Dow Futures Gain As Markets Await Q3 Earnings, Stimulus Clarity; Apple & Amazon Boost Nasdaq

Wall Street looks to extend its best week since August, but headline risks are replete with third quarter earnings, Amazon Prime Day, an Apple iPhone unveiling and September retail sales on the calendar.

The Monday Market Minute

  • Global stocks rally as China markets roar, investors extend stimulus bets heading into the U.S. earnings season.
  • Around 31 companies will report this week, including the country's biggest banks, with analysts expecting third quarter profits to fall 21% from last year.
  • Apple unveils is new line-up of 5G phones on Tuesday, the same day that Amazon will launch its annual 'Prime Day' shopping event.
  • President Trump renews call for stimulus deal, but confusion grips talks as both sides play politics 22 days ahead of the November elections.
  • Europe records 100,000 daily coronavirus cases, the highest tally since the pandemic began, in what is likely to be an omen for a second U.S. wave as domestic weather cools.
  • U.S. equity futures suggest a firmer open on Wall Street, following its best five-day stretch since August, ahead of big bank earnings and key consumer sentiment events in the week ahead.

U.S. equity futures edged higher Monday, while global stocks rallied and oil prices fell, as investors braced for a critical week ahead that could define the market's direction heading into the final months of the year.

With Wall Street still looking for clarity on stimulus heading into the teeth of the third quarter earnings season, as well as a series of events that will gauge the strength of the U.S. consumer, stocks are holding onto solid October gains, with the Dow Jones Industrial Average creeping into positive territory for the year on Friday.

However, Europe's recent coronavirus surge, which has lead to a record high 100,000 daily cases across the Continent Sunday, serves as a reminder that the U.S. economy is almost certain to face a similar 'second wave' as the domestic weather cools in the coming weeks.

Without stimulus from Washington -- which appears as deadlocked and confused this week as it was last -- and hundreds of thousands of job losses already in the pipeline, near-term growth prospects are fragile at best. 

Still, the market's immediate concern will be to navigate through the third quarter earnings season, which kicks-off Tuesday with earnings from Johnson & Johnson  (JNJ) - Get Johnson & Johnson (JNJ) Report, JPMorgan  (JPM) - Get JPMorgan Chase & Co. (JPM) Report and Citigroup  (C) - Get Citigroup Inc. Report.

In fact, some 31 companies will report this week in a season that is expected to show collective S&P 500 profits falling 21% from last year to a share-weighted total of $273.1 billion. 

Consumer strength will also be in focus this week, with Amazon's  (AMZN) - Get Amazon.com, Inc. Report 'Prime Day' shopping even slated to begin Tuesday, the same day as Apple's  (AAPL) - Get Apple Inc. (AAPL) Report 5G iPhone unveiling,  with a detailed look at September retail sales expected on Friday.

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The market's comfort with a projected win for Democratic candidate Joe Biden, as well as a potential 'Blue Wave' sweep of control in the House and the Senate, is also a likely driver in the coming weeks, with polls showing the former Vice President holding a commanding lead over incumbent Donald Trump.

Futures contracts tied to the Dow Jones Industrial Average suggest a 120 point opening bell gain, while those linked to the S&P 500, which has gained 3.4% so far this month, are priced for a 30 point advance. Nasdaq Composite futures are indicating a 235 point gain.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.12% higher at 93.167 while benchmark 10-year Treasury note yields were steady at 0.779% in European trading, although bond markets will remain closed on Monday for the Columbus Day holiday.

Global oil prices drifted lower, as well, with concerns over global demand pairing the re-start of operations in Norway and the U.S. Gulf coast, which is kicking back into full capacity following platform shutdowns triggered by Hurricane Delta. 

WTI contracts for November delivery, the new U.S. benchmark, traded 47 cents lower from their Friday close in New York and changing hands at $40.13 per barrel while Brent contracts for December, the global benchmark, were seen 44 cents lower at $43.41 per barrel.

Overnight in Asia, China stocks roared higher as investors returned from a week of nationalist celebrations and priced in the impact of targeted central bank support and a potential win for Joe Biden, which markets see as less antagonistic on trade with the worlds second largest economy.

A 3% gain for the Shanghai Composite helped lift the region-wide MSCI ex-Japan to a two-and-a-half year high while Japan's Nikkei 225 fell 0.26% on the session to 23,558.69 points.