By Peter Nurse
Investing.com - U.S. stocks are seen opening firmly higher Monday, bouncing back from October’s sharp selloff, as investors look forward to the conclusion of a contentious presidential election campaign with the earnings season still in full flow.
At 8:05 AM ET (1205 GMT), S&P 500 Futures traded 44 points, or 1.4%, higher, the Dow Futures contract rose 440 points, or 1.7%, while Nasdaq 100 Futures climbed 110 points, or 1%.
Last week the major cash indices suffered their worst week since late March. The Dow Jones Industrial Average fell to its lowest level since July 31, while the S&P 500 and the Nasdaq Composite endured their second straight negative month.
U.S. President Donald Trump and Democratic rival Joe Biden enter the final full day of campaigning in their long and bitter race for the White House. Biden still has a comfortable lead in the national polls, according to a WSJ-NBC survey, but the polling in key swing states is a lot closer.
If polls are correct and Biden wins in a “blue sweep” with Democrats securing both congressional chambers it would bolster the outlook for rapid and large-scale fiscal stimulus, according to many analysts,
“Should the election fail to deliver a clear result and recounts and legal challenges mean that there is a longer period of uncertainty, market angst would likely rise, particularly given sharply rising Covid-19 hospitalizations and the potential for more containment measures,” said analysts at ING in a research note.
The U.S. reported over 99,000 new Covid-19 cases on Friday, beating its previous record set only a day prior, according to Johns Hopkins University. A number of countries in Europe have already announced new curbs as infections surge and hospitals start to fill up.
Meanwhile, the third-quarter earnings season is past its halfway mark, and dozens more companies are due to report during the week. Monday sees Mondelez (NASDAQ:MDLZ), Estee Lauder (NYSE:EL) and Loews (NYSE:L) all report.
The main economic release Monday is the ISM manufacturing PMI number for October, and this follows on from healthy equivalent figures in China and Europe.
However, the economic highlight of the week will be the Federal Reserve meeting. Its policy decision will be delivered a day later than usual given the election, on Thursday at 2 PM ET. Friday also sees the monthly jobs report, which is expected to show another small decline in the unemployment rate.
Oil prices slumped Monday, with more lockdowns in Europe adding to fears that global demand will be severely hit by the second wave of coronavirus cases across the northern hemisphere.
Add in uncertainty surrounding the U.S. presidential election as well as the fact Libya’s oil production is rising rapidly toward one million barrels a day, and the outlook looks grim for the crude markets.
U.S. crude futures traded 2.9% lower at $34.77 a barrel, while the international benchmark Brent contract fell 2.3% to $37.08, hitting their lowest levels since May.
Elsewhere, gold futures rose 0.5% to $1,889.30/oz, while EUR/USD traded 0.1% higher at 1.1652.