By Barbara Kollmeyer, MarketWatch
Dollar surges, bond rout continues
Wall Street was set for a battle to resume its post-election rally on Monday, with stock futures pulling back from gains fueled by hopes the policies of President-elect Donald Trump will deliver strong economic benefits.
The dollar was surging across the board, while U.S. Treasury bonds came under renewed pressure.
Stock futures pared or reversed advances seen in Asia and early Europe trading hours. Dow Jones Industrial Average futures rose 36 points, or 0.2%, to 18,821, pulling back from gains of more than 100 points earlier. S&P 500 futures fell 2.1 points to 2,159.75, while Nasdaq-100 futures slipped 10.75 points, or 0.2%, to 4,737.50.
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)
On Friday (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. Futures pointed to the index losing its grip on a chance to mark a new closing high as U.S. traders began to stir Monday. At the end of the week, 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.
While a "Trump Presidency" has sent the Dow to record highs, 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, Craig Erlam, senior market analyst at Oanda, said in a note Monday.
"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," Erlam 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 was also paring earlier gains, with the Stoxx Europe 600 index up just 0.3%, after opening up 0.8%. 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 was trading marginally higher, while oil prices fell.
Bond rout carries on, dollar soars
The yield on the U.S. 10-year Treasury bond tapped as high as 2.29%, trading at the highest level since early January. The 30-year bond yield moved above 3%, also the highest since January. The yield on the two-year Treasury note moved above 1% for the first time in about a year.
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 99.805 from 99.055 late Friday, trading roughly at thehighest level in about 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% in premarket.
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). (http://www.marketwatch.com/story/samsung-to-buy-car-audio-maker-harman-for-8-bln-2016-11-14) Harman shares were not yet active in premarket trading.
(END) Dow Jones Newswires
November 14, 2016 06:50 ET (11:50 GMT)
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