By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Tuesday, rebounding after the previous session’s sharp losses, although gains are likely to be modest ahead of Georgia’s Senate runoffs later in the day.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 27 points, or 0.1%, S&P 500 Futures traded 2 points, or 0.1%, higher, and Nasdaq 100 Futures climbed 8 points, or 0.1%.
The Dow Jones Industrial Average fell 1.3%, or 382 points, on Monday, its first negative start to the year since 2016, while the S&P 500 and the Nasdaq Composite both slipped 1.5%.
The focus Tuesday turns towards the dual runoff elections in Georgia that will determine the balance of power in the Senate.
A Democratic victory in both races could tip control of the Senate away from Republicans, allowing President-elect Joe Biden more leeway in getting additional stimulus through Congress - but also potentially less business friendly policies like higher taxes and greater regulation.
This political uncertainty comes as the new coronavirus variant, initially identified in the U.K., continues to spread in the U.S.. The U.K. has announced a national lockdown, citing the rapid growth of cases based on the new strain, while Germany is also expected to extend its own measures later Tuesday. This raises concerns that further lockdown measures will be needed in the U.S. to curb the contagion.
The economic data slate Tuesday centers around December ISM manufacturing PMI data, although speeches from a couple of officials from the Federal Reserve--John Williams (NYSE:WMB) and Charles Evans--may be of more interest given they come a day before the central bank issues the minutes of its last meeting of 2020.
In the corporate sector, the New York Stock Exchange no longer intends to delist three Chinese telecom giants--China Mobile (NYSE:CHL), China Telecom (NYSE:CHA) and China Unicom (NYSE:CHU)--a reversal of an announcement made only last week.
Oil prices edged higher Tuesday, rebounding after early losses, ahead of the industry’s weekly estimate for crude inventories. The market expects the data to show a draw of 4.8 million barrels when the numbers come out at 4:30 PM ET (2030 GMT). Elsewhere, OPEC and allied producers including Russia, a grouping known as OPEC+, will continue discussions Tuesday, split over whether or not to proceed with a planned increase of 500,000 barrels a day from February.
Geopolitical risk is also adding a modest premium: Iran has seized a South Korean vessel, saying the Asian country owed it $7 billion, while also announcing it would increase its nuclear activities.
U.S. crude futures traded 1.9% higher at $48.54 a barrel, while the international benchmark Brent contract rose 1.8% to $52.02.
Elsewhere, gold futures rose 0.3% to $1,953/oz, while EUR/USD traded 0.3% higher at 1.2283.