The Nasdaq led as futures set up for a powerful stock market rebound early Monday, as global stock markets sought to regain footing after their worst week in more than a year.
Small caps were up in line with the general action, lifting Russell 2000 futures 1.7%.
Global stock markets posted moderate recoveries, with benchmarks in Tokyo and Hong Kong each up more than 0.7%. Europe’s markets added to their early gains heading into afternoon trade, with London’s FTSE 100 up 0.4% and the CAC-40 in Paris ahead 0.5%, and Frankfurt’s DAX riding a 0.7% advance.
The question in the U.S. is whether an early rebound can hold through the day. The Dow industrials and the S&P 500 return from their worst week since January 2016 each facing tests of support at their 200-day moving averages. The Nasdaq composite, which also posted its worst week in 14 months, broke its 50-day line of support last week, but remains well above its 200-day level.
Another question: how will Facebook (FB) perform? Facebook inched up 0.4%, after fallout from the Facebook data breach and the Cambridge Analytica scandal drove the stock down almost 14% last week, in its worst five-day performance since shortly after its IPO in July 2012.
Microsoft, Caterpillar Rocket; Autodesk Eyes Buy Point
On the Dow, Microsoft powered up almost 4%, looking to grab back a piece of last week’s 7.9% loss and retake support at its 10-week moving average.
Caterpillar chalked off a 3% climb ahead of the open. Its shares slumped 7.8% last week, testing early February lows but holding within the chart’s two-month consolidation.
On IBD’s Leaderboard list, Autodesk (ADSK) rose more than 2%. The architectural design software developer slipped 5.7% last week, ending back below a 131.20 buy point after a powerful March 7 breakout.
Earnings releases are light on Monday, but Linux software developer and IBD 50 stock Red Hat (RHT) is expected to report fourth-quarter results after the close. Red Hat was up more than 2% in premarket action.
Also on the IBD 50 list, Casa Systems (CASA) jetted 6% higher. The December IPO gave up 5.9% last week, but remains extended above a 22.60 buy point in its IPO base, and 128% above its initial offering price.
China-based stocks showed premarket strength, with Tencent Holdings (TCEHY) up 4% and Baozun (BZUN) trading nearly 3% higher. Baozun remains extended above a 40.75 buy point following a March 6 breakout.
Defense giant Raytheon (RTN) climbed more than 2%, after posting a 2.1% gain last week to close within 4% of its Feb. 27 high. The stock, which is showing notable strength in its Relative Strength line, closed Friday almost 13% above a 190.35 buy point in a flat base.
Dallas, Chicago Fed Indexes Coming Up
Monday’s economic news is led by regional manufacturing gauges from the Dallas and Chicago Federal Reserve Banks, with a speech from New York Federal Reserve President William Dudley scheduled for 12:30 p.m. ET in Washington.
Oil was down slightly, back below $66 a barrel after threatening to break above a January high to its highest level since December 2014. The dollar was paring losses after last week’s dive to the lowest level vs. the yen since October 2106. Bonds trended lower, lifting the 10-year yield 3 basis points to 2.84%.
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