Futures rise as focus shifts to midterm elections
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[November 07, 2022] By
Shubham Batra and Amruta Khandekar
(Reuters) -U.S. stock index futures rose on
Monday even as Beijing reaffirmed over the weekend that it would stick
to its strict COVID-19 curbs, while investor focus shifted to Tuesday's
U.S. midterm elections that will determine control of Congress.
Republicans have picked up momentum in polls and analysts see a split
government, with the GOP winning the House of Representatives and
possibly the Senate, as the likely outcome possibly hindering Democratic
President Joe Biden's agenda.
"A split government is generally good for the equity markets because
that puts a bit of a gridlock on certain policy changes," Daniela
Hathorn, market analyst at Capital.com, said.
"In general we have seen stocks perform better after a split government,
I expect that to continue."
U.S. consumer prices for October are due to be released on Thursday.
Economists expect the annual consumer prices inflation to slow to 8.0%
and the core numbers to dip to 6.5%.
Both the midterm elections and inflation are likely to provide major
cues for Wall Street after a volatile week dominated by mixed jobs
report and hawkish comments from Fed Chair Jerome Powell.
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At least seven Fed officials are scheduled to speak this week, with
traders pricing in a 69% chance of a half-point rate hike next month to
4.25%-4.50%.
All the three major U.S. stock indexes are in bear market territory,
from their previous record closing highs.
The benchmark S&P 500 index has lost nearly 20.9% year-to-date due to
geopolitical tensions between Russia and the West and fears that
aggressive policy tightening by the Fed could cause a U.S. recession.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., October 17, 2022.
REUTERS/Brendan McDermid
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At 6:37 a.m. ET, Dow e-minis were up 191 points, or 0.59%, S&P 500
e-minis were up 23.75 points, or 0.63%, and Nasdaq 100 e-minis were
up 71 points, or 0.65%.
The CBOE Volatility index, also known as Wall Street's fear gauge,
rose to 25.32 points a day after closing at its lowest since Sept.
13.
Apple Inc fell 1% in premarket trading after the company said it
expected lower shipments of premium iPhone 14 models than previously
anticipated.
Meta Platforms Inc jumped 3.3% following a report that the Facebook
parent was planning to begin large-scale layoffs this week that will
affect thousands of employees.
U.S.-listed shares of Chinese firms JD.Com Inc, Alibaba Group
Holding Ltd and Baidu Inc rose between 1.6% and 2.8%, despite
Beijing's reaffirmation of its strict COVID-19 policies over the
weekend.
Digital World Acquisition Corp surged 33.2% as former U.S. President
Donald Trump hinted at another White House bid. The blank check firm
has agreed to take social-media startup Trump Media & Technology
Group Corp public.
(Reporting by Shubham Batra and Amruta Khandekar in Bengaluru;
Additional reporting by Shreyashi Sanyal and Devik Jain; Editing by
Shounak Dasgupta)
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