MARKET SNAPSHOT: Dow Poised To Stretch Out Historic Record Run, As Upbeat Mood Persists
More Fed speakers ahead, after officials strike hawkish tone at weekend
The rally in U.S. stocks showed no sign of slackening its pace on Monday, as futures for the Dow industrials and S&P 500 hinted at new records for their related indexes. Investors were drawing inspiration from overseas gains and an already solid start to the year for global equities.
Traders were also absorbing weekend comments from Federal Reserve officials, who spoke of the potential for more interest rates in 2018 on an strengthening U.S. economy.
What are stock futures doing?
Futures for the Dow Jones Industrial Average rose 40 points, or 0.2% to 25,310, while those for the S&P 500 index climbed 0.2 point to 2,743. Futures for the Nasdaq-100 index gained 0.8 points to 6,668.50.
All three major U.S. equity benchmarks posted record gains on Friday (http://www.marketwatch.com/story/sp-eyes-another-historic-record-run-with-us-jobs-data-on-deck-2018-01-05), finish the first week of the new year with solid gains. The S&P 500 and the Nasdaq each logged fourth-straight closing records, while the Dow snared a 220-point gain for its third record in a row.
In addition, the broad-based Dow closed at a record on the first four trading days of the new year, the first time since 1964 (http://www.marketwatch.com/story/the-sp-500-is-poised-to-do-something-it-hasnt-done-since-1964-2018-01-04), according to WSJ Market Data Group.
What's driving the market?
An positive view for stocks that persisted in 2017 has continued into early 2018. The recently passed tax package in the U.S. is seen as a contributing factor, as are higher commodity prices and a run of solid economic data.
Upbeat corporate results are said to have been a driver as well, and investors will watch for fourth-quarter earnings from big banks, which should kick off fourth-quarter earnings season this week. J.P. Morgan Chase & Co. (JPM) , BlackRock Inc (BLK) and Wells Fargo & Co. (WFC) are all scheduled to release reports on Friday.
Traders are expected fresh comments from Fed officials that could shed more light on the central bank's view of monetary policy. On Friday, Cleveland Fed President Loretta Mester told Reuters that she sees a strong U.S. economy as helping to make the case for four interest rate hikes in 2018. In a separate interview with Reuters on Saturday, (https://www.reuters.com/article/us-usa-fed-williams/williams-paints-benign-picture-of-fed-rate-hikes-strong-u-s-economy-idUSKBN1EV0QH) San Francisco Fed President John Williams said the central bank should lift interest rates three times this year, because of the lift tax cuts will provide.
"We're in a pretty good situation: the economy is doing great, everyone expects us to raise rates gradually ... and if the data change we can respond to that," said Williams, who added that he wasn't concerned about a sudden jump in inflation.
What are strategists saying?
"We'll get a better idea of exactly how Donald Trump's tax reform might impact U.S. corporate profits when earnings season kicks off this week. Don't worry about the big one-off charges as businesses revalue deferred taxes and take a hit on offshore earnings. Tax reform will still deliver a significant boost to company profits and remain an important linchpin for the bull market in 2018," said Lee Wild, head of equity strategy at Interactive Investor, in a note to clients.
What economic news is ahead?
An update on consumer credit is the only major data release on the calendar for Monday, with the November report due at 3 p.m. Eastern Time.
As for Fed speakers, Atlanta Fed President Raphael Bostic due to speak on the economic outlook and monetary policy at the Rotary Club of Atlanta at 12:40 p.m. Eastern.
Boston Fed President Eric Rosengren will take part in a panel discussion on whether Fed should stick to a 2% inflation target on Monday afternoon.
Which stocks are in focus?
Nvidia Inc. (NVDA) shares rose 1.2% in thin premarket trading. At a pre-CES news conference in Las Vegas on Sunday, the chip maker announced a partnership with Uber Inc (http://www.marketwatch.com/story/nvidia-lands-uber-as-self-driving-partner-to-kick-off-ces-2018-01-08). to provide the ride-hailing company with self-driving hardware.
Shares of Celgene Corp.(CELG) rose 1.5% in premarket after the biotech group announced a deal to buy blood-disease biotechnology company Impact Biomedicines (http://www.marketwatch.com/story/celgene-said-to-be-near-7-billion-deal-to-buy-impact-biomedicines-2018-01-07) for as much as $7 billion.
Read:Why 2018 is a make-or-break year for pharma (http://www.marketwatch.com/story/why-2018-is-a-make-or-break-year-for-pharma-2017-12-19)
What are other markets doing?
Asian markets continued to rally (http://www.marketwatch.com/story/asian-markets-largely-gain-though-regulatory-moves-weigh-in-china-hong-kong-2018-01-07), with Taiwanese stocks soaring to a 28-year high, but with Japanese markets closed for a holiday. In Europe, the Stoxx Europe 600 index was posting modest gains (http://www.marketwatch.com/story/european-stocks-stick-to-2-year-highs-despite-german-orders-disappointment-2018-01-08).
The ICE dollar index added 0.3% to 92.219, to hit a 2018 high (http://www.marketwatch.com/story/dollar-jumps-to-2018-high-after-fed-members-strike-hawkish-tone-2018-01-08).
Oil prices gained 0.5% to $61.72 a barrel, while gold slipped 0.2% to $1,319.20 an ounce.
In cryptocurrencies, bitcoin futures on the CME fell to $15,320 from Friday's settlement of $16,590 (http://www.marketwatch.com/story/bitcoin-pulls-back-further-from-17000-2018-01-08). That's after bitcoin spot prices topped $17,000 over the weekend, although they have pulled back Monday. Ether coins on the Ethereum blockchain tapped a new all-time high atop $1,200 on Monday, but are now lower, according to CoinDesk.
(END) Dow Jones Newswires
January 08, 2018 07:06 ET (12:06 GMT)