By Peter Nurse
Investing.com - U.S. stocks are seen opening firmly higher Tuesday, continuing Monday’s hefty gains, as investors hope for a clear political result after one of the most contentious presidential election campaigns in history.
At 8:25 AM ET (1205 GMT),S&P 500 Futures traded 43 points, or 1.3%, higher, the Dow Futures contract rose 442 points, or 1.7%, while Nasdaq 100 Futures climbed 72 points, or 0.6%.
The Dow Jones Industrial Average closed 1.7% higher Monday, posting its biggest gain since Oct. 7. The S&P 500 index gained 1.2%, its largest advance since Oct, 12, while the NASDAQ Composite index underperformed, adding just 0.2%.
U.S. President Donald Trump and Democratic rival Joe Biden will cast their respective votes later Tuesday, as the highly contentious presidential election campaign comes to its climax.
The latest polls still have Biden in a comfortable lead in the national surveys, but the tally in all-important swing states like Michigan, Wisconsin and Pennsylvania, where the electoral college margin could be decided, looks like being a lot closer.
That said, investors appear to be betting on a Democratic sweep of the White House and Congress, which would likely result in a more stable political climate and, in all probability, a generous fiscal stimulus package.
“This is based on the $3.4 trillion stimulus proposed by House Democrats over the summer that would front-load support for household incomes and deliver relief for state and local government,” said analysts at ING, in a research note.
Meanwhile, the number of new Covid-19 cases in the United States hit another record high last week, according to a Reuters analysis. The number of new cases reported each week has risen for four straight weeks, with the biggest increases seen in the last two weeks.
This sharp increase in coronavirus cases has already been seen in Europe, prompting many governments in the region to introduce new partial shutdowns in an attempt to halt the surge in the virus before the Christmas holiday season.
Meanwhile, the third-quarter earnings season continues on Tuesday with Bayer (OTC:BAYRY), Fox (NASDAQ:FOXA) and Humana (NYSE:HUM) reporting before the bell.
Economic data releases Tuesday include the Johnson Redbook index, ISM NY business conditions, and September factory orders, but most eyes will be on the Federal Reserve meeting and the monthly employment report later in the week.
Oil prices edged higher Tuesday, helped by talk the major oil producers will look at rolling over oil output restrictions into 2021. Eyes will also be on the release of the API crude inventories for last week, released later Tuesday.
The Organization of the Petroleum Exporting Countries and allies, including Russia, are due to increase supply by two million barrels per day in January, but are now under pressure to push back this decision due to weak market conditions.
U.S. crude futures traded 0.2% lower at $36.75 a barrel, while the international benchmark Brent contract fell 0.4% to $38.82.
Elsewhere, gold futures rose 0.1% to $1,893.45/oz, while EUR/USD traded 0.2% lower at 1.1659.