By Peter Nurse
Investing.com - U.S. stocks are set to open with strong gains Monday, after the number of new Covid-19 infections across the U.S. fell to its lowest in two months and the Trump administration took an aggressive stance on fast-tracking treatments for the virus, potentially allowing a quicker economic recovery.
At 7:05 AM ET (1105 GMT), S&P 500 Futures traded 27 points, or 0.8%, higher, the Dow Futures contract rose 269 points, or 1%, while Nasdaq 100 Futures gained 105 points, or 0.9%. These indexes are on course for a fifth straight month of gains.
The U.S. Food and Drug Administration on Sunday said that it had issued ‘emergency use approval’ for the use of blood plasma from recovered patients as a Covid-19 treatment option.
The Financial Times also reported that the White House is considering by-passing normal U.S. regulatory standards to fast-track an experimental coronavirus vaccine from the U.K. for use in America before November’s election.
Over the weekend President Donald Trump expressed frustration at the slow pace of approval for coronavirus treatments, linking the FDA to the “deep state” conspiracy theory.
Figures from Johns Hopkins meanwhile showed the number of new infections on Sunday fell to below 35,000, the lowest since late June.
The tech sector has led the rebound in equities for months as the coronavirus crisis accelerated reliance on the Internet for commerce, and this rally has further to run, according to analysts at investment bank J.P. Morgan.
"In contrast to the dot-com bubble, the current rally has been supported by strong earnings delivery," J.P. Morgan's equity strategists said in a note on Monday. "In addition to resilient earnings growth, tech has healthy balance sheets and strong cash flow generation, again in contrast to the 2000 episode."
The economic data slate is largely empty Monday, and investors are going to focus on Thursday’s speech by Federal Reserve Chair Jay Powell at the Jackson Hole conference, looking for indications on how the central bank will try to manage the long-term economic recovery.
Oil prices edged higher Monday, as Hurricane Marco and tropical storm Laura wrought havoc in the Caribbean and Gulf of Mexico, leading to over 58% of offshore oil production in the region being shut down.
U.S. crude futures traded 0.8% higher at $42.66 a barrel, while the international benchmark Brent contract rose 0.7% to $45.25.
Elsewhere, gold futures rose 0.5% to $1,956.90/oz. EUR/USD traded 0.3% higher at 1.1835.