"US stocks are set to open higher amid improved sentiment heading into the week largely stems from growing expectations that a narrow Senate deal could finally end the 40-day U.S. government shutdown. The prospect of a reopening is easing some of the uncertainty that has clouded the Fed's policy outlook and distorted the flow of economic data. The Senate advanced a measure to fund the government through January after eight Democrats joined Republicans in a 60-40 procedural vote."
"Broader equity sentiment improved alongside hopes for reopening, particularly as the wealth effect continues to sustain U.S. consumer spending. JPMorgan estimates that roughly 16 percent of consumer spending growth is now driven by stock market gains, especially among the top 20 percent of earners who hold nearly all equities. This has created a split economy in which affluent households maintain robust demand while Americans without stock exposure face their weakest sentiment levels in decades. With that, markets have become a primary engine for consumption, increasing the economy's sensitivity to volatility."
S&P 500 E-mini-Futures rose 0.75% and Nasdaq 100 E-mini-Futures gained more than 1.7%, representing a rebound after two weeks of weakness. Growing expectations of a narrow Senate deal to end the 40-day U.S. government shutdown eased uncertainty that had clouded the Federal Reserve outlook and distorted economic data. The Senate advanced funding through January on a 60-40 procedural vote after bipartisan agreement. The deal restores federal workers' jobs and guarantees back pay while offering limited concessions. Equity sentiment improved as the wealth effect supports consumer spending, but stretched valuations and uneven economic demand leave risks in place.
Read at London Business News | Londonlovesbusiness.com
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