U.S. Stocks May Add To Last Year's Strong Gains In Early Trading

Stocks appear poised to start the New Year on an upbeat note on Monday, adding to the strong gains posted during a turbulent 2020. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 122 points.

The markets may benefit from recent upward momentum, which has helped propel the major averages to new record highs due in part to the approval of a new fiscal stimulus bill.

The relief package passed by Congress and signed by President Donald Trump late last month should help prop up an economy that has already made big strides recovering from coronavirus-induced lockdowns.

Optimism about the impact of coronavirus vaccine rollouts may also help stocks extend the strong upward move seen over the course of last year.

Trading activity may be somewhat subdued, however, as some traders may be reluctant to make significant moves ahead of two key Senate runoffs in Georgia on Tuesday.

The outcome of the runoff elections will determine which party controls the Senate and could have a major impact on what President-elect Joe Biden is able to accomplish.

Traders may also look ahead to Friday's closely watched monthly jobs report, which is expected to show a continued slowdown in the pace of job growth in the month of December.

Shortly after the start of trading, Commerce Department is scheduled to release its report on construction spending in the month of November. Construction spending is expected to increase by 1.0 percent.

Stocks showed a lack of direction throughout much of the trading session on Thursday before moving to the upside going into the close. With the late-day advance, the Dow and the S&P 500 reached new record closing highs.

The major averages all closed in positive territory, although the Nasdaq posted a more modest gain, inching up 18.28 points or 0.1 percent to 12,888.28. The Dow advanced 196.92 points or 0.7 percent to 30,606.48 and the S&P 500 climbed 24.03 points or 0.6 percent to 3,756.07.

For the year, the Dow jumped by 7.3 percent and the S&P 500 surged up by 16.3 percent, while the tech-heavy Nasdaq skyrocketed 43.6 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although Japan's Nikkei 225 Index bucked the uptrend and slid by 0.7 percent. China's Shanghai Composite Index advanced by 0.9 percent, while South Korea's Kospi spiked by 2.5 percent.

The major European markets have also shown strong moves to the upside on the day. While the U.K.'s FTSE 100 Index has surged up by 2.7 percent, the French CAC 40 Index is up by 1.6 percent and the German DAX Index is up by 1.1 percent.

In commodities trading, crude oil futures are rising $0.30 to $48.82 a barrel after ticking up $0.12 to $48.52 a barrel last Thursday. Meanwhile, after inching up $1.70 to $1,895.10 an ounce in the previous session, gold futures are soaring $49.40 to $1,944.50 an ounce.

On the currency front, the U.S. dollar is trading at 102.97 yen versus the 103.20 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is trading at $1.2292 compared to last Thursday's $1.2215.

Market Analysis