High 5 Issues to Know in The Market on Monday

Investing.com – Here are the top five things you need to know in financial markets on Monday, March 11:

1. Boeing Stock Set for Rough Day

Boeing’s stock will be in focus after a 737 Max 8 plane operated by Ethiopian Airlines crashed shortly after taking off from the capital of Addis Ababa on Sunday, killing all 157 people on board.

The accident renews safety questions about the newest version of Boeing’s popular 737 airliner. It came less than six months after a deadly crash involving an identical brand-new jet in Indonesia.

In response to the crash, China’s civilian aviation authority ordered all Chinese airlines to temporarily ground their Boeing 737 Max 8 plane.

Boeing’s 737 MAX is the newest version of the best-selling airliner in history. The Max is a central part of Boeing’s strategy to capture as much as possible of the booming demand for airliners, most of which comes from Asia.

Boeing (NYSE:BA) shares were down around 9% to $384 in premarket trade by 5:35AM ET (10:35 GMT). Shares of the U.S. plane manufacturer have gained 31% this year, making it the best-performing of all Dow components.

2. Dow Futures Point to Triple-Digit Loss

U.S. stock futures pointed to a mostly lower open at the start of the trading week, with futures contracts on the Dow Jones Industrial Average Index – where Boeing has the largest weighting – set for a triple-digit loss.

The blue-chip Dow futures were down 182 points, or about 0.7%. Futures for the S&P 500 and Nasdaq were little changed.

Elsewhere, European stocks were slightly higher, with talk of a merger between Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) lifting the battered banking sector. London’s resources-heavy FTSE rose 0.8%, outperforming its Eurozone peers thanks to stronger oil prices.

Earlier, markets in Asia closed mixed, but mainland Chinese shares rallied on hopes of more policy support for the slowing economy.

3. U.S. Retail Sales

The Commerce Department will release data on retail sales for January at 8:30AM ET (12:30 GMT).

The report could provide a clearer sense of direction for the economy after a mixed employment report on Friday that showed solid wage growth and a drop in unemployment, even though the headline nonfarms payroll number fell way short of expectations at a measly 20,000 jobs.

The consensus forecast is that the report, delayed by roughly three weeks due to the government shutdown, will show retail sales were flat in January, following a plunge of 1.2% in December, which was the largest decline since September 2009.

Excluding the automobile sector, sales are expected to rise 0.4%, bouncing back from a drop of 1.8% in the preceding month.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Consumer spending accounts for as much as 70% of U.S. economic growth.

4. Powell Not in A Hurry to Change Policy

Federal Reserve Chair Jerome Powell said on Sunday the U.S. central bank does “not feel any hurry” to change the level of interest rates again as it watches how a slowing global economy affects local conditions in the U.S.

Rates are currently “appropriate,” Powell said in a wide-ranging interview with CBS’s 60 Minutes news show in which he called the current rate level “roughly neutral,” meaning it is neither stimulating the economy nor holding it back.

The interview crossed a range of issues, including the health of the financial system, the impact of the opioid crisis on the workforce, and President Donald Trump’s aggressive criticism of central bank rate hikes.

Regarding the president, Powell said that he did not think Trump, by law, had the power to fire him over a policy dispute.

5. Saudi Arabia to Extend Deep Oil Output Cuts

Saudi Arabia plans to cut its crude oil exports in April to below 7 million barrels per day (bpd), while keeping its output “well below” 10 million bpd, a Saudi official said on Monday, in an effort to drain a supply glut and support oil prices.

The kingdom agreed 10.311 million bpd as its production target under an OPEC-led supply cut agreement.

OPEC and other producers such as Russia, colloquially known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from Jan. 1 for six months.

International Brent crude oil futures were at $66.23 per barrel, up 49 cents, or about 0.75%, while U.S. West Texas Intermediate crude oil futures rose 42 cents, or around 0.7%, to $56.48 per barrel.

— Reuters contributed to this report