Stock Futures Rise on Stimulus Deal, China Data

Stock-index futures made a higher start for Wall Street on Monday. Expert analysts were building support for continued hopes for a stimulus package and positive economic data from China.

Futures on the Dow Jones Industrial Average Stocks rose 193 points, or 0.7%, to 28,601. S&P 500 SPX futures were up 27.80 points, or 0.8%, to 3,490.

Nasdaq 100 futures rose 127.50 points, or 1.1%, at 11,925.50.

Stocks were up on Friday, snapping a three-day losing streak. This allowed the DJIA and the SPX to each log a third straight weekly gain. 

The Dow was up 0.1% for the week, ending Friday at 28,606.31. The S&P 500 had a 0.2% weekly rise to close at 3,483.81. The Nasdaq Composite was up 0.8% for the week to end at 11,671.56.

What’s Driving the Market?

Analysts said hopes remain for lawmakers and the White House to come to an agreement on a stimulus plan.  The room for a pre-election deal appeared to run short. 

A top aide to House Speaker Nancy Pelosi, D-Calif., in a tweet said, an agreement was needed within 48 hours. That is to get a package approved before Election Day on Nov. 3.

Hussein Sayed, chief market strategist at FXTM wrote, it’s hard to say whether a bill will be approved or not. However, the earlier the bill is signed, the better quicker households, the economy and equity markets benefit, he said.

U.S. Treasury yields and futures rising are signs of optimism that a deal could be reached prior to 3 November. But chances of disappointment remain high.

The stimulus package that arrives after the election should satisfy the markets, some analysts have argued.  

Stronger-than-expected retail sales data on Friday highlighted economic momentum and signaled that the consumer remains in good shape overall. This should allow consumption to hold up through Q4.

Earnings Season Moves into Full-swing

Eighty-four S&P 500 companies and eight Dow components have set to deliver Q3 results. Investors will be paying close attention to results from Tesla Inc. and Netflix Inc. among the heavy hitters.

Data showing China’s gross domestic product expanded by 4.9% in Q3 buoyed global equities. That was from a year earlier falling short of expectations. 

But it brings China’s growth trajectory closer to forecasts made at the beginning of the year. They were for a 2020 expansion between 5.5% and 6%.