Dow futures up nearly 400 points as investors count ahead of election

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Stock index futures rose sharply on Monday, after a poor end of October, with support tied to bullish global economic data on the eve of Election Day, as investors continue to watch for rising cases of COVID-19 and a continuous stream of business results.

Futures sur le Dow Jones Industrial Average YM00,
+ 1,41%
rose 374 points, or 1.4%, to 26,768, while S&P 500 ES00 futures,
+ 1,11%
advanced 37.05 points, or 1.1%, to 3,301.75. Nasdaq-100 NQ00 Futures,
+ 0,82%
gained 86.75 points, or 0.8%, to 11133.

Stocks ended lower on Friday, capping a losing week and month for major indices. The Dow DJIA,
-0,59%
fell 4.6% last week, leaving the blue chip gauge with a monthly loss of 6.5% – its biggest since March. The S&P 500 SPX,
-1,21%
saw a 5.6% weekly loss, leaving it down 2.8% for the month; the Nasdaq Composite COMP,
-2,45%
suffered a weekly decline of 5.5%, leaving it down 2.3% in October.The weekly declines in the Dow, S&P 500 and Nasdaq were the biggest since March.

What drives the market?

The US elections are looming on Tuesday. An unclear outcome remains the biggest risk, analysts said.

A latest Wall Street Journal / NBC News poll released on Sunday showed Democratic challenger Joe Biden holding a 10 percentage point lead – 52% to 42% – over President Donald Trump. Biden’s lead was essentially unchanged from an 11-point lead seen in mid-October, but the investigation described a tightening race when it comes to battlefield states that could determine the outcome in college electoral.

“As both candidates will opt for big increases in tax spending over the next few months, investors don’t seem to care too much about who wins. Markets will prefer a clear outcome – although it may not be, ”Fawad Razaqzada, market analyst at ThinkMarkets, said in a note.

The biggest risk is a contested outcome, he said, that “could trigger a massive sell off of stocks and other risky assets, and push the dollar and the safe-haven yen higher,” he said. declared.

Meanwhile, analysts said bullish economic data appeared to be a positive factor in Monday’s action.

Caixin’s Manufacturing Purchasing Managers Index, an indicator of activity in China’s manufacturing sector, rose in October – a positive sign for domestic demand that boosted Asian markets early Monday. It was a similar story in Europe after upbeat PMI readings.

The damage last week was largely linked to a spike in COVID-19 cases that triggered further restrictions on activity in European countries and fueled concerns about the fate of the US economic recovery.

The United States recorded 81,400 new cases on Sunday, a slight increase from the previous day but down from the record high at the end of last week, the Wall Street Journal reported, citing data from the University Johns Hopkins. The seven-day average of new cases continues to exceed the 14-day average in most states, the newspaper reported, indicating a continued acceleration in the spread of the virus.

Investors face another torrent of corporate results in the coming week, with 128 S&P 500 companies due to issue results. S&P earnings are expected to decline for a third consecutive quarter as they face the pandemic, but the drop appears to be less drastic than initially feared. After last week’s barrage of earnings, including strong results from big tech heavyweights, FactSet said its model is now looking for a 9.8% drop in mixed earnings for the S&P 500 from its call. initial to a 20.5% drop before the start of the earnings season.

Monday’s economic calendar features the final reading of the Markit Manufacturing Purchasing Managers Index at 9:45 a.m. (EST), followed by the more closely watched Manufacturing Activity Index. Institute for Supply Management at 10 a.m.

September construction spending figures are also due at 10 a.m.

Which companies are targeted?
  • These actions were at the center of the pre-marketing activity:

  • Clorox Co. CLX shares rose more than 2% after the cleaning and home care and health and wellness supplier reported profit that far exceeded expectations, driven by strong growth in sales due to the COVID-19 pandemic and the fact that people are spending more time at home.
  • Actions of Estee Lauder Cos. EL rose 4.3% after the company reported a tax profit and first quarter sales that beat expectations, with strong skincare sales performance offsetting weakness in makeup, but provided pessimistic outlook for the current quarter.

  • Lumber Liquidators Holdings Inc. LL shares rose 4.7% after the parquet seller reported well above expectations in third quarter earnings and sales.
  • Wingstop Inc.
    FAMILY,
    -2,98%
    shares rose more than 2% after the chicken chain said in preliminary third-quarter results that system-wide sales rose 32.8% to $ 509.2 million.
  • Actions of Norwegian Cruise Line Holdings Ltd.
    NCLH,
    + 5,45%
    took a plunge after the cruise line said it was extending the suspension of its cruises to include those scheduled until December 31.

What are other markets doing?

The yield of the 10-year Treasury bill TMUBMUSD10Y,
0,848%
was down 0.7 basis point to 0.852%. Bond yields and prices move in opposite directions.

The pan-European Stoxx 600 Europe SXXP,
+ 1,44%
rose 1.4%, while the London UKX FTSE 100 stock index,
+ 1,25%
gained 1.3%.

Oil futures were under pressure, with the US benchmark CL.1,
-0,81%
the 0.8% drop to $ 35.61 per barrel on the New York Mercantile Exchange Gold found support, with the December contract GCZ20,
+ 0,61%
up 0.7% to $ 1,892.80 an ounce.

L’indice ICE US Dollar DXY,
+ 0,00%,
a measure of the currency against a basket of six big rivals, was down less than 0.1%.

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