U.S. stock futures declined Monday morning as investors' concerns that the Federal Reserve might tighten interest rates next year grew. Gold prices fell further as the dollar continued to strengthen. On Friday, stocks finished higher after a much better-than-expected monthly jobs data showing the fewest job losses since the start of the recession. But with the jobs reports came concerns that the Fed could raise interest rates earlier than anticipated. So far, the Fed has maintained it would keep rates near zero as long as the labor market remains strained. But if the economy is improving, the Fed may have to raise rates soon to protect against inflation.
Naturally, in focus today is a speech from Fed chairman Ben Bernanke. He is due to speak at the Economic Club of Washington at noon.
Meanwhile, the Obama administration plans to cut its estimate of the projected costs of the government bailout program by more than $200 billion and is looking at using part of the savings to fund new job creation efforts. This will put financials in focus today.
Overseas, Asian markets generally finished higher with Japan's Nikkei average climbing 1.5% to a six-week closing high on Monday. Exporters and JAL were among those leading the advances. European stocks dropped about 1% in morning trade, led lower by banking shares following news that Britain was still considering some kind of windfall tax on bankers' bonuses.
Gold prices fell 2% to session lows in Europe on Monday, on selling prompted by the dollar's rise to a five-week high versus the euro following above-consensus jobs data in the previous session. Oil futures also dropped and hovered just above the $75 a barrel level.
And options traders, it seems, aren't convinced the Standard & Poor's 500 will extend its biggest rally since the 1930s.
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