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U.S. Stock Futures Rise Ahead Of An Eventful Week

U.S. stock futures climbed in early morning trading on Monday following a 4-week losing streak on Wall Street. Dow Jones futures rose modestly on Monday morning, along with S&P 500 futures and Nasdaq futures. It could suggest that we are looking at a new stock market rally attempt this week. Last week, Wall Street ended on a high note, despite declines earlier in the week.

“When markets get to the kinds of extremes we saw a month ago, it tends to take a very deep correction before the worst is behind us,”..“It also usually sees several ‘waves’ of a decline.” – Matthew Maley, chief market strategist at Miller Tabak.

The major indexes are all trading in the positive territory. The Dow, S&P 500, and Nasdaq 100 futures were all in positive territory, moving 1.28 %, 1.29%, and 1.7% higher respectively as of 7.48 a.m. ET. All the major indexes went up for the first time after four consecutive weeks of a weak opening. The moves are promising considering Asian and European stocks moved higher this morning. Also, there are signs that there are still chances of a further fiscal stimulus bill before the election day could give stocks a boost to start the week.

First U.S. Presidential Debate

Recent volatility in the stock market has investors bracing themselves for one more looming uncertainty; the November presidential election. Of course, it is tempting for investors to make bold moves in anticipation of a political shakeup on November 3. But many experts say the outcome of the election would only play a negligible role in shaping the returns of long-term investment portfolios. So if you fancy yourself a long term investor, perhaps there is no need to spend too much time thinking about the impact of the election on your portfolio.

“The debate may not see an immediate reaction per se, but where you might see a reaction is in the post-debate polling data,” if it shows Biden’s lead over Trump narrowing or widening- Rebecca Felton, senior market strategist at Richmond, Va.-based RiverFront Investment Group.

According to historical data, markets don’t usually make substantial moves following the first debates. According to Dow Jones Market Data, in election years since 1960, the median move by the S&P 500 the day after the first presidential debate was a fall of -0.14%. That is a pretty inconsequential number. More so if you are already getting used to the volatility in the market this year.

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September Jobs Report

The unemployment rate is an important metric by the Federal Reserve to determine the health of the economy. Investors also use the most recent unemployment report to gauge the health of specific sectors. That could inform the decision to underweight or overweight certain sectors. Of course, while it’s not foolproof, many still consider it a useful piece of information. There has been a growing perception that the U.S. economy has been suffering for long enough that the worst must be behind us. 

According to Gregory Daco, chief U.S. economist at Oxford Economics, many now think the economy is no longer at its worst. After all, the unemployment rate has dropped from a peak of 15% to 8.4%. Of course, it is forgivable why many may think so, when they see economic activities resuming throughout the country. However, what is easy to forget is that the unemployment rate is still higher than that in many prior recessions. The question is, how long will it take before we see a full recovery?

Could Investors Expect Another Successful IPO From Palantir?

Investors have shown great interest in tech IPOs this September. Tech stocks enthusiasts have been scooping up stocks. You just have to look at the strong performance from Snowflake (SNOW Stock Report), JFrog (FROG Stock Report), and Unity (U Stock Report). However, not everyone shares the same view. Instead, many believe this week will be a big test for the IPO market.

Mike Novogratz, founder, and CEO of Galaxy Digital Holdings said there’s a big imbalance right now in supply and demand, given how many new offerings are coming to market during a period of high insider selling.

Many analysts have some reservations about Palantir’s IPO, which is expected to make public debut this Wednesday. According to many news reports, the company could be valued at nearly $22 billion in its trading debut. That’s a hefty valuation for a company that’s never turned a profit. Some may also wonder if its growth prospect is in the same league as the others.

Earnings Season Wrapping Up

Earnings reports this week will mostly come out on Tuesday and Thursday. IHS Markit (INFO Stock Report), McCormick (MKC Stock Report), and Micron Technology (MU Stock Report) will release results on Tuesday. Meanwhile, on Thursday we will see reports from Conagra Brands (CAG Stock Report), PepsiCo (PEP Stock Report), and Constellation Brands (STZ Stock Report). Alibaba Group Holding (BABA Stock Report) is hosting its virtual investor events from Monday through Wednesday.

Will they be announcing anything exciting? Finally, on Friday, shareholders of Noble Energy will vote on its proposed sale to Chevron (CVX Stock Report). So, whether it is the terms of the first presidential debate, the September jobs report, the performance of recently listed tech stocks, or earnings, there’s a lot to digest this week.

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