Investing.com – Wall Street futures pointed to a third consecutive session of gains that could take the S&P 500 to new record highs, while the Nasdaq Composite could mark a new high for the year, as investors looked ahead to a string of Federal Reserve (Fed) speakers and reacted positively to an optimistic start to second quarter (Q2) earnings season, while prospects for more monetary stimulus from the Bank of Japan (BoJ) combined with easing political tensions in Britain boosted appetite for riskier assets..
The blue-chip Dow futures gained 76 points, or 0.43%, by 10:59AM GMT, or 6:59AM ET, the S&P 500 futures rose 10 points, or 0.48%, while the tech-heavy Nasdaq 100 futures advanced 23 points, or 0.52%.
Alcoa (NYSE:AA) unofficially started the the Q2 earnings season after the close on Monday. Despite a decrease in both profit and revenue, the aluminum maker managed to beat consensus on both figures and shares jumped nearly 4% in Tuesday's pre-market.
Later in the week, investors will undoubtedly focus on bank earnings with JP Morgan’s release on Thursday, followed by Citigroup and Wells Fargo on Friday, as well as other financial companies such as BlackRock and PNC Financial Services.
On Tuesday, market players looked ahead to a string of comments from Fed officials to gauge the stance on the future path of U.S. monetary policy.
Much along the lines of Cleveland Fed president Loretta Mester who avoided commenting on the economy or interest rates in her speech in Sydney, Australia early on Tuesday, further clues were not expected from Fed governor Daniel Tarullo who will give remarks on shadow banking at 13:15GMT, or 9:15AM ET.
However, St. Louis Fed president James Bullard is set to speak at 13:35GMT, or 9:35AM ET, on Tuesday to the Gateway Chapter of the National Association for Business Economics, while Minneapolis Fed president Neel Kashkari is expected to give remarks at 21:30GMT, or 5:30PM ET, on the economy and the role of the Federal Reserve System.
On the economic calendar, the May job openings and labor turnover survey (JOLTs) will be released at 14:00GMT, or 10:00AM ET. While policymakers already received information from last Friday’s employment report for June, Fed chair Janet Yellen has commented that JOLTs is one of her favorite measures for the health of the U.S. labor market.
Elsewhere, risk appetite continued to be boosted by expectations for new stimulus measures. Japan’s Prime Minister Shinzo Abe flagged a fresh fiscal stimulus package on Monday after his ruling coalition won a landslide victory in the Upper House.
The coalition’s firmer grip means policymakers can more easily approve a bigger fiscal stimulus package to spur the economy. A stimulus package of at least 10 trillion yen ($97.9 billion) is expected.
The yen hit session lows against the dollar on continued speculation for further BoJ intervention after a report that the Japanese government was planning to cut inflation forecasts for this year and provide an estimate of 1.4% for fiscal 2017, well below the central bank’s target of 2.0%.
Investor sentiment was also boosted as political uncertainty in the U.K. eased with the imminent appointment of Home Secretary Theresa May as British Prime Minister.
In oil markets, crude was higher on Tuesday, bouncing off the prior session's two-month low as investors looked ahead to a monthly report from the Organization of Petroleum Exporting Counties due later in the session to gauge global supply and demand levels.
The report could show OPEC production rose by 300,000 barrels a day last month to a nearly eight-year high of 32.7 million barrels a day, due to steadily increasing output from Libya, Nigeria, Saudi Arabia and Iran.
U.S. crude futures jumped 2.95% to $46.08 by 11:00AM GMT, or 7:00AM ET, while Brent oil soared 4.20% to $47.73.