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Dec 5, 2016

U.S. Stock Market Future Indications by Marketwatch on December 5, 2016: Dow Poised to Open at All-Time High as Investors Shake Off Italy's Referendum

Barbara Kollmeyer
U.S. stock futures indicated the Dow industrials were ready to open at a fresh all-time high on Monday, with momentum driven as equity investors shook off the defeat of Italy’s constitution-reform referendum and amid signs of steady U.S. economic growth.

Futures for the Dow Jones Industrial Average YMZ6, +0.46%  rose 73 points, or 0.4%, to 19,230, while those for the S&P 500 ESZ6, +0.44%  gained 7.4 points, or 0.3%, to 2,199.25. Nasdaq-100 futures ESZ6, +0.44%  jumped 19.75 points, or 0.4%, to 4,758.25.
The Dow industrials closed at a record high last Thursday of 19,191.93, and touched an intraday high of 19,214.30. Futures offer a gauge of where the index could open, and Monday’s move indicate a new high is in store for investors.
“The combination of steady U.S .economic growth, which won’t need too hawkish a stance from the FOMC to manage, along with the prospect of further QE from the ECB seems to be generating perfect conditions to extend the bull market rally,” said Jamieson Blake, retail sales manager at ADS Securities London, in a note to clients.
On Thursday, the European Central Bank will hold its regular monetary policy meeting to decide on the scope of its quantitative easing and other measures.
Recovering from weak premarket action, the Stoxx Europe 600 SXXP, +0.84%  rose 1%, fighting losses after Italian voters rejected constitutional changes backed by their government. The broader Italian stock market I945, -0.71%  searched for firm direction but Italian bank shares IT8300, -3.09%  struggled.
The government had argued the changes would have made it easier to pass laws, notably those aimed at helping its embattled bank sector. Prime Minister Matteo Renzi announced he would resign on the heels of the result.
The move creates some uncertainty for Europe’s fourth-largest economy, and was viewed as a win for Italian euroskeptics, specifically the 5 Star Movement, which has campaigned for the country to leave the euro.
Read: What to know now that Italy has voted ‘no,’ with Renzi set to step down
Shaking it off: But U.S. investors appeared ready to take the news in stride.
“Perhaps the backing of the central bank to contain any negative fallout is helping to keep investor spirits up, even though the result itself may have just presented an opportunity to another antiestablishment movement that favors a referendum on eurozone membership,” said Craig Erlam, senior market analyst at Oanda, in emailed comments.
The bulk of the reaction fell on the euro EURUSD, +0.3562%  , which hit a 21-month low against the dollar before paring the decline.
U.S. stocks ended last week largely lower, with weaker-than-expected payrolls data weighing on equities Friday. The S&P 500 index SPX, +0.04%  fell 1% for the week, while the Nasdaq Composite Index COMP, +0.09%  dropped 2.7%, its worst weekly loss since before the Nov. 8 presidential election.
Some worry that Wall Street is due for a breather after a run-up in stocks since the surprise election win for Donald Trump, though Monday’s action indicated that may not happen right away.
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Data on deck: Economic reports for Monday include the Markit services purchasing managers index for November at 9:45 a.m. Eastern Time, and the Institute for Supply Management’s nonmanufacturing index for the same month, due at 10 a.m. Eastern.
On the Federal Reserve front, New York Fed president William Dudley speech is due to speak at 8:30 a.m. Eastern in the Big Apple, addressing the economic outlook and monetary policy.
Chicago Fed President Charles Evans is slated to talk on the same topic in the Windy City at 9:25 a.m. Eastern, and St. Louis Fed President James Bullard is on tap to deliver a speech in Phoenix at 2:05 p.m.
Stocks to watch: Manufacturer Rexnord Corp.‘s stock RXN, -3.43%  could be in focus after President-elect Trump criticized the company’s plans to relocate an Indianapolis-based factory to Mexico, and took to Twitter to emphasize his disapproval of such actions.
Apple Inc. AAPL, +0.37%  has written a letter to U.S. regulators offering feedback on proposed guidelines for self-driving cars and other machine-learning technology. It’s the biggest hint thus far that the tech giant is working on autonomous vehicles.
Rex Tillerson, chairman and chief executive officer of Exxon Mobil Corp. XOM, -0.23%  , meanwhile, has emerged as a contender to become Secretary of State, a Trump transition adviser has said, confirming earlier reports.
Other markets: Asian stocks were unable to shake off losses, with banks leading the way south on fears the Italy “no” vote could hurt the country’s banking system and spread globally. The Nikkei 225 index NIK, -0.82%  dropped 0.8% and the Shanghai Composite Index SHCOMP, -1.21%  fell 1.2%.
Gold GCG7, -0.81%  and silver SIH7, -0.87% prices were off around 1% each.
WTI crude prices CLF7, +0.74%  reversed earlier losses to push above $52 a barrel, while Brent LCOG7, +0.88%   was higher, trading around $55 a barrel.