U.S. Stock Futures Rise as Stimulus Talk Weighed: Markets Wrap

U.S. equity futures opened higher after the White House appeared to shift tack and signaled the Trump administration is again leaning toward a large-scale stimulus bill. Crude surged ahead of a storm.

S&P 500 contracts were about 0.4% higher following news that Treasury Secretary Steven Mnuchin told Nancy Pelosi that President Donald Trump wants agreement on a comprehensive aid package. Futures were little changed in Japan, and rose in Hong Kong and Australia.

The U.S. benchmark earlier closed higher despite conflicting comments from Trump and Pelosi that whipsawed markets earlier in the day. Crude oil climbed as Hurricane Delta approached the already battered Louisiana coast. All eyes will be on the reopening of Chinese markets Friday after a week-long holiday. Treasuries earlier ticked higher and the dollar slipped.

Global equities are edging back toward last month’s all-time high with investors increasingly betting that a Joe Biden victory in the November election and gains by Democrats in Congress will support stocks. The scenario seems to be somewhat quelling volatility even as risks from a split in government to a resurgence of coronavirus cases threaten the economic rebound.

We are seeing “an increasing probability of, let’s call it, the blue wave,” Abby Joseph Cohen, senior investment strategist at Goldman Sachs Group Inc., said on Bloomberg TV. That “might not be such a bad thing, because that would give us more certainty with regard to policy, particularly with the use of fiscal policy to help our economy at this point.”

Elsewhere, Eaton Vance Corp. leaped after the investment firm agreed to be taken over by Morgan Stanley. IBM surged after saying it will spin off its infrastructure unit.

These are the main moves in markets:

Stocks

  • S&P 500 futures advanced 0.4% as of 7:12 a.m. in Tokyo. The gauge rose 0.8%.
  • Futures on Japan’s Nikkei 225 were little changed.
  • Hang Seng futures earlier added 0.5%.
  • Futures on Australia’s S&P/ASX 200 Index rose 0.2%.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%.
  • The yen was at 106.03 per dollar.
  • The offshore yuan was at 6.7386 per dollar.
  • The euro bought $1.1761.

Bonds

  • The yield on 10-year Treasuries was at 0.79%.

Commodities

  • West Texas Intermediate crude rose 0.4% to $41.35 a barrel.
  • Gold traded at $1,894.17 an ounce, little changed.

— With assistance by Sophie Caronello, Claire Ballentine, and Vildana Hajric

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