Strong hints of further Chinese stimulus and positive trading in Europe are setting US markets up for a higher open on Monday in a pullback from last week’s losses ahead of this week’s policy meeting of the Feral Reserve.
Stocks in mainland China rallied to new five-and-a-half year highs after Premier Li Keqiang said on Sunday that Beijing had plenty of scope to adjust policies in order to support the Chinese economy.
The strong Dollar ran roughshod over US equities last week in anticipation of the Federal Reserve removing its forward guidance language of “patience” over the timing for the first rate hike. Higher interest rates remove some of the necessity to invest in riskier assets like stocks to earn a return while also making borrowing more expensive for companies.
The US dollar continued to strengthen overnight and resulted in US oil prices slipping back to a six year low. The growing supply-glut as suggested by the IEA has helped oil prices drop again after having traded sideways since January. A renewal of the downtrend in oil prices could weigh on the energy sector of the major stock averages.
Futures suggest the:
S&P 500 will open 6 points higher at 2,059 with the
Dow Jones expected to open 58 points higher at 17,807 and the
Nasdaq 100 11 points higher at 4,325.
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