By Peter Nurse
Investing.com - U.S. stocks are set to open higher Friday, bouncing back after the recent selloff with a series of M&A deals suggesting increasing corporate confidence despite rising coronavirus cases and political uncertainty.
At 7:10 AM ET (1100 GMT), S&P 500 Futures traded 41 points, or 1.3%, higher, the Dow Futures contract rose 336 points, or 1.2%, while Nasdaq 100 Futures climbed 175 points, or 1.6%.
The major U.S. cash indexes weakened last week, their fourth week of losses in a row. This selloff has largely been duplicated overseas, and companies are now seeing bargains to be snapped up.
Cleveland-Cliffs (NYSE:CLF), the largest U.S. producer of iron ore pellets, has agreed to buy the U.S. assets of the world's largest steelmaker ArcelorMittal (NYSE:MT) for about $1.4 billion in cash and shares.
Caesars (NASDAQ:CZR) Entertainment is in advanced discussions to buy the U.K. bookmaker William Hill (LON:WMH), while the Wall Street Journal reported that battered energy companies WPX (NYSE:WPX) and Devon Energy (NYSE:DVN) are in talks to merge.
However, despite this apparent corporate confidence there still remains a great deal of uncertainty over the political and economic landscape, as well as a rising number of coronavirus cases.
President Donald Trump and former Vice President Joe Biden square off on Tuesday in their first election debate, five weeks ahead of polling day, against the backdrop of a New York Times’ investigation into the president’s taxes.
The prospect of further U.S. stimulus remains a key focus. House Speaker Nancy Pelosi on Sunday said another coronavirus stimulus plan is possible with House Democrats planning an aid package of about $2.4 trillion. However, this is more than Republicans have indicated they are prepared to accept and a deal is unlikely.
Meanwhile, the United States recorded 58,461 new cases of Covid-19 on Friday, the highest one-day increase since Aug. 7, while New York City posted its first 1,000-case day since June.
The economic data slate is largely empty Monday. The key release this week will be Friday’s official employment report, which will be the final U.S. jobs report before the presidential election.
In corporate news, aside from the M&A news, the saga surrounding TikTok continued as a U.S. judge late on Sunday temporarily blocked a Trump administration order that was set to ban the video-sharing app from download on app stores at Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL).
Oil prices weakened Monday, with the major oil benchmarks on course to end the month lower, as rising coronavirus cases threaten hopes of a recovery in demand across the world.
U.S. crude futures traded 0.3% higher at $40.36 a barrel, while the international benchmark Brent contract rose 0.1% to $42.45. Brent is on track for its first monthly loss in six while WTI is headed for its first monthly drop since April.
Elsewhere, gold futures fell 0.2% to $1,862.15/oz, while EUR/USD traded 0.3% higher at 1.1662.