U.S. Stock Futures Push Higher Amid 3 Merger Deals
U.S. stock futures are rising after two weeks of stock market sell-off. Is this a sign of bigger upward movements to come? The positive sentiments came from news of high profile acquisition over the weekend. The Dow futures traded 0.82% higher. The S&P 500 and Nasdaq 100 futures were also in positive territory, moving 1.18% and 1.7% higher respectively as of 6.58 a.m. ET.
There are a few reasons for the strong start of the week. This came after Nvidia (NVDA Stock Report) reported that it will acquire wireless chip designer Arm Holdings from SoftBank for $40 billion. In addition, China’s ByteDance has reportedly agreed to sell the U.S. operations of TikTok to Oracle (ORCL Stock Report). So if you’re looking for any trading activity on Monday, the tech sector could be a good place to start.
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Coronavirus Vaccine Hopes Boosts Market Confidence
Coronavirus cases worldwide have surpassed 29 million. Covid-19 deaths are now more than 900,000. In the U.S. alone, coronavirus cases have hit 6.70 million, with deaths above 198,000. However, most importantly will be the impact on market sentiment this week as AstraZeneca (AZN Stock Report) restarted their final-stage trial of its coronavirus vaccine. The trial was paused last week after one fell ill. Thus far, it’s still unclear what the reason was. Perhaps it was related to the vaccine. But it is just as likely that it was totally unrelated.
Pfizer (PFE Stock Report) and BioNTech (BNTX Stock Report) are looking to expand their late-stage coronavirus vaccine trial to 44,000 people, from 30,000. That would allow testing on a more diverse population. The AstraZeneca and Pfizer-BioNTech vaccine candidates are generally seen as furthest along, with Moderna (MRNA Stock Report) following closely behind. With a slight ‘positive’ development from the vaccine manufacturers, the market appears to be optimistic. This likely contributed partly to the rise of the U.S. stock futures on Sunday evening.
Apple’s September 15 “Time Flies” Event; What To Expect?
Apple (AAPL Stock Report) unveils its new lineup of Apple devices on September 15 at 10 a.m PT. This may pave the way for the arrival of the iPhone 12, which will finally find the company embracing 5G technology. On top of that, almost certainly, the trillion-dollar tech company would also introduce a new Apple Watch. The device continues to be a big seller for the company, not to mention being a category-leading product.
And strings for an “Apple One” bundle have shown up in code for an Apple Music app for Android. This is suggesting that Apple may be close to launching its rumored range of subscription bundles. While consumers are no doubt very excited to check out the latest products and services from Apple, investors are trying to get a grasp on how the stock would perform around the event date. Will Apple surprise investors with news that can send AAPL stock higher this week? Stay tuned.
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Federal Reserve Policy Meeting
The Federal Open Market Committee’s (FOMC) meeting on Tuesday and Wednesday should be closely watched by investors. This comes after weeks following the central bank’s annual economic policy symposium. Recall that officials announced a new framework which is more tolerant of inflation overshooting the 2% target. This reduces the need for officials to raise rates to curtail a run-up in inflation.
With many expecting the Fed to maintain its dovish stance on policy, investors will continue assessing the recovery of the global economy from the pandemic. Traders are mindful of recent news on volatility in the options markets. After all, that poses a question mark on the sustainability of the market rally in the past few months.
Gold Gains On Weaker Dollar
Gold prices rose on Monday, supported by a weaker dollar and expectations that the Fed will adopt a dovish stance like we just mentioned. It rose nearly 0.3% to $1,946.67 per ounce as of 3.43 a.m. ET. As major central banks continue to roll out stimulus measures and keep interest rates low, gold prices will continue to find strong support because of its role as a hedge against inflation.
“The gold market is leaning towards the Fed’s policy,” said Stephen Innes, chief market strategist at AxiCorp, adding that the U.S. central bank might not change the current narrative, but there is a strong belief in the market that it would be able to trigger inflation.