report U.S.-listed shares were marked 1.6% lower in pre-market trading, while Tencent  (TECHY)  was little changed from Friday’s close at $62.37 each. 

In the meantime, stock futures suggest solid opening bell gains on the first trading day of the week, with contracts tied to the Dow Jones Industrial Average indicating a 200 point boost and those linked to the S&P 500 priced for a 24 point advance.

Nasdaq Composite futures are set for a 70 point gain, thanks in part to pre-market advances for big tech names such as Apple  (AAPL) – Get Apple Inc. (AAPL) Report and Tesla  (TSLA) – Get Tesla Inc Report.

Apple, in fact, is leading all pre-market gainers with a 0.8% rebound from Friday’s 3.3% slump, the biggest in four months, as investors picked through the implications of a California court’s ruling in its ongoing dispute with Fortnite maker Epic Games and looked to the tech giant’s ‘California Streaming’ iPhone launch event Tuesday.

The stock also got a ‘buy’ rating boost from Citigroup, with a $170 price target, from highly-regarded analyst Jim Suva. 

Virgin Galactic  (SPCE) – Get Virgin Galactic Report shares were also active, falling 3.4% to $24.31 each after billionaire Richard Branson’s space venture delayed a planned research mission with the Italian air force until mid-October.

Oil prices were also moving into the green, taking WTI crude 67 cents higher to $70.39 per barrel, as traders continue to price-in the impact of a delayed return to full capacity for drilling installations in the Gulf of Mexico following damage from Hurricane Ida.

Overseas, European stocks rebounded firmly with a 0.71% gain for the Stoxx 600, paced by energy stocks, ahead of August inflation data later this week.

In Asia, China’s big tech crackdown shaved 0.44% from the CS 300 in Shenzen, pulling the region-wide MSCI ex-Japan 0.8% lower heading into the close of trading, while hopes of more stimulus from Japan’s pending elections lifted the Nikkei 225 another 0.2% to 30,447.37 points – its highest since early 1990.