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Wall Street will attempt to halt four consecutive weeks of losses heading into the end of the month amid a busy calendar of political and economic headline risks capped by Friday’s September employment report.

The Monday Market Minute

  • Global stocks rebound from September losses heading into a busy week for political headline risk and a key reading for the U.S. job market.
  • President Donald Trump and former Vice President Joe Biden meet for their first of two debates this week, while lawmakers in Washington debate ways to avoid a government shutdown and add more stimulus to the sputtering economy.
  • China industrial profits continued to surge in August, helping boost stocks in Europe and Asia and providing an early market lift for Wall Street. 
  • U.S. equity futures suggest a firmer open for U.S. stocks ahead of a week of big data readings, including second quarter GDP on Wednesday and September payrolls on Friday.

U.S. equity futures powered higher Monday, while the dollar retreated from a two-month high and oil prices slipped, as markets look to reverse a full month of losses ahead of a busy week of political headline risk and still-escalating coronavirus infections in major economies around the world.

A stronger-than-expected reading from a key China economic metric — industrial profits earned at state-owned companies over the month of August — provided an early boost to European markets, as did a mini-rebound in bank stocks following a weekend move by China’s Ping An insurance group to increase its stake in HSBC Plc.

U.S. stocks look set to run with those gains Monday, albeit in what is likely to be a more muted session owing to Yom Kippur observances and what could be a crucial week in U.S. politics that may frame the November Presidential election race.

President Donald Trump and his Democratic rival, former Vice President Joe Biden, will meet in the first of their two debates Tuesday, just 48 hours after a report from the New York Times alleged that Trump has paid only minimal taxes between 2016 and 2017 and faces hundreds of millions in personally-guaranteed loans that come due in the next few years.

Lawmakers in Washington will also vote on measures to avoid a government shutdown later this week, as well as a stimulus plan crafted by House Democrats that would pump some $2.2 trillion into the suddenly-sputtering domestic economy. 

The Trump administration’s efforts to place Justice Amy Coney Barrett on the Supreme Court will also being in earnest this week, with hearings expected in early October. 

Still, U.S. stocks look ready for a solid open on Monday, with futures contracts tied to the Dow Jones Industrial Average suggesting a 320 point opening bell gain, amid a month-to-date decline of 4.4%, while those linked to the S&P 500 indicate a 38 point advance that would eat into the 5.77% September decline for the broader benchmark.

Nasdaq Composite futures, meanwhile, are priced for a 135 point gain thanks in part to solid pre-market moves for Tesla, Apple and Uber, which won a long-running battle with authorities in London to keep its operating license in Europe’s largest city.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, fell 0.3% from a two-month high to trade at 94.362 in early European dealing following data from the CFTC on Friday that indicated net short positions of nearly $34 billion, the highest in almost 10 years.

European stocks were firmly in the green, as well, with the Stoxx 600 benchmark rising 1.66% in early Frankfurt trading, paced by a 2.6% gain for the trade-focused DAX performance index following the China industrial profits data while Britain’s FTSE 100 rose 1.3% thanks in part to a 9% surge for HSBC following last week’s slump.

Global oil prices at first failed to take advantage of the weaker U.S. dollar as investors continue to fret over the impact on world demand of rising coronavirus infections, which are triggering new lockdown orders in the UK and Europe and are trending higher in the United States and South America.

However, prices began to rise later in the European session, with WTI contracts for October delivery, the U.S. benchmark, up 26 cents from their Friday close in New York at $40.51 per barrel  while Brent contracts for November, the global benchmark, were seen 22 cents higher at $42.20 per barrel.

Overnight in Asia, Japan’s Nikkei 225 jumped 1.32% higher to close at 23,511.62 points as the yen eased to 105.34 against the greenback, while the region-wide MSCI ex-Japan benchmark rose 0.72% following the stronger-than-expected China industrial profits data.