European stocks are poised to open predominantly higher on Monday, entering a week shortened by the holiday season. The week is expected to be relatively quiet, given the upcoming Boxing Day and Christmas Day holidays. However, some fund managers might engage in year-end window-dressing to demonstrate strong performance to investors and shareholders.
U.S. stock futures are on the rise, bolstered by broadly positive Asian markets, following a favorable U.S. inflation report that has reignited investor optimism for potential policy easing by the Federal Reserve in 2025. Chicago Fed President Austan Goolsbee expressed to CNBC's Steve Liesman that the recent inflation data might indicate that the recent months of firmness were more of a slight bump rather than a shift in direction.
Sentiment received further support as the U.S. Senate narrowly approved a funding bill early Saturday, averting a government shutdown. In economic news, U.K. GDP data is expected to be released later today, with forecasts predicting a modest 0.1 percent growth for the third quarter, consistent with initial estimates, following a 0.5 percent increase in the second quarter.
The U.S. economic schedule is sparse this week, with key reports anticipated on durable goods orders and new home sales. Asian markets have experienced solid gains, driven by the Dow and S&P achieving their largest single-day percentage increases since November 6, thanks to encouraging inflation data.
There is also speculation about potential additional stimulus measures from China, which has helped investors overlook persistent concerns regarding possible U.S. tariffs in 2025 under the incoming Trump administration.
In commodity markets, gold remains stable near $2,620 per ounce in Asian trading, and the dollar index holds steady while oil prices have edged slightly upward after a weekly decline. U.S. stocks saw robust gains on Friday following the release of inflation figures that were softer than expected. Data indicated that PCE Inflation, the Fed's preferred gauge of consumer price inflation, increased by 0.1 percent month-on-month in November, below the anticipated 0.2 percent rise. The annual rate climbed to 2.4 percent from 2.3 percent in the previous month, still below the market's expected 2.5 percent. Core PCE decreased to 0.1 percent from 0.3 percent in October, with the annual rate remaining steady at 2.8 percent.
The Dow surged 1.2 percent, recovering from a slight gain the previous day and ending a ten-day losing streak. The Nasdaq Composite, weighted toward technology stocks, rose by 1 percent, and the S&P 500 increased by 1.1 percent. In contrast, European stocks concluded lower for a second consecutive day on Friday, amid political unease in Germany and France, fears of a U.S. government shutdown, and concerns over impending tariff threats from Trump. The pan-European STOXX 600 fell by 0.9 percent, with Germany's DAX declining 0.4 percent and both France's CAC 40 and the U.K.'s FTSE 100 slipping by around 0.3 percent.
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