Stocks look to snap 5-day losing streak

Market expert: Be ‘defensive’ ahead of potential correction

Phil Orlando, Federated Hermes chief equity market strategist, discusses futures going into the week and provides analysis of Democrats’ proposed corporate tax rate. 

U.S. stock futures rallied Monday morning, putting the Dow Jones Industrial Average and the S&P 500 on track to snap their five-day losing streaks. 

Dow Jones Industrial Average futures climbed 209 points, or 0.61%, while S&P 500 futures and Nasdaq 100 futures gained 0.58% and 0.52%, respectively. 

The early gains come as House Democrats are working on a draft proposal that would raise taxes on the wealthy and corporations to pay for their $3.5 trillion budget package. 

Details of the proposal could still change, but it is said to include raising taxes on individuals making over $400,000 annually and married couples filing jointly earnings of $450,000 per year. It also includes raising the top corporate tax rate to 26.5% from 21% and increasing the top capital gains rate to 25% from 20%. 

In stocks, Apple Inc. shares recouped a portion of Friday’s losses that came after a federal judge issued a permanent injunction that would allow players to avoid the 30% Apple Store fees.

Virgin Galactic Holdings Inc. said it was postponing its joint space mission with the Italian Air Force until mid-October due to concern over a potential manufacturing defect in a component of the flight control system. 

In deals, TransUnion agreed to buy Neustar, a real-time information and analytics company, from a private investment group for $3.1 billion. 

Elsewhere, Kansas City Southern plans to accept a $27.2 billion cash and stock offer to sell itself to Canadian Pacific Railway Ltd. unless rival Canadian National Railway Ltd. is able to submit a more appealing deal by Friday. Canadian Pacific’s $29.6 billion offer was last month pushed aside after the U.S. Surface Transportation Board rejected its voting structure. 

Elsewhere, Alibaba Group Holding Ltd. was lower after a Financial Times report said Beijing wants to break up payments app Alipay, which is owned by affiliate Ant Group. 

In commodities, West Texas Intermediate crude oil added 90 cents to $70.62 a barrel and was on track for its best close since Aug. 2. Gold, meanwhile, slipped $2.60 to $1,789.50 an ounce.

Overseas markets were mostly higher. 

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European bourses rallied across the board with Germany’s DAX surging 1.06%, France’s CAC 40 advancing 0.79% and Britain’s FTSE 100 up 0.76%.

In Asia, Japan’s Nikkei 225 and China’s Shanghai Composite edged up 0.22% and 0.33%, respectively, while Hong Kong’s Hang Seng index tumbled 1.5%. 

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