By Peter Nurse
Investing.com – U.S. stocks are seen opening higher Monday, rebounding after last week’s hefty losses on hopes that this week's comments from Federal Reserve speakers will show that last week's sell-off was overdone..
At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 220 points, or 0.7%, S&P 500 Futures traded 20 points, or 0.5%, higher, and Nasdaq 100 Futures dropped 65 points, or 0.5%.
The blue-chip Dow Jones Industrial Average dropped 3.5% last week, its worst week since late October, the broad-based S&P 500 fell 1.9%, its worst weekly performance since late February, while the tech-heavy Nasdaq Composite slipped 0.2%.
Investors are having to adjust their positions after a hawkish turn by the Federal Reserve, with the central bank’s policy makers, in the form of a dot plot, indicating the likelihood of interest rate rising in 2023, a year earlier than expected.
“With the Fed dots having done so much damage to positioning, the focus for the week ahead will be on a host of Fed speakers – and whether they're as hawkish as the dots suggest,” said analysts at ING, in a research note.
St. Louis Fed President James Bullard, who stated Friday that he saw higher interest rates as early as 2022, Dallas Fed President Robert Kaplan and New York Fed President John Williams (NYSE:WMB) are all expected to deliver remarks later Monday.
Most eyes, however, will be on Fed Chairman Jay Powell, who is due to testify Tuesday on the central bank’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis.
The economic data slate is largely empty Monday and there are no noteworthy earnings reports, but the retail sector is likely to be in focus as Amazon's (NASDAQ:AMZN) annual Prime Day starts.
The two-day sales event generated $10.4 billion in gross merchandise sales for the e-commerce giant last year, and has been brought forward from its traditional July date.
Also in the spotlight will be Raven (NASDAQ:RAVN) Industries, after the conglomerate accepted an offer from CNH Industrial (NYSE:CNHI) to the tune of $2.1 billion.
Crude oil prices pushed higher Monday, helped by a pause in Iranian nuclear talks, delaying the resumption of crude exports from the Persian Gulf country into the global market.
By 6:30 AM ET, U.S. crude was up 0.3% at $71.52 a barrel, while Brent was up 0.2% at $73.64.
Helping the tone Monday has been the adjournment of talks between Tehran and the western powers, and the U.S. in particular, over reviving the 2015 nuclear deal after the election of hardline judge Ebrahim Raisi as Iran’s new president.
Raisi is on the U.S. sanctions list for human rights abuses and Tehran insists penalties must be removed if the nuclear pact is to be revived, a move that the U.S. is likely to resist.
Elsewhere, gold futures rose 0.8% to $1,783/oz, while EUR/USD traded 0.3% higher at 1.1894.
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