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Oil, dollar could have stocks over a barrel

The ebb and flow of oil prices and the direction of the dollar could be important factors for stocks Tuesday, as traders also focus on a few earnings.

"We really go from catalyst-heavy to catalyst-light," said Art Hogan, chief market strategist at Wunderlich Securities. "Last week, we had 160 S&P 500 companies reporting. This week we've got none of that. ... It's a back-end loaded week in terms of data. … You tend to fall back to some of the macro things. More people are talking about the strong dollar and weak energy prices."

There are also a few data points Tuesday — the NFIB small business survey at 6 a.m. EDT, and wholesale trade and Job Openings and Labor Turnover Summary at 10 a.m. Earnings are expected from Credit Suisse, Lumber Liquidators, Dean Foods, Nokia, SodaStream, EchoStar and Norwegian Cruise Line before the bell. Disney, Electronic Arts, Nuance Communications, Ambac Financial and Planet Fitness report after the close.


Stocks closed mixed Monday with the S&P 500 up 1 at 2,058, and the Dow down 34 at 17,705. Energy stocks were 1.2 percent lower, the second worst group after materials. West Texas Intermediate crude futures fell 2.7 percent to $43.44 per barrel, as worries about Canadian fires near the oil sands abated and markets shifted focus to U.S. inventories.

"There's record speculative length in the futures market for oil," said John Kilduff, partner with Again Capital. "It won't take much more downside movement in oil for there to be a rush for the exits." American Petroluem Institute oil inventory data is released Tuesday at 4:30 p.m. EDT.

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The dollar index was higher Monday for a fifth day, gaining 0.3 percent.

"The dollar was so grossly oversold it was due for a correction. The flip side is there's a lot of problems in Europe now. They're starting to worry about the fact Brexit could affect the U.K., and if they spin out of Europe it could break up the whole European Union," said Boris Schlossberg, BK Asset Management managing director, foreign exchange strategy. The U.K. vote on leaving the European Union is June 23.

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Bond traders are expecting another wave of corporate issuance Tuesday, after Monday's $24.5 billion of investment-grade deals. It was the second biggest day of the year for issuance and the fifth largest ever, according to Informa Global Markets. Deals this week could include Apple and Kraft Heinz, according to Informa.

Yields were lower in the Treasury market, where three government auctions are expected this week. On Tuesday, the Treasury auctions $24 billion in three-year notes at 1 p.m., and on Wednesday, $23 billion in 10-year notes. On Thursday, there will be a $15 billion 30-year bond auction.

"Deal pricing has had some impact," said George Goncalves, head of rate strategy at Nomura. The 10-year yield fell below 1.75 percent in late afternoon trading.

"I think the auctions in the Treasury market will be interesting, because they're competing with this other supply. On their own, they look relatively OK, but in competition with all this other credit paper it will be interesting to see what other demand we get," he said.

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Traders are also watching inflation data from China overnight after weak trade data shook commodities prices globally. Copper was down 2.2 percent.