Dow Futures Open Slightly Higher After Best Month Since 1987

Stock futures started the overnight session slightly higher Monday night, reversing some of the declines in the regular session.

Stocks are expected to kick off in the final month of 2020 on the heels of a record month, in which each of the three major indices hit new records, and the Dow Jones recorded its biggest monthly gain since January 1987 with a lead of nearly 11.9%. In the S&P 500, the Energy, Financials and Industrials sectors led the index’s 10.8% rise, as traders reverted to the rotation of many names that had been the top names. hardest hit during the pandemic.

Many analysts believe stocks will continue to ride the wave of vaccine optimism from November to December, after Pfizer (PFE), Moderna (MRNA) and AstraZeneca (AZN) reported promising efficacy data for their products. Respective COVID-19 vaccine candidates. Developments in the race to create an inoculation against the coronavirus have helped stocks shed the volatility at the start of the month.

“In early November, when we saw the VIX (^ VIX) jump to 40, it was because of COVID. It was because of the surge in cases, not just here in the States, but really across the world, ”Alfred Eskandar, president of Salt Financial, Yahoo Finance told Yahoo on Monday. “And conversely, you see the VIX going down to where it is today, by almost half, also because of the positive news about the vaccine. So the market is very, very sensitive to what’s going on with COVID. “

“There are certainly many reasons to be exposed to equities now and in the near future,” he added. “The optimistic point of view is certainly alive and well.”

Other analysts have echoed this optimism. Tom Lee, managing partner of Fundstrat, said in a note Monday that he believed the S&P 500 would end 2020 at 3,800, which implies another rise of around 5% for the index.

“We don’t see how stocks suddenly weaken over the past month,” Lee said. “Certainly the risk is that this is a consensus opinion, but we are in a strong seasonal period for equities.”

The story continues

But as stocks melted higher in November, risks to the US economy remain, at least in the near term. In an address prepared Monday for an appearance before Congress on Tuesday, Federal Reserve Chairman Jerome Powell reiterated that economic growth will likely continue to be capped “until people are convinced that it is safe to re-engage in a wide range of activities. “

“Recent news on the vaccine front is very positive in the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficiency in different groups, ”he said. “It remains difficult to assess the timing and extent of the economic implications of these developments with any degree of confidence.”

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6:03 p.m. ET Monday: Stock futures open slightly higher

Here are the main moves in the markets at 6:03 p.m. ET Monday night:

• S&P 500 Futures (ES = F): 3,628.75, up 5.5 points or 0.15%

• Dow Futures (YM = F): 29,641.00, up 12 points or 0.04%

• Future Nasdaq (NQ = F): 12,328.00, up 51 points or 0.42%

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