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Market Snapshot: Stock futures lower, but Dow on track for best month since 1987

Market Snapshot

S&P Global to buy IHS Markit in $44 billion deal

Angela Weiss/Agence France-Presse/Getty Images

Stock-index futures pointed to a lower start Monday, but equities remain on track for a historic month as investors cheered progress toward vaccines while looking past a continued rise in COVID-19 cases.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average YM00 fell 151 points, or 0.5%, to 29,723.

  • S&P 500 futures ES00 were off 9.75 points, or 0.3%, at 3,626.75.

  • Nasdaq-100 futures NQ00 rose 16.25 points, or 0.1%, to 12,273.75.

Stocks are coming off a holiday-shortened week that saw new peaks for major benchmarks:

  • The Dow DJIA, which topped the 30,000 milestone for the first time ever on Tuesday, ended Friday at 29,910.37, for a weekly gain of 2.2%.

  • The S&P 500 SPX closed at a record 3,638.35 on Friday, for a 2. 3% weekly advance.

  • The Nasdaq Composite COMP also scored a record close Friday, finishing at 12,205.85, securing a weekly rise of 3%.

  • Through Friday, the Dow was up 12.5%, which would be its strongest monthly rise since January 1987, according to Dow Jones Market Data. The small-cap Russell 2000

    was up 20% month to date, which would mark its strongest monthly gain on record.

What’s driving the market?

Analysts said there was no obvious trigger for the weaker tone in stock-index futures on Monday.

A report by Reuters late Sunday that the Trump administration is set to add China’s largest chip maker, SMIC, and oil giant CNOOC to its export blacklist, got some blame for pressure.

“Equity investors remained optimistic about the prospect of a vaccine but the upside momentum has clearly slowed as sentiment has become skewed to the upside and traders will likely start to take their cues from the economic data this week as prospects of any additional fiscal stimulus are delayed until next year,” said Boris Schlossberg, managing director at BK Asset Management, in a note.

Read: Why the stock market’s COVID vaccine-inspired rally could soon face a big test

Meanwhile, equities have been boosted in November as three vaccine candidates saw high efficacy rates in late-stage trials, setting the stage for potential regulatory approval within weeks.

Moderna Inc.

on Monday released final data from its late-stage trial on Monday and said it would apply for emergency-use approval from the Food and Drug Administration. Moderna shares jumped 12% in premarket trade. Pfizer Inc.

and BioNTech SE

earlier this month filed for approval for their vaccine candidate.

A delayed but decisive outcome to the Nov. 3 presidential election, which saw Democrat Joe Biden defeat President Donald Trump, was also a source of relief for investors who had feared a muddled outcome that could contribute to political uncertainty. While Trump has continued to dispute the outcome, his efforts to overturn the result have met a series of defeats in the courts.

But market bears contend stocks may have pulled forward gains with the November rally, leaving equities vulnerable to weakness in the weeks ahead. The potential for a rise in COVID-19 infections to accelerate further in the wake of last week’s Thanksgiving Day holiday could also hang over the market, analysts said.

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See: The Fed and the promise of a vaccine aren’t enough to protect investors from a ‘reckoning,’ top economist warns

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, on Sunday said that the U.S. may see a “surge upon a surge” of the coronavirus in the weeks after Thanksgiving, and that he doesn’t expect current recommendations around social distancing to be relaxed before Christmas.

Investors will sift through a busy week of economic data, capped by the November jobs report on Friday. Monday sees the release of the Chicago-area purchasing managers index at 9:45 a.m. Eastern, while the October pending home sales index is due at 10 a.m. Eastern.

Which companies are in focus?
  • Deal news was also in focus, after information and analytics company IHS Markit Ltd. INFO said it had agreed to be acquired by rival S&P Global Inc. SPGI in an all-stock deal that values IHS at around $44 billion, including $4.8 billion in debt. IHS shares rose 4.8% in premarket trade, while S&P Global shares were off 2%.

  • Shares of electric car maker Tesla Inc.

    were up 1.5% premarket, after rising 19.6% in a four-day winning streak through Friday.

  • DoorDash Inc. disclosed Monday that it has set terms of its initial public offering, in which the app-based food-delivery platform is looking to raise up to $2.81 billion.

Which assets are on the move?

The 10-year Treasury note yield

was up 0.8 basis point to 0.850%.

December gold futures

were down 0.8% to $1,766.90 per ounce on Comex. Crude values were also falling, with futures for the U.S. benchmark contract

retreating 0.8% to $45.17 a barrel.

The greenback was marginally weaker. The ICE U.S. Dollar Index
a gauge of the dollar’s strength against its major rivals, fell 0.1%.

European stocks were trading flat, with the pan-European Stoxx Europe 600 index

and the U.K.’s FTSE 100

both virtually unchanged.

Japan’s benchmark Nikkei 225

 closed down 0.8%. Hong Kong’s Hang Seng

 dropped 0.5% while the Shanghai Composite

 lost 0.5%

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