US Stock Futures Rise on Stimulus Talks, China Growth

US stock futures rose on Monday, pointing to gains for key indices early in the week as investors assessed the latest stimulus package and China’s economic recovery potential.

The futures S & P 500 advanced to 0.7%, suggesting the gauge would increase after New York opens. The contract with the Tech-Heavy Nasdaq-100 climbed 0.9%.

US stocks gained muted gains last week as investors tugged at continued high Kovid-19 cases, uncertainty over the presidential election, and fiscal stimulus measures ahead of Washington.

The latest data shows that China’s GDP grew by 4.9% year-on-year in the third quarter.


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The market has written to a large extent that a major US government package is likely to be approved before November. 3. But investors have continued to monitor the progress of negotiations between lawmakers and the White House, with a view to providing relief to households or that pre-election trading would be a bonus.

Over the weekend, House Speaker Nancy Pelosi told the White House that it was until Tuesday to reach an agreement with the Democrats. If a deadline passes without agreement, ongoing negotiations to form a trillion-dollar comprehensive relief law within the next two weeks would be unlikely. Mrs Pelosi and Treasury Secretary Steven Menuchin spoke Saturday night, but many differences remain.

“It seems that American politicians are shaking their heads in a more constructive way in terms of fiscal stimulus,” said Altaf Kasem, head of investment strategy for Europe, Middle East and Africa at State Street Global Advisors. A fiscal stimulus package is not urgently needed, but “if they can reach a multilateral agreement across the line before the election, it will be huge.”

BoP Paribas Chief Cross-Asset Strategist Robert McAdie said that with Kovid-19 continuing to spread, further fiscal stimulus would be necessary to support the economy..

“Without fiscal stimulus you will see a new wave of unemployment, and a new wave of delinquencies and defaults, and will certainly weigh on growth,” he said.

Chinese officials said on Monday that gross domestic product expanded 4.9% in the third quarter from a year earlier, which has returned China’s economy to a pre-coronovirus trajectory, with its economy booming half a year after the epidemic. Has come. Other economic indicators released on Monday offered additional signs of strength: China’s headline unemployment figure, a survey of urban unemployed, fell to 5.4% in September.

“If you are looking at consumer numbers, manufacturing numbers, they are still much stronger than China,” Mr. Kasam said. “It’s starting us on a positive tone, and we think it’s a topic that needs to be continued.”

Investors in China and Hong Kong received mixed reactions to the latest economic data, as the figure of 4.9% growth in the third quarter fell short of expectations. The Shanghai Composite Index closed down 0.7%, reversing initial gains of more than 1%. Hong Kong’s Hang Seng Index yields 0.6% more profit at the end of the day.

Iris Pang, chief economist at Greater China at ING Bank NV in Hong Kong, said the latest data was quite good and the market has only overreacted based on headline growth numbers. “They did not digest the entire report,” she said.

Investors said a number of concerns about US political uncertainty have recently surfaced.

“It seems that it is not possible to contest elections, it is less likely to proceed,” said Mr. Kasam. “The worst outcome of the US election for markets would have been a contested, devalued election.”

US corporate earnings season will pick up pace with Netflix this week,

Tesla and AT&T are among the leading companies to report in the coming days.

Shares of Texas-based shell driller Concho Resources increased premarket by 3.3% on the news ConocoPhillips acquired the company in a $ 9.7 billion all-stock deal.

Shares of American Equity Investment Life Holding declined 9.4% in offshore trading. The company on Sunday rejected a takeover offer from Massachusetts Mutual Life Insurance and Ethane Holding,

And it said that Brookfield reached a partnership with Asset Management instead.

Shares of oil field service company Halliburton declined 1.1%, as it reported a third-quarter loss of $ 17 million from a profit of $ 295 million in the prior quarter. Technology giant International Business Machines will report after the market closes.

Shares in Front Yard Residential jumped 35%, according to US Virgin Island-based real-estate investment trusts, stating that it had agreed to be acquired by a group led by investment firm Pretium Partners LLC And funds managed by Ares Management Corp.

In a deal worth approximately $ 2.4 billion.

“It’s going to be all about guidance,” said Andrew Cole, Head of Multi Assets in Portrait Asset Management in London, and the guidance has largely been better than expected. “He said,” Everyone knows that this year’s earnings will be quite scary from a year-over-year point of view, so when we start thinking about earnings, it’s going to be 2021 that counts, “he said. said.

The yield of 10-year Treasury notes tumbled 0.743% to 0.770% on Friday. The WSJ Dollar Index, which tracks the currency against a basket of others, was down 0.4%.

The main gauge for US crude oil futures slipped 0.3% to $ 40.98 per barrel.

Overseas, Stocks Europe 600 ticked up 0.1%. Euronext NV, which operates exchanges across Europe, said it had solved a technical problem that had halted trading in some markets.

Write Misha Frank-Duval at [email protected]

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