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Stocks - U.S. Futures Higher Ahead of Retail Week; Dow Futures Up 70 Pts

·3 min read

By Peter Nurse

Investing.com - U.S. stocks are set to edge higher at the open Monday, with investors still confident about the strength of the U.S. economic recovery despite the fraught political situation reducing the likelihood of additional stimulus in the near future.

At 7:05 AM ET (1105 GMT), US 500 Futures traded 11 points, or 0.4%, higher, the Dow Futures contract rose 70 points, or 0.3%, while Nasdaq 100 Futures gained 82 points, or 0.8%.

The Dow Jones Industrial Average cash index has gained over 5% in August, traditionally the weakest month of the year, while the S&P 500 and the NASDAQ Composite have posted gains in three of the last four weeks. The benchmark S&P 500 is just 0.4% away from February’s record close.

Goldman Sachs (NYSE:GS) lifted its year-end price target for the S&P 500 on Monday to 3,600 from 3,000, as the relentless rally off the March lows leaves previous predictions out of date.

Large stimulus injections have fueled the climb in the S&P 500 since the March sell-off sparked by the pandemic. However, a new fiscal boost looks unlikely near term with the two U.S. political parties seemingly far apart over the size and terms of the latest relief bill.

Additionally, the Democratic national convention starts on Monday, traditionally the starting point for November’s presidential election, suggesting that least some policymakers may have other things on their minds.

In corporate news, while the second-quarter earnings season is mostly over, major retailers are yet to post results, although not on Monday.

Walmart (NYSE:WMT), Home Depot (NYSE:HD), Kohls (NYSE:KSS), Lowe's (NYSE:LOW), Target (NYSE:TGT) are among the retailers on deck, with industrial Deere (NYSE:DE)&Co set to wrap up the week.

As of Friday, 457 companies in the S&P 500 have posted results, of which 81.4% have come in above a decidedly low expectations bar, according to Refinitiv data.

Meanwhile, the Covid-19 virus continued to cause havoc, with the United States surpassing 170,000 coronavirus deaths over the weekend, according to data from Johns Hopkins University.

Oil prices edged lower Monday, after hitting new post-pandemic highs over the weekend, amid caution ahead of this week’s meeting of the OPEC+ producer bloc to discuss production levels.

The group has a tricky job ahead - increasing supply even as demand remains substantially below last year’s levels - without crashing prices.

China and the U.S. postponed a meeting originally scheduled for the weekend to review their January phase one trade deal, saving both sides the embarrassment of acknowledging that China isn't buying anywhere close to the volumes of U.S. products it promised to buy in January.

U.S. crude futures traded 0.1% lower at $41.97 a barrel, while the international benchmark Brent contract fell 0.3% to $44.69.

Elsewhere, gold futures rose 0.8% to $1,964.90/oz, settling into a lower range after registering all-time highs above $2,000. EUR/USD traded 0.1% higher at 1.1848.

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