Stock futures moved to the upside Monday morning, extending last week’s gains and holding near all-time highs at the start of a busy week for new economic data.
Contracts on the S&P 500 and Nasdaq each traded a tick above the flat line after the indexes set record highs last week. Dow futures also edged up, with gains in shares of Amgen and Home Depot leading the way higher.
Optimism that the Federal Reserve will not immediately and jarringly remove its highly accommodative monetary policies has helped buoy equities over the past several sessions. Namely, Federal Reserve Chair Jerome Powell said in a virtual Jackson Hole Symposium speech on Friday that an “ill-timed policy move” while the pandemic is still denting economic activity could be “particularly harmful,” suggesting the central bank leader was inclined to ensure the recovery was on a steady path forward before changing policies.
Still, he noted that “it could be appropriate to start reducing the pace of asset purchases this year” in the Fed’s quantitative easing program if the recovery continues as expected.
Powell “did three things very, very right, and obviously the markets are celebrating that,” Julian Emanuel, BTIG chief equity and derivatives strategist, told Yahoo Finance on Friday, adding that the first was in keeping the speech succinct.
“Second thing he did right is, he sent the rest of the Fed governors out over the prior four weeks to basically tell us all that the taper was coming,” Emanuel added. “He merely had to reiterate, and reiterate softly, that message, which he did very effectively.”
“Then the third thing … is that he really tackled inflation head on. He knew that that’s been the preoccupation of the markets for these last couple of months,” Emanuel said. “While he didn’t give any new real evidence as to why he views inflation as transitory, he did cite the ongoing moderation in commodity prices and the view that past history would indicate that inflation is likely to be transitory.”
Investors are set to receive more data on the strength of the labor market recovery this week, with the Labor Department’s August jobs report due out on Friday. Consensus economists are looking to see that 750,000 payrolls came back during the month, representing an eighth straight month of gains but a slight pullback from July’s 943,000.
The report will be another important data point in informing the Fed’s monetary policy plans going forward. Federal Reserve Governor Christopher Waller told Yahoo Finance’s Brian Cheung on Friday that he would support beginning the Fed’s asset-purchase tapering process as soon as this fall if the August jobs report shows another strong payroll gain. The Fed next convenes for a policy-setting meeting on Sept. 21 and 22.
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7:32 a.m. ET Monday: Stock futures edge higher
Here were the main moves in markets as of 7:32 a.m. ET:
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S&P 500 futures (ES=F): +4 points (+0.09%) at 4,509.50
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Dow futures (YM=F): +16 points (+0.05%) to 35,419.00
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Nasdaq futures (NQ=F): +18 points (+0.12%) to 15,444.50
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Crude (CL=F): -$0.29 (-0.42%) to $68.45 a barrel
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Gold (GC=F): -$1.00 (-0.05%) to $1,818.50 per ounce
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10-year Treasury (^TNX): -0.3 bps, yielding 1.309%
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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