BLBG: S&P 500 Futures Jump After Stock Slump as FBI Absolves Clinton
Stocks are poised to end longest losing streak since 1980
Polls show Clinton with narrow lead before tomorrow’s vote
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U.S. stock-index futures signaled an end to a nine-day equity decline after the FBI reiterated that Hillary Clinton’s handling of e-mails wasn’t a crime, likely boosting her prospects in the presidential election.
December contracts on the S&P 500 Index surged 1.4 percent to 2,109.5 at 10:54 a.m. in London. The benchmark on Friday capped its longest losing streak since 1980, a slump that’s erased $725 billion in value from U.S. equities. Dow Jones Industrial Average futures jumped 242 points, also 1.4 percent, to 18,047 today.
Federal Bureau of Investigation Director James Comey said Sunday in a letter to Congress his agency maintained its July conclusion that it wouldn’t recommend criminal charges against Clinton. His announcement Oct. 28 that the FBI was examining new e-mails potentially related to its review of her use of a private server roiled the presidential race and spurred a selloff in equities.
“Markets are finally taking a bit of breather, with Clinton’s chances going higher,” said Christian Stocker, a strategist at UniCredit Bank AG in Munich, Germany. “This should last until Wednesday, when markets decide what the next direction is. There isn’t certainty she’ll win, but she is gaining some momentum and at least we got one worry out of the way.”
American stocks have shown themselves sensitive to Clinton’s presidential prospects, with futures rising in September during the first debate she was widely considered to have won. The S&P 500 tumbled about 20 points in the 40 minutes after Comey’s first letter was made public. While the race has been tightening before tomorrow’s vote, Clinton still maintains a narrow lead over Republican rival Donald Trump, according to an average of polls by RealClearPolitics. An FBI spokesman declined to elaborate Sunday on Comey’s letter.
Apprehension over the election’s outcome rose last week among investors still smarting from being caught wrong-footed after the U.K. voted to leave the European Union. The CBOE Volatility Index pushed its advance to 73 percent over nine days in the longest climb on record, while investors pulled the most money in three weeks from an ETF that tracks the S&P 500. The measure of market turbulence known as the VIX slid 14 percent today, the most in more than a month.
The S&P 500 Index has advanced in the five days before the vote in 20 of the past 22 cycles, according to data compiled by Bloomberg and Bespoke Investment Group LLC. While the gauge has climbed an average 1.9 percent in the run-up to elections going back to 1928, it’s down 1.9 percent in the past four sessions, with one market day left until polls open Nov. 8.
The earnings season is drawing to a close, with about 85 percent of S&P 500 companies having reported already. Of those, 55 percent beat sales expectations and 76 percent exceeded profit forecasts. Marriott International Inc. and News Corp. are among firms posting results today. Analysts forecast a profit increase of 2.5 percent for the benchmark’s members in the third quarter. If that holds, it will end the longest earnings recession since the financial crisis.
Among stocks moving on corporate news, Berkshire Hathaway Inc. rose 1.3 percent after third-quarter operating profit rose and cash piles soared to a record. NetSuite Inc. surged 20 percent after its shareholders endorsed Oracle Corp.’s bid for the software provider, clearing the path for the acquisition.
