Monday November 22nd

22-11-2021

Stock futures rise as market enters holiday-shortened week

U.S. stock index futures rose in early trading Monday ahead of the holiday-shortened week, a historically strong period for Wall Street. Futures on the Dow Jones Industrial Average gained 77 points but came off their highs of the morning after Germany Chancellor Angela Merkel warned that tighter restrictions would be put in place for the unvaccinated. S&P 500 futures and Nasdaq 100 futures also both traded in positive territory. Tesla shares rallied, gaining more than 2% after CEO Elon Musk said the electric vehicle maker’s Model S Plaid could be launched in China by the spring of 2022. In other early action, Moderna shares continued their upward momentum, rising 1.8% in premarket trading after the FDA last week cleared the company’s booster shot for all U.S. adults. The stock is up 14.1% over the past five sessions. On the downside, Activision Blizzard dropped 1.4% following reports that CEO Bobby Kotick said he would consider resigning if he can’t fix the company’s culture. That news came following reports that Kotick was aware of sexual misconduct within the organization. Stocks have a track record of posting gains in Thanksgiving week, which will potentially set the stage for a year-end Santa rally. Since 1950, the last five trading days of November have been traditionally positive, according to Sam Stovall, chief investment strategist at CFRA. Meanwhile, there’s a two-thirds likelihood the market is up on the day before Thanksgiving Day and a 57% chance the day after the holiday, the strategist said. One big market-moving event this week will be President Joe Biden’s nomination for the next Federal Reserve chief. Biden is expected to announce his pick in the coming days, with current chairman Jerome Powell and Governor Lael Brainard considered the most likely candidates. Many expect a more dovish central bank if Brainard prevails, meaning it would take longer to tighten policies including raising interest rates. “I do think in the shortened week, that is probably going to be the biggest driver of market action,” said Jeff Schulze, ClearBridge Investments investment strategist. “If Brainard is nominated as Fed chair, it wouldn’t be a surprise to me to see some near-term volatility. Usually, the market tests a Fed chair.” The S&P 500 came off a winning week, up 0.3%, on the back of a slew of stellar earnings reports from big retailers and strong U.S. retail data. The tech-heavy Nasdaq Composite jumped 1.2% last week. The blue-chip Dow fell 1.3% during the period, however. Month to date, the S&P 500 is up 2%, on track to post its second positive month in a row. The equity benchmark has gained more than 25% in 2021. U.S. markets will be closed Thursday on Thanksgiving Day. The stock market closes early at 1 p.m. ET on Friday. Shares in Asia-Pacific were mixed on Monday as China kept its benchmark lending rate unchanged. The Hang Seng index in Hong Kong dipped 0.39%, closing at 24,951.34. In mainland China, the Shanghai composite rose 0.61% to close at 3,582.08 while the Shenzhen component advanced 1.411% to 14,960.66. In Japan, the Nikkei 225 closed about 0.1% higher at 29,774.11 while the Topix index declined fractionally to 2,042.82. Over in South Korea, the Kospi gained 1.42% to close at 3,013.25. Oil prices fell on Monday as rising COVID-19 cases in Europe and a potential release of Japanese oil reserves raised concerns about both oversupply and weak demand. Brent crude was down 56 cents, or 0.7%, at $78.33 a barrel at 1157 GMT and U.S. West Texas Intermediate (WTI) crude fell 54 cents, or 0.7%, to $75.40. Gold eased on Monday, hovering near a two-week low, weighed down by a firmer dollar and expectations that rising inflation might push the Federal Reserve to accelerate its monetary policy tightening. Spot gold fell 0.2% to $1,841.20 per ounce by 7:24 a.m. ET, after hitting its lowest since Nov. 10 at $1,836.00. U.S. gold futures eased 0.6% to $1,841.30.