Dow futures rose Monday, indicating stocks may be ready to pick up where they left off last week, with a renewed boost coming from signs of a thaw in U.S.-China relations.
Another win for the Dow Jones Industrial Average would mark its eighth-straight advance, the longest positive streak since one that ended Sept. 20, 2017.
Among Federal Reserve speakers in the spotlight Monday, Cleveland Fed President Loretta Mester in a speech in Paris said the central bank may need to raise interest rates above 3%.
What are markets doing?
Dow Jones Industrial Average futures YMM8, +0.36% jumped by 85 points, or 0.3%, to 24,908, while those for the S&P 500 ESM8, +0.21% rose 5.60 points, or 0.2%, to 2,735. Nasdaq-100 futures NQM8, +0.31% climbed 19.75 points, or 0.3%, to 6,979.25.
On Friday, the Dow DJIA, +0.37% tacked on 91.64 points, or 0.4%, to 24,831.17, making for a seventh straight positive session — its longest streak of wins since a similar stretch that ended Nov. 8, 2017. The S&P 500 SPX, +0.17% rose 0.2%, while the Nasdaq Composite Index COMP, -0.03% dipped less than 0.1%.
Last week, the Dow rose 2.3%, the S&P 500 advanced 2.4%, and the Nasdaq climbed 2.7%.
What is driving the markets?
Stocks could keep up the positive momentum this week on the view markets have turned a corner on concerns that have been holding investors back, including trade issues with China.
Some fresh optimism was injected into the market ahead of the trade talks tentatively scheduled for this week between the U.S. and China. President Donald Trump said in a tweet on Sunday that he was working with Chinese President Xi Jinping to keep struggling Chinese telecom giant ZTE ZTCOY, -15.37% 0763, +0.00% in business.
The company was hit by sanctions roughly a month ago. The measures ban American companies from selling to it, but Trump tweeted that he has asked for a stay of that order, as ZTE said its survival is being threatened.
Optimism over corporate earnings and a pullback in bond yields and the dollar all contributed to gains last week. Rising interest rates can peel money away from stocks, and a stronger currency can be a headwind for companies with overseas businesses, making their products more costly.
No top-tier U.S. economic reports are on the calendar for Monday, but the rest of the week will be busy enough, with retail sales due Tuesday and indicators showing the state of the housing market coming as well.
Economic preview: Inflation pause lends helping hand to borrowers
A busy week for Federal Reserve speakers kicked off with Cleveland Fed President Loretta Mester, who was speaking at the Global Interdependence Center’s central banking series in Paris, France earlier on Monday. She said the Fed may be looking at higher interest rates to achieve stable inflation and low unemployment goals.
St. Louis Fed President James Bullard is slated to speak about cryptocurrencies at the CoinDesk Consensus 2018 conference in New York at 9:40 a.m. Eastern.
What are strategists saying?
“Markets are hoping that the olive branch extended by President Trump to Chinese telecoms company ZTE ... — and other supportive tweets yesterday suggesting that the trade talks this week would ‘all work out’ — are an indication that he is stepping back from his hard-line approach,” Rebecca O’Keeffe, head of investment at Interactive Investor, said in a note.
What stocks are in focus?
Shares of Tesla Inc. TSLA, -1.30% could be in focus after reports that Matthew Schwall, a senior executive who is the company’s main technical contact with U.S. safety regulators, has left for rival Waymo LLC. That comes after news Tesla’s top engineer overseeing auto development was taking a sabbatical.
Xerox Corp. XRX, +2.86% could be in focus after the technology firm said it would abandon its merger deal with Fujifilm Holdings Corp. 4901, +1.56% as it reached a settlement with two of its biggest shareholders.
What are other markets doing?
European stocks SXXP, -0.11% traded mostly lower in early action.
Oil futures dipped, with West Texas Intermediate crude CLM8, -0.21% slipping 0.5% to $70.38 a barrel.