Monday April 30th

30-04-2018

Dow set to rise more than 100 points as earnings, dealmaking boost sentiment

U.S. stock index futures posted solid gains ahead of Monday's open, boosted by strong earnings and a slew of corporate dealmaking. Around 8:35 a.m. ET, Dow Jones industrial average futures rose 125 points, indicating a higher open of 140.81 points. Nasdaq 100 and the S&P 500 futures also indicated an upbeat start to the session for their respective markets. Dow component McDonald's rose 3.9 percent after reporting better-than-expected earnings and revenue. Botox-maker Allergan also posted a better-than-expected profit for the previous quarter. Stocks also got a boost from several deals being announced. T-Mobile said Sunday it was buying Sprint for $26 billion. Meanwhile, Marathon Petroleum is buying oil refiner Andeavor for $23 billion. Elsewhere, logistics company Prologis is acquiring DCT Industrial Trust for $8.4 billion in an all-stock deal. Marriott Vacations, the hotel chain's timeshare business, is also buying rival ILG for $4.7 billion. The moves in premarket trade came as markets overseas ticked higher. In Asia, stocks finished trade positively as investors watched for political news coming out of the Koreas. In Europe, equities attempted to post gains as merger news and earnings kept market participants busy. In data, the personal consumption expenditures (PCE) price index posted last month its biggest year-over-year gain since February 2017. The so-called core PCE — which strips out food and energy — jumped 1.9 percent through March. The core PCE is the Federal Reserve's preferred measure of inflation. Pending home sales for March are due at 10 a.m. ET. In politics, investors will be watching North Korea, after the nation's leader met with the leader of South Korea on Friday. The pair pledged to abolish the risk of war and to collaborate on the total denuclearization of the Korean peninsula. The North's state media announced Monday that the North would shift its time zone this week, in order to align with the South's time zone. Later this week, a government diplomat from China will travel to North Korea, Reuters reported. Asian stocks closed higher on the last trading day of the month, as investors focused on a mix of ebbing geopolitical tensions, robust earnings and economic data. South Korea's benchmark Kospi index gained 0.92 percent to close at 2,515.38. Hong Kong's Hang Seng Index recorded more convincing gains, with the benchmark advancing 1.71 percent by 3:05 p.m. Oil prices fell on Monday after a rising rig count in the United States suggested the boom in shale output is showing no signs of slowing. However, prices held near their highest in over three years and were set for a second straight month of gains. The prospect of the United States reimposing sanctions on Iran and OPEC's continued discipline in withholding output have kept the market well above $70 a barrel for most of this month. Brent crude futures were down 64 cents on the day at $74 a barrel by 8:26 a.m. ET (1226 GMT). The price climbed to $75.47 last week, the highest since November 2014. U.S. West Texas Intermediate (WTI) crude futures were down 66 cents, or 1 percent, at $67.44 a barrel. Gold fell to its lowest in nearly six weeks on Monday as easing tensions on the Korean peninsula helped boost appetite for assets seen as higher risk, such as stocks, and lifted the dollar. The metal slid 1 percent last week on the back of a stronger dollar and a rise in Treasury yields to above 3 percent, which weighed on interest in non-interest bearing assets. Its retreat has left it on track to end April down 0.5 percent, erasing all the previous month's gains. Spot gold was down 0.63 percent at $1,313.60 an ounce at 8:30 a.m. ET. U.S. gold futures for June delivery fell 0.70 percent at $1,314.30.