Futures rise after Summers leaves Fed chair race
US markets are set to soar at the open after the former Treasury Secretary withdrew his name from consideration for the top job at the Federal Reserve.
President Barack Obama's top choice to replace current Federal Reserve Chairman Ben Bernanke has dropped out of the race. Lawrence Summers withdrew his candidacy from the race Sunday after weeks of criticism for being too close to Wall Street and for being abrasive.
The news put Fed Vice Chairman Janet Yellen at the top of the list. Yellen is expected to be more cautious about tapering the Fed's stimulus program. U.S. Treasuries jumped on the news, with the 10 year Treasury yield falling to 2.08%, the lowest it has been since September 3.
In other news around the markets:
Just one week before the German national elections, Chancellor Angela Merkel and her coalition government suffered a setback. Early results of Bavarian state elections showed that Merkel's Christian Social Union party won 49% of the vote, but her junior coalition partner, the Free Democratic Party, is only expected to have garnered 3% of the votes.
The U.S. and Russia have agreed on a nine-month UN program to destroy the Syrian government's chemical weapons. Obama, who has been under fire about the decision, has defended the agreement, saying a diplomatic solution will have more of a lasting impact, but stressed that military force could still be necessary.
Germany has been working together with EU officials to move plans for a eurozone banking union forward. After insisting that the banking union's creation would require changing the eurozone's treaty, German officials are finding a way to shift the power to fix struggling banks from the national level and make it a responsibility of the region as a whole.
With the Federal Reserve meeting on the horizon, markets are bracing for the possibility the bank will cut back on its asset buying stimulus program. Although most are expecting the bank to taper $10 billion to $15 billion, the months of anticipation and guidance from the bank mean the impact on markets could be tame, without much volatility -- provided there are no surprises.
Asian markets were mostly higher on Monday. The South Korean KOSPI was up 0.96%, the Hang Seng index was up 1.47% and New Zealand's NZ50 was up 0.92%. The NIKKEI was up 0.12%, and the Shanghai composite lost 0.22%.
European markets were up across the board on Monday. The UK's FTSE was up 0.90%, and the STOXX 600 was up 0.81%. The German DAX gained 1.21%, and the Spanish IBEX was up 1.06%.
With easing tension in Syria, crude futures fell on Monday. Brent futures for November delivery were down 0.33%, and WTI futures for October delivery were down 0.28%. Gold and silver were up 0.83% and 0.81% respectively, and copper was up 0.58%.
The dollar lost 0.43% against the pound and the euro after reports that Lawrence Summers withdrew from the race to lead the Fed. The yen gained 0.53% against the dollar, and the rupee was up 1.24% against the greenback.
Stocks moving in the premarket included:
Stratasys (SSYS) was down 4.80% in premarket trade after announcing that it has priced its public offering of 4,500,000 ordinary shares at $93.00 per share.
NXP Semiconductors (NXPI) was down 2.08% after announcing that certain principal stockholders have begun an offering of 25 million shares.
Zynga (ZNGA) gained 0.66% in premarket trade after announcing that it had settled a law suit over alleged theft of game secrets.
Sirius XM Radio (SIRI) gained 0.40% in premarket trade after announcing that the Wharton School of Business would be featured on a new business talk channel.
Avid Technology (AVID) is expected to report a loss of $0.01 per share, compared to last year's loss of $0.17 per share.
Farmer Brothers (FARM) is expected to report earnings per share of $0.18, compared to last year's loss of $0.06 per share.
Economic releases expected on Monday include U.S. industrial production, eurozone CPI, Italian and Norwegian trade balances. Also notable will be a speech by European Central Bank President Mario Draghi.
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Fed keeps important 'considerable time' language in reference to short-term interest rates, but dissents and dots leave doubts.
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