X Futures for the Dow Jones industrial average, S&P 500 index, Nasdaq 100 on early Monday signaled a weaker start to the week as the big-cap indexes approach their 50-day moving averages after their worst weekly losses in months.
Markets are unclear if President Trump's agenda can move forward after the failed ObamaCare replacement effort. Oil ministers met Sunday to discuss extending production cuts. Meanwhile, Red Hat (RHT) is in buy range with earnings on tap, while Google parent Alphabet (GOOGL) tries to stop the stem the bleeding in GOOGL stock and YouTube's brand.
Futures for the Dow Jones industrial average fell nearly 0.4% vs. fair value. The S&P 500 index and Nasdaq 100 were 0.5% below fair value. Small-cap Russell 2000 futures sank 0.8%.
Last week the Dow industrials, S&P 500 index and Russell 2000 suffered their worst losses since Trump's election. The Nasdaq composite had its worst week of 2017.
IBD'S TAKE: Red Hat is one of several stocks at or near buy points with earnings on tap this week. To see which companies they are and what analysts expect, check out IBD's weekly Investing Action Plan.
Alphabet
Google's parent is in a public relations fiasco as it became clear that it placed advertisements against racist or other objectionable material on YouTube. Alphabet is scrambling to fix the problem, as Dow components Wal-Mart (WMT), Verizon Communications (VZ), AT&T (T), Johnson & Johnson (JNJ) have pulled their YouTube ads, along with PepsiCo (PEP), Starbucks (SBUX) and others.
Alphabet shares fell every day last week, losing 4.3% and dropping below a buy point and their 50-day moving average.
Oil Extension?
Ministers from several oil-producing nations taking part in output cuts met in Kuwait met Sunday to discuss an extension. Five countries have backed such a move to continue reducing global inventories, but Russia told Bloomberg TV that it was not ready to commit to an extension.
OPEC and its allies are in a bind. They want to signal to markets that supplies will be kept in check, pushing up prices. But that's sent a signal to U.S. shale producers to continue to ramp up activity.
Oil prices fell again last week, closing Friday at $47.97 a barrel. Dow component Exxon Mobil (XOM) is trading essentially at a 52-week low. Fell Dow component Chevron (CVX) is trying to find support at it 200-day moving average.
Crude oil futures edged lower overnight.
Red Hat
Red Hat will report fiscal fourth-quarter results late Monday. Analysts expect a 17% rise in adjusted earnings per share to 61 cents, with revenue up 14% to $618.7 million.
Red Hat, a Linux software specialist, cleared an 82.83 buy point on Feb. 21, but has traded above and below that entry since then. On Friday, shares edged up 0.2% to 82.96, back in buying range.
Asian Trading
Japan's Nikkei fell 1.5% in Monday intraday trading. Stocks fell 0.6% in Korea, 0.2% in Australia and 0.3% in Hong Kong. China's Shanghai composite rose 0.1%.
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