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US Equity Futures Rise as Investors Pare Bets on Fed Rate Hikes

Strategic Insights

— 2 min read

US equity futures increased on Monday, reflecting investors' reduced bets on the Federal Reserve's potential to accelerate interest rate hikes in the coming months. A slew of retail earnings reports and a key reading on October US retail sales are expected to capture the market's attention this week. Despite last week's hotter-than-expected inflation reading, the S&P 500 earnings season is on pace to deliver a 41.5% increase in collective profits, mitigating concerns about accelerated Fed tightening.

Key Takeaways:

  • US equity futures rose on Monday, with Dow Jones Industrial Average futures indicating a 150-point opening gain and S&P 500 futures priced for a 14-point move to the upside.
  • Retail earnings reports, including updates from Walmart, Home Depot, Target, and Macy's, are expected to dominate market focus this week.
  • The S&P 500 earnings season is on pace to deliver a 41.5% increase in collective profits, taking them to $451 billion.
  • Investors have shrug-off last week's hotter-than-expected October inflation reading of 6.2%, the fastest since 1990, and the chances of near-term acceleration in the Fed's tapering schedule have diminished.
  • Boeing shares were active in pre-market trading, buoyed by the world's biggest planemaker scoring two freighter sales at the Dubai Airshow and amid reports that authorities in China may be close to clearing the grounded 737 MAX for a return to service.
  • Tesla shares extended last week's slide after co-founder and CEO Elon Musk hinted at selling more of his Tesla shares in a Twitter spar with Democratic Senator Bernie Sanders.
  • Royal Dutch Shell's US-listed shares jumped 1.5% higher after the company announced it would move its corporate headquarters to London, abandon its dual corporate structure, and drop "Royal" from its name.
  • US oil prices slipped below $80 a barrel, potentially offering some relief for domestic gasoline prices, amid calls from lawmakers for President Joe Biden to release crude from the nation's Strategic Petroleum Reserve.
  • WTI futures for December delivery were marked $1.14 lower from Friday's close to change hands at $79.65 per barrel in early New York trading.

Statistics:

  • US equity futures rose with Dow Jones Industrial Average futures indicating a 150-point opening gain and S&P 500 futures priced for a 14-point move to the upside.
  • S&P 500 earnings season is on pace to deliver a 41.5% increase in collective profits, taking them to $451 billion.
  • October inflation reading: 6.2%, the fastest since 1990.
  • Royal Dutch Shell's US-listed shares jumped 1.5% higher after the company announced its corporate restructuring.
  • WTI futures for December delivery were marked $1.14 lower from Friday's close to change hands at $79.65 per barrel in early New York trading.

Sources:

  • The Street - "5 Things You Must Know Before Market Opens Monday"
  • The Street - "Boeing Stock Jumps on China 737 MAX Report, Dubai Airshow Sales"
  • The Street - "Tesla Falls as Elon Musk Hints at More Stock Sales in Bernie Sanders Taunt"
  • The Street - "Peabody Energy Stock Slides on Watered-Down COP26 Coal Agreement"
  • The Street - "Royal Dutch Shell's US-Listed Shares Jump 1.5% Higher After Corporation Restructuring"

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