Stock futures point higher to start a shortened holiday week

Stock futures led to a higher opening on Monday at the start of a shortened holiday week.

Contracts on the Dow gave nearly 100 points, or 0.3%, with about two hours left until the opening clock. The S&P 500 and Nasdaq also continued. Investors are starting the week on a strong note, with stock and bond market trading set to close fully on Thursday and early Friday for the Thanksgiving party.

Optimism about new contractual activity across a number of industries contributed to pushing the shares up in pre-market trading. Constellation Brands (STZ), the producer of Corona beer, is reportedly investigating an agreement to be combined with Coca-Cola-backed (KO) energy drink company Monster Beverage, according to a Bloomberg report on Monday. And the private equity company KKR & Co. made a bid of around $ 1[ads1]2 billion to bring Telecom Italia private, and sent the shares of the Italian telecommunications giant up sharply.

Investors also shook off the unrest from the end of last week, when increasing COVID-19 cases globally triggered new concerns about the spread of the virus. The Austrian government implemented a fourth national shutdown since the start of the pandemic, effective Monday and lasting at least 10 days, to try to stop jumping infections. Germany has considered a similar measure. The latest round of orders in place raised concerns for investors that a fall in consumer mobility could eventually put renewed pressure on economic activity domestically and abroad.

“In the United States, covid cases have declined but remained above summer lows and have risen recently,” Rubeela Farooqi, chief economist in high-frequency economics, wrote in a note on Monday. “We do not expect shutdowns in the United States. Experience with the Delta variant suggests that mandated shutdowns are not necessary to suppress activity. On guard against health risks from increasing numbers, people can voluntarily avoid high-contact activity.”

Elsewhere, traders are also following closely this week with President Joe Biden’s election of a new Federal Reserve chairman. The nomination is expected to go to either current central bank governor Jerome Powell or current Fed Governor Lael Brainard, and the decision can be announced at any time this week or beyond.

The new leader will be tasked with helping to lead the central bank as it fights in the coming months over whether the economic upswing has come enough to justify a deeper reduction in monetary policy support.

“The most important question right now is how high the Fed is finally raising interest rates,” John McClain, portfolio manager for Brandywine Global’s high return and corporate credit strategies, told Yahoo Finance Live on Friday. “Right now, the expectations are for two and a half to three increases in 2022, and will probably reach around 175 basis points on the Fed funds in the end.”

“The market and media are focused on a faster downsizing of the Fed and hikes earlier than June next year,” he added. “And more importantly, we see inflation and things that matter to the consumer, the prices of the pump, the food, the rent, everything goes higher. And the list goes on and on.”

More data on the inflation front is set to be released this week, which will further provide data suggesting the Fed may need to step in sooner rather than later to curb persistently high prices. The core index of personal consumption expenditure (PCE) from the Bureau of Economic Analysis on Wednesday, which serves as the Fed’s preferred measure of inflation, is likely to show 4.1% compared to last year, based on consensus data from Bloomberg. This will be the largest annual jump in around three decades.

8:48 AM ET: Chicago Fed National Activity Index returns to higher levels than expected in October

An index that tracks economic activity in the Chicago Federal Reserve region increased more than expected in October, with a jump in production in the Midwest contributing to the results.

The Chicago Fed National Activity Index rose to 0.76 in October from September, topping estimates at 0.10, according to Bloomberg compiled data. In September, the index came in at -0.18. Measurements in positive territory indicate above-average growth.

Production-related indicators contributed positively to the total index after deducting from the headline in September. Industrial production increased by 1.6% in October after a fall of 1.3% the month before. And employment-related indicators also accelerated, contributing 0.24 points to the index after contributing 0.16 points in September.

07:52 ET Monday: Stock futures progress

Here is where the markets traded Monday morning:

  • S&P 500 futures (ES = F): + 13.75 points (+ 0.29%), to 4708.25

  • Dow futures (├ůM = F): +88 points (+ 0.25%), to 35,637.00

  • Nasdaq futures (NQ = F): +64.75 points (+0.39%) to 16,639.75

  • Rough (CL = F): -0.13 dollars (-0.17%) to $ 75.81 per barrel

  • Gold (GC = F): – $ 8.90 (-0.48%) to $ 1,842.70 per ounce

  • 10-year Treasury (^ TNX): +4.5 bps to give 1.581%

Stock futures point higher to start a shortened holiday week

A trader works on the trading floor of the New York Stock Exchange in New York, USA, September 20, 2021. US stocks fell on Monday as selling pressure increased on Wall Street. The Dow Jones Industrial Average fell 614.41 points, or 1.78 percent, to close at 33,970.47, after falling more than 970 points in its low session. The S&P 500 fell 75.26 points, or 1.70 percent, to 4,357.73. The Nasdaq Composite Index fell 330.06 points, or 2.19 percent, to 14,713.90. (Photo by Xinhua via Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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