Stock market poised to climb as oil rallies to fresh 2014 high above $70 – MarketWatch

This post was originally published on this site

U.S. stock futures moved higher on Monday, building on jobs report-inspired gains as a sharp climb for oil prices and the dollar were in focus and a trio of Federal Reserve speakers was upcoming.

Gains were supported by a couple of deals, including one driving up the price of Starbucks Corp.

How are the main benchmarks performing?

Dow Jones Industrial Average YMM8, +0.29%  futures rose 93 points, or 0.4%, to 24,300, while S&P 500 futures ESM8, +0.30%  rose 11.65 points, or 0.4%, to 2,674.25. Nasdaq-100 futures NQM8, +0.55%  gained 43 points, or 0.6%, to 6,817.75.

On Friday, the Dow Jones Industrial Average DJIA, +1.39% rose 332.36 points, or 1.4%, to end at 24,262.51, after an earlier drop of about 150 points. The blue-chip average logged its biggest daily climb since April 10, according to FactSet data. However, the average has struggled lately, falling in nine of the past 13 sessions.

The S&P 500 index SPX, +1.28% rose 33.69 points, or 1.3%, to finish at 2,663.42. The Nasdaq Composite Index COMP, +1.71% rose 121.47 points, or 1.7%. The Dow and S&P each slipped 0.2% last week, and the Nasdaq rose 1.3%.

What’s driving markets?

Investors may continue to push markets higher after Friday’s upbeat April jobs report. The only data of note for Monday is consumer credit for March, due at 3 p.m. Eastern Time, in a week that includes closely watched consumer prices.

Geopolitical topics will also be in focus. As oil prices climbed above $70 a barrel on Monday, investors were likely to keep a close eye on comments linked to the Iran nuclear deal. U.S. President Donald Trump must decide by next weekend, May 12, whether to abandon the deal. Such a move would trigger a reimposition of economic sanctions on Iran, hampering oil exports from the country and cutting global supply.

Global trade headlines will also be in focus for investors, after a team of U.S. negotiators appeared to garner no deal out of talks with counterparts in Beijing. China state media indicated that talks were positive, and more talks will be needed to avoid a trade war, the South China Morning Post reported.

Read: After earnings barrage and data, stock-market moves now hinge on global trade

A trio of Fed members are slated to speak on Monday, which could give further clues to the direction of interest rates. Richmond Federal President Tom Barkin is scheduled to speak at George Mason University in Fairfax, Va., at 2 p.m. Eastern Time.

Chicago Federal Reserve Bank President Charles Evans and Dallas Fed President Robert Kaplan will both speak at the 23rd Annual Financial Markets Conference in Amelia Island, Fla., at 3:30 p.m. Eastern.

What are strategists saying?

“It seems that the possible re-escalation of geopolitical risks between U.S. and Iran doesn’t affect market participants’ bias at this time. However, this notion will be put to the test as we draw closer to the deciding May 12 date when Trump has to recertify the JCPOA (Joint Comprehensive Plan of Action) deal so we believe that investors should keep their guard up for the rest of the week,” said Konstantinos Anthis, head of research at ADS Securities, in a note to clients.

Which stocks are in focus?

Tyson Foods Inc. TSN, +1.39% and Sempra Energy SRE, +0.35%  are among a handful of companies that will report earnings ahead of the open. After the close, Zillow Group Inc. ZG, +2.97%  and Hertz Global Holdings, Inc. HTZ, +4.35%  will report.

Starbucks Corp. SBUX, +2.76%  rose nearly 3% in thin premarket trading after Nestlé SA NSRGY, +0.33% NESN, +1.34%  said it has reached a deal to market the coffee chain’s consumer and food service products. Starbucks will receive a $7.15 billion upfront payment as part of the deal. Nestlé shares rose 0.8% in Zurich.

Gramercy Property Trust GPT, +0.42% surged 13.4% in premarket after the commercial real-estate asset management company said it would be acquired by Blackstone Group LP BX, +2.41%  in a cash deal valued at $7.6 billion.

Shares of International Flavors & Fragrances Inc. IFF, +1.48%  fell over 7% after announcing a $7.1 billion stock-and-cash deal to acquire Israel-based Frutarom Industries, Ltd. FRUT, +0.00%

Shares of Berkshire Hathaway Inc. BRK.A, +1.93% BRK.B, +2.10%  rose modestly after the multinational conglomerate said over the weekend it swung to a rare loss in the first quarter due to lower insurance premiums and an accounting rule change.

At the Berkshire shareholder meeting on Saturday, chairman Warren Buffett commented on a range of topics. He applauded Apple Inc.’s AAPL, +3.92%  share buybacks, defended a stake in Wells Fargo & Co. WFC, +1.69%  and explained why he doesn’t invest in Microsoft Corp. MSFT, +1.16%  shares. He said bonds are a ‘terrible investment’ near current yields and cryptocurrencies “will come to bad endings.”

Plus: Buffett on why Berkshire invests in gun stocks

And: Buffett says health partnership will have CEO in a ‘couple months’

What are other markets doing?

European stocks SXXP, +0.29% SXXP, +0.29% climbed, while Asian stocks finished mostly higher.

U.S. oil prices CLM8, +1.15%  rose 70 cents, or 1%, to $70.42 a barrel, while the ICE Dollar Index DXY, +0.40% climbed to a four-month high as oil prices surged. Gold prices GCM8, -0.25%  were modestly lower at $1,314 an ounce.