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U.S. stock futures higher with eyes on ISM services and Fedspeak

Published 12/05/2016, 06:59 AM
© Reuters.  Wall Street futures point to higher open ahead of ISM non-manufacturing and Fed appearances
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Investing.com - Wall Street futures pointed to a higher open on Monday as investors looked ahead to a reading of U.S. service sector activity and a few appearances from members of the Federal Reserve (Fed).

The blue-chip Dow futures gained 88 points, or 0.46%, by 6:57AM ET (11:57GMT), the S&P 500 futures rose 9 points, or 0.43%, while the tech-heavy Nasdaq 100 futures traded up 24 points, or 0.50%.

The Institute of Supply Management (ISM) will release its non-manufacturing purchasing managers’ index for November at 10:00AM ET (15:00GMT) in what will be the main data point released on Friday.

Investors will also focus on Fed appearances on Monday is the last slate of remarks from monetary policy officials before the pre-meeting blackout period begins.

Voting member New York Fed president William Dudley will speak on the macroeconomic outlook at 8:30AM (14:30GMT).

Chicago Fed president Charles Evans was scheduled to speak at The Executives' Club of Chicago CEO Breakfast at 9:11AM ET (14:11GMT) on Monday. Though Evans does not have a vote on policy decisions this year, he will be entering the rotation in 2017.

St. Louis Fed chief and voting member James Bullard will speak on the U.S. economy and monetary policy at 2:05PM ET (19:05GMT).

Markets have fully priced in a 25 basis point hike at the December 13-14 meeting, according to Investing.com’s Fed Rate Monitor Tool.

Looking ahead to 2017, Fed fund futures put the chance of another 25 basis point hike in June at 53.2%.

Meanwhile, oil prices rose to levels not seen since July 2015 on Monday, amid hopes that an announced output cut by the Organization of the Petroleum Exporting Countries (OPEC) will help reduce a global supply glut and shore up prices.

OPEC and non-OPEC producers are scheduled to meet in Vienna on Saturday in what will be the first such gathering of its kind since 2002 and are expected to put the final nails in the landmark deal reached on November 30 to cut output.

U.S. crude futures rose 0.95% to $52.17 by 6:58AM ET (11:58GMT), while Brent oil traded up 1.05% to $55.03.

Elsewhere, investors shrugged off Italian voters’ rejection of a constitutional referendum and the subsequent resignation of Prime Minister Matteo Renzi.

European stock markets erased early losses and moved higher Monday with experts considering that the outcome was largely priced in and the European Central Bank has said it is ready to temporarily step up purchases of Italian government bonds should the referendum results drive up borrowing costs.

In a similar fashion, the euro turned around after initially tumbling to lows of 1.0507 against the dollar during Asian trade, its weakest since March 2015.

Buyers poured into the single currency with EUR/USD breaking back through 1.07 and hitting a two-week high.

Not all assets escaped unscathed as market participants sold off Italian bank stocks on concern that the no vote could complicate their plans to raise capital.

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