REUTERS - U.S. stocks looked set to open higher on Monday as the so-called “Trump trade”, which sent Wall Street to record highs last week, looked set to pick up speed after a brief lull.
The three main U.S. stock indexes closed at record highs on Thursday and Friday as optimism about the economy rose after President Donald Trump vowed to make a major tax announcement in the next few weeks.
The S&P 500 has surged 8.3 percent since Trump’s Nov. 8 election, fueled by expectations he will lower corporate taxes, reduce regulations and increase infrastructure spending.
The rally had stalled amid concerns over Trump’s protectionist stance and lack of clarity on policy reforms.
Investors are now closely watching as the businessman-turned-politician lays out the finer details of his agenda to boost economic growth.
Investors were also comforted by the two-day U.S.-Japan summit held over the weekend apparently having ended smoothly without Trump talking tough on trade, currency and security issues.
The Japanese yen, the demand for which rises when risk appetite falls, was the biggest underperformer among major currencies. World stocks rose, with Asian shares rallying to a 1-1/2-year high.
Global markets are following the leader (U.S. stocks) after the resurgence of the “Trump trade”, Peter Cardillo, chief market economist at First Standard Financial wrote in a note.
Cardillo said he expects a “mixed to steady positive session” as investors brace for Federal Reserve Chair Janet Yellen’s monetary testimony on Tuesday.
The three futures indexes hit record highs. Dow e-minis were up 59 points, or 0.29 percent, with 23,248 contracts changing hands.
S&P 500 e-minis were up 5.5 points, or 0.24 percent, with 108,718 contracts traded. Nasdaq 100 e-minis were up 9.5 points, or 0.18 percent, on volume of 19,334 contracts.
Oil prices, which helped the markets break records last week, were down about 0.7 percent. [O/R]
Macy’s rose 2.2 percent after Barron’s said on Sunday that the department store chain operator could see its shares rise by 50 percent in a potential sale.
Dow component Verizon slipped 1.5 percent after the network carrier said it would reintroduce its unlimited data plan.
AT&T was down 0.97 percent, T-Mobile dropped 1.6 percent and Sprint fell 2.6 percent.
Hain Celestial dropped 11 percent after the packaged foods maker disclosed on Friday that the SEC issued a subpoena seeking certain documents.
Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza