Dow Futures Gain, Dollar Retreats As Markets Track On-Again, Off-Again Stimulus Talks

Wall Street is looking to cap its best five-day stretch since August as investors brace for a game-changing week ahead that includes bank earnings, an Apple iPhone event, Amazon Prime Day and a possible Presidential Debate.

The Friday Market Minute

  • Global stocks press forward on U.S. stimulus hopes, with gains in Europe capped by a worrying surge in coronavirus infection rates.
  • House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin will resume talks Friday, with President Trump pressing for stand-alone agreements versus the Democrats preference for a comprehensive relief bill.
  • European coronavirus infections are rising at record levels in many major economies as the autumn weather turns, but leaders are hoping to avoid sweeping lockdowns in the weeks ahead.
  • Oil prices on pace for a 10% week gain on supply outages and improving demand, while the dollar tumbles to a three-week low against a basket of its global peers.
  • U.S. equity futures suggest a firmer open on Wall Street, which is looking at its best five-day stretch since August, heading into the teeth of the third quarter earnings seasons next week.

U.S. equity futures edged higher Friday, while the dollar retreated to a three-week low and oil prices slipped, as investors consolidated gains from the best week on Wall Street since mid-summer and braced for what could be a game-changing series of events in the coming days.

With markets still clinging to hopes that House Democrats and their Republican rivals in the Senate can reach an agreement on a coronavirus relief bill in the final three weeks before the November Presidential elections, the S&P 500 has gained around 2.9% so far this week, building its advance around solid corporate sales updates, progress in coronavirus vaccine development and modestly improving jobs numbers.

House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin will continue their weeks-long negotiations Friday, with President Donald Trump pressing for a series of 'stand alone' stimulus deals instead of the comprehensive $2.2 trillion package preferred by Democrats.

The third quarter earnings season will unofficially kick-off next week with profit updates from Wall Street's biggest banks, with Amazon  (AMZN) - Get Amazon.com, Inc. Report Prime Day, Apple's  (AAPL) - Get Apple Inc. (AAPL) Report iPhone unveiling and an on-again, off-again Presidential debate set to dominate the calendar in what could be a game-changing week for both the candidates and the broader U.S. market.

Friday's session, however, looks positive, with futures contracts tied to the Dow Jones Industrial Average indicating a 160 point opening bell gain and those linked to the S&P 500, which is up 6.7% for the year, pricing in a 21 point advance. 

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European stocks were on the march, as well, and looking at back-to-back weekly gains even as coronavirus infection rates in some of the region's biggest economies -- including France, Germany, Spain and the United Kingdom -- are spiking at record rates amid the cooler autumn weather. 

The Stoxx 600 was marked 0.45% higher in Frankfurt, held down in part by a firmer euro, while Britain's FTSE 100 bumped 0.9% to the upside thanks in part to solid gains in commodity-linked stocks.

The U.S. dollar index fell 0.53% to a three-week low of 93.281 against a basket of six global currencies in overnight trading, a move that could help boost near-term gains for stocks, while benchmark 10-year Treasury note yields continue to trade in a new-found range of 0.777% following a week of successful auctions that included $110 billion on new supply for the market. 

Oil prices also slipped lower in the early Friday session as traders booked profits from a week-long rally that lifted crude prices more than 10% and took WTI past the $40 per barrel mark.

Gulf of Mexico outages from Hurricane Delta, an ongoing oil workers' strike in Norway and improving demand dynamics in the U.S. have all added to gains this week, and several analysts are pointing to a fourth-quarter crude rally that could take prices closer to $50 by the end of the year.

WTI contracts for November delivery, the new U.S. benchmark, traded 14 cents lower from their Thursday close in New York and changed hands at $41.05 per barrel while Brent contracts for December, the global benchmark, were seen 11 cents lower at $43.23 per barrel.

With China markets quiet during the country's week-long nationalist celebrations, Asia stocks have been mostly muted in terms of headlines this week, but the MCSI ex-Japan benchmark has still managed to rise 2.9% , while Japan's Nikkei 225 ended the week 1.6% to the good following a Friday session dip of 0.12% that left the index at 23,616.69 points.