Published November 11, 2013
U.S. stock futures pointed to a moderate higher open for Wall Street on Monday, though a Veterans Day holiday will close government offices and bond markets, and there are no data or earnings on the schedule.
Investors may choose to focus on individual companies, like Amazon.com Inc. (AMZN), which announced a deal with the U.S. Postal Service to deliver on Sundays, and Twitter Inc. (TWTR), which dropped Friday after Thursday's blockbuster debut for the microblogging service.
Futures for the Dow Jones Industrial Average rose 21 points to 15702, while those for the Standard & Poor's 500 index added 1.6 points to 1767.70. Futures for the Nasdaq 100 index added 0.25 point to 3360.75.
No data are scheduled for Monday. Thursday will mark the week's economic highlight, when the Senate Banking Committee will question the nominee to chair the Federal Reserve, Janet Yellen.
It may be an opportune time to hear from Yellen, given that Friday's stronger-than-expected jobs data, which doubled Wall Street's forecast, has raised some expectations that the Federal Reserve could taper its bond-buying program sooner rather than later.
"Overall, we think markets will now be a bit jumpier ahead of December's FOMC [Federal Open Market Committee meeting] than they would have been with weaker data," said Jim Reid, strategist at Deutsche Bank, in a note. "This leads us to conclude that ultimately the Fed will hold off tapering again next month, which will then help risk assets.
"We still think the pace of tapering will be slow in 2014 as financial conditions will be threatened every time it looks like the pace will be increased. So a recipe for more volatility it seems as the 'will they won't they' swings one way and the other," said Reid.
The jobs report from Friday at first hit stock futures hard, but Wall Street stocks eventually advanced, closing near session highs after a soft University of Michigan/Thomson Reuters consumer-sentiment report. The S&P 500 index rose 23.46 points, or 1.3%, to close at 1770.61, slightly under its Oct. 29 record close, while the Dow industrials finished up 1.1%, topping a record close from Wednesday.
"The bounce-back for the S&P 500 on Friday was impressive as it recovered the previous day's losses," said Manoj Ladwa, partner at broker TJM Partners, in a note. "Given the improving economic backdrop, the upward bias remains firmly in place for the time being."
Also, Andrew Garthwaite, analyst at Credit Suisse, said in a note that the payrolls data back up his view of consolidation, not correction in the near term. Reiterating a 1,900 target for the S&P 500 by end of 2014, he said equities remain cheap relative to bonds until the 10-year is above 3.5%.
Within corporate news, Amazon (AMZN) could draw attention after news it has reached a deal with the U.S. Postal Service to make deliveries on Sundays to select customers in Los Angeles and New York, rolling out to more cities next year.
Shares of Twitter (TWTR) were off 2% in thin, premarket trading. The stock has been backtracking since surging more than 70% on its debut last Thursday. It fell 7.2% on Friday.
In overseas markets, European stocks traded moderately higher, while in Asia, the Nikkei climbed. The Philippines PSE Composite fell 1.8% after the country was hit by a super typhoon over the weekend, and the death toll was set to rise above 10,000.
Gold prices struggled after dropping close to 2% on Friday due to that strong jobs report, while oil prices also eased and the dollar index, a measure of the U.S. unit against six rivals, fell.