By Barbara Kollmeyer, MarketWatch
Dollar surges, bond rout continues
Wall Street was set to resume its post-election rally on Monday, with stock futures indicating a new closing record for the Dow industrials, on continued hopes that the policies of President-elect Donald Trump will deliver strong economic growth.
Alongside rising stock futures, the dollar was surging across the board, while U.S. Treasury bonds came under renewed pressure.
Dow Jones Industrial Average futures jumped 113 points, or 0.6%, to 18,899, while S&P 500 futures climbed 10.40 points, or 0.5%, to 2,172. Nasdaq-100 futures rose 20.75 points, or 0.4%, to 4,768.75.
Last week (http://www.marketwatch.com/story/nasdaq-set-to-sell-off-again-as-tech-exodus-continues-2016-11-11), the Dow recorded its biggest weekly gain since 2011 and a record close of 18,847.66. Stock futures are indicating that the Dow could surpass that record on Monday, with a current level of 18,899.
Read:Trump rally to be followed by 11% stock-market tumble, forecasts Tom DeMark (http://www.marketwatch.com/story/in-wake-of-trump-rally-tom-demark-calls-for-11-stock-market-decline-2016-11-11)
The S&P 500 saw its biggest weekly gain since October 2014, while the Nasdaq Composite rose 3.8%, its biggest one-week jump since February.
"A Trump Presidency has suddenly gone from being the least desirable outcome, to say the least, for the markets to being responsible for the Dow soaring to record highs and bullish hysteria sweeping through the markets," wrote Craig Erlam, senior market analyst in a note to clients on Monday.
But he said investors need to wait and see how Trump will work with Congress and how much fiscal slack he has to fund his ambitious spending plans, Erlam added. "For now, it will be all about the transition and who is going to be given the key positions in his team, which we should find out more about in the days ahead," he said.
Read:Trump names RNC head Reince Priebus as chief of staff (http://www.marketwatch.com/story/reince-priebus-said-to-be-top-contender-for-trumps-chief-of-staff-2016-11-13)
(http://www.marketwatch.com/story/reince-priebus-said-to-be-top-contender-for-trumps-chief-of-staff-2016-11-13)And see:Donald Trump tells supporters to stop harassment (http://www.marketwatch.com/story/donald-trump-tells-supporters-to-stop-harassment-2016-11-13)
European stocks benefited from the optimism, with the Stoxx Europe 600 index up 1%, led by banks. Asian stocks saw a mixed day (http://www.marketwatch.com/story/nikkei-surges-leaving-other-asian-markets-in-the-dust-2016-11-13), with the Hong Kong Hang Seng Index dropping 1.4%, while the Nikkei 225 index rose 1.7% on a weak yen.
Gold and oil prices drifted lower.
Bond rout carries on, dollar soars
The yield on the U.S. 10-year Treasury bond surged to 2.23%, trading at the highest level since early January, noted Erlam. He added that noted the 30-year bond moved above 3% for the first time since January 6.
Bonds have been suffering on the view that while Trump's policies could be good for growth, they could also be inflationary, meaning the Federal Reserve may be forced to raise interest rates faster than markets expected. Mutual and exchange-traded funds benchmarked to the Bloomberg Barclays Aggregate U.S. Bond Index lost about $18 billion in value last week (http://www.marketwatch.com/story/bond-funds-lost-18-billion-in-value-during-this-weeks-trump-inspired-selloff-2016-11-11).
Investors will hear from Fed Chairwoman Janet Yellen this week (http://www.marketwatch.com/story/yellen-to-testify-next-week-on-economic-outlook-before-congress-2016-11-10) as she testifies before Congress about the economic outlook, roughly a month before a Fed meeting, which many believe could deliver a U.S. interest-rate hike.
Read:With Trump win comes expectations for interest rates to rise 'bigly' (http://www.marketwatch.com/story/with-trump-win-comes-expectations-for-rates-to-rise-bigly-2016-11-11)
The dollar (http://www.marketwatch.com/story/dollar-hits-multi-month-highs-versus-euro-yen-loonie-2016-11-14) was continuing last week's strong performance, hitting multimonth highs against the euro, yen and Canadian dollar on Monday. The ICE Dollar index , which measures the dollar's strength against six of its biggest rivals, rose to 99.845 from 99.055 late Friday, trading roughly at the highest level in a year, according to FactSet.
Economic docket: There is no major economic data on Monday's calendar, but there is a lineup of Fed speakers.
Dallas Fed President Rob Kaplan will be heard in a discussion at the Wichita Falls Chamber of Commerce at 1:20 p.m. Eastern Time. Later in the afternoon, Richmond Fed President Jeffrey Lacker will appear on a panel discussion on fiscal policy and debt in Chestertown, Md. at 5 p.m. Eastern. Then San Francisco Fed President John Williams will speak on growing China trade and investment in San Francisco at 6:30 p.m. Eastern.
Stocks to watch:Siemens AG(SIE.XE) said Monday it has agreed to buy U.S.-based Mentor Graphics Corp.(MENT) in a merger deal worth $4.5 billion (http://www.marketwatch.com/story/siemens-agrees-to-buy-us-based-mentor-in-45-billion-deal-2016-11-14). Shares of Mentor rose nearly 19% on thin volume.
Samsung Electronics Co.(005930.SE) said it would buy U.S. auto-parts supplier Harman International Industries Inc. (HAR) for $8 billion in an all-cash deal (http://www.marketwatch.com/story/samsung-to-buy-car-audio-maker-harman-for-8-bln-2016-11-14).
(END) Dow Jones Newswires
November 14, 2016 04:57 ET (09:57 GMT)
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