Stock futures traded higher Tuesday morning, with investors hoping that lawmakers might succeed in coming to an agreement for more stimulus ahead of the November election.
Contracts on the Dow gained 200 points, or 0.7%, shortly before 7:30 a.m. in New York. The index had shed more than 400 points, or 1.4%, a day earlier, for its worst session in nearly one month. Component Procter & Gamble (PG) led the advance Tuesday morning after the company delivered better than expected quarterly sales results and raised its full-year guidance. IBM (IBM), on the other hand, fell during early trading after the company reported a slowdown in cloud revenue growth ahead of a planned spinoff of its legacy infrastructure management business.
In Washington, House Speaker Nancy Pelosi over the weekend offered a Tuesday deadline to reach a deal with the Trump administration for a pre-election virus-relief package. She and Treasury Secretary Steven Mnuchin spoke over the phone for nearly an hour Monday afternoon and “continued to narrow their differences” between their proposals, Pelosi’s spokesperson Drew Hammill said in a Twitter post Monday.
“The Speaker has tasked committee chairs to reconcile differences with their GOP counterparts on key areas,” he said, adding that Pelosi “continues to hope that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election.”
Stocks sold off on Monday on signs that the negotiators had still failed to make marked progress in hammering out terms of a stimulus bill, extending a stretch of volatility as traders closely eyed the development of talks between lawmakers.
“What we have here is a failure to communicate. And it’s one of these classic things where we can’t get along, it’s politically motivated, we just can’t come out and say it. And unfortunately, the market is in dire need of confidence,” Brian Belski, chief investment strategist for BMO Capital Markets, told Yahoo Finance’s The Final Round on Monday.
“I would say this, if you went back 10 year ago, or even as recently as 2009 and 2014, we were having the same types of conversations when it came around two words: quantitative easing,” he added, referring to discussions around the Federal Reserve’s monetary policy program. “And now it’s all about [fiscal] stimulus. And on a daily basis, the short-term traders from the momentum side of things, meaning the hedge funds, are really whipping these things around. We need to have a little more clarity with respect to where this confidence is going to come from. And right now that confidence … has transitioned from wanting the QE to now wanting the stimulus, unfortunately.”
8:32 a.m. ET: Housing starts rebound in September, driven by single-family units
Housing starts rebounded in September from August as the pandemic drove buyers toward single-family housing units early in the fall.
Starts were up 1.9% in September month over month to an annualized rate of 1.42 million, recovering after a near 7% drop in starts during August. Starts for single-family units alone rose 8.5% in September, and accounted for nearly 80% of all housing starts.
Building permits, which indicate future home-building, rose by a greater than expected margin. Building applications climbed 4.2% to an annualized rate of 1.55 million, whereas a gain of just 3% had been expected.
7:12 a.m. ET: Procter & Gamble posts 1Q sales that top estimates, raises guidance
Consumer giant Procter & Gamble (PG) reported better than expected first-quarter sales growth, as Americans continued to shop for staples amid the ongoing coronavirus pandemic.
Organic revenue grew 9% during the three months to the end of September, handily topping estimates for a 4.7% increase, according to Bloomberg data. Net sales of $19.3 billion were well above the $18.4 billion anticipated. Every major product category grew organic sales more than expected in the third quarter, led by fabric and home care products with a 14% increase in organic sales, and health care products like toothpastes with a 12% increase.
Procter & Gamble also raised its full-year guidance to see revenue up 4-5%, from its previous range of 2-4%.
7:10 a.m. ET Tuesday: Stock futures rise as traders hope final stimulus effort yields a deal
Here were the main moves in markets, as of 7:10 a.m. ET on Tuesday:
S&P 500 futures (ES=F): 3,448.50, up 25.75 points or 0.75%
Dow futures (YM=F): 28,289.00, up 189 points or 0.67%
Nasdaq futures (NQ=F): 11,742.75, up 92.5 points or 0.79%
Crude (CL=F): +$0.13 (+0.32%) to $40.96 a barrel
Gold (GC=F): -$2.60 (-0.14%) to $1,909.10 per ounce
10-year Treasury (^TNX): +2.4 bps to yield 0.786%
6:01 p.m. ET Monday: Stock futures open higher after selloff
Here were the main moves in markets, as of 6:01 p.m. ET:
S&P 500 futures (ES=F): 3,437.5, up 14.75 points or 0.43%
Dow futures (YM=F): 28,200.00, up 100 points or 0.36%
Nasdaq futures (NQ=F): 11,709.00, up 58.75 points or 0.5%