Stocks – U.S. Futures Point to Fresh Record Highs at Start of Fed Week
Investing.com – Wall Street futures pointed to an opening at new record highs on Monday as bullish sentiment continued to hold sway in markets at the beginning of the week that will have the Federal Reserve policy decision as its major focal point.
The blue-chip Dow futures gained 62 points, or 0.28%, at 6:49AM ET (10:49GMT), the S&P 500 futures rose 6 points, or 0.22%, while the tech-heavy Nasdaq 100 futures advanced 12 points, or 0.20%.
Buying sentiment in stocks that left Wall Street at record highs on Friday continued into the week with European and Asian markets rallying across the board, as global investors returned to perceived riskier assets amid cooling geopolitical tensions.
As the weekend passed with no signs of missile launches from North Korea, traders decided to continue the upbeat outlook on equities.
U.S. Secretary of State Rex Tillerson insisted on Sunday that the U.S. was striving for a “peaceful solution” with Pyongyang, telling CNBC in an interview that he was interesting in bringing “North Korea to the table for constructive, productive dialogue”.
However, White House National Security Adviser H.R. McMaster did say on Sunday that all options remained on the table.
Nevertheless, Asian shares hit their strongest level since late-2007, with benchmarks in South Korea, Hang Seng and mainland China all ending in positive territory. Japan markets were closed for a public holiday.
In Europe, shares rose to six-week highs in mid-morning trade, with almost all major bourses across the region in the green. Portugal's stocks outperformed after the euro zone country returned to an investment grade rating after more than five years.
With no major economic reports on Monday’s agenda stateside, traders looked ahead to the Fed’s two-day policy meeting beginning on Tuesday.
The U.S. central bank is widely expected to keep interest rates unchanged at the conclusion of this week's meeting on Wednesday, but is likely to announce a plan to start shrinking its massive $4.5 trillion balance sheet in an effort to normalize policy.
Markets will also be looking for further clues on the timing of the next Fed rate hike, with around 59% of market participants expecting a move by December, according to Investing.com's Fed Rate Monitor Tool.
While waiting for the week’s main event, the dollar hit an eight-week high against the yen, supported by a rise in U.S. Treasury yields.
On the company front, Northrop Grumman (NYSE:NOC) confirmed that it would buy missile and rocket maker Orbital ATK (NYSE:OA) for $7.8 billion.
Walgreens Boots Alliance (NASDAQ:WBA) was reported to be ready to revise its agreement to buy some Rite Aid (NYSE:RAD) stores in a move meant to resolve outstanding antitrust concerns.
Meanwhile, oil prices retreated from a five-month high on Monday as investors took profits after West Texas Intermediate oil recorded weekly gains of 5% on optimism over the outlook for global supply and demand.
U.S. crude futures fell 0.26% to $50.31 by 6:51AM ET (10:51GMT), while Brent oil lost 0.22% to $55.50.
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