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US stocks open higher as Powell clinches second-term nomination

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Federal Reserve Chairman Jerome Powell
US president Joe Biden has nominated Federal Reserve chairman Jerome Powell for a second term. Photo: Susan Walsh/AP

US stocks started the day in the green on Monday and the dollar gained as the White House confirmed it will stick with its nomination of Jerome Powell as chairman of the Federal Reserve. 

Lael Brainard will become vice-chair.

The S&P 500 (^GSPC) was up 0.7% by the end of the day in London, the Dow (^DJI) headed 0.7% higher and the Nasdaq (^IXIC) rose 0.2%. 

"Powell and Brainard share the Administration’s focus on ensuring that economic growth broadly benefits all workers," the White House said in a release.

"That’s why they oversaw a landmark re-evaluation of the Federal Reserve’s objectives to refocus its mission on the needs of workers of all backgrounds."

"Market reaction has been pretty hawkish, which is kind of odd since a) he ain’t no hawk and b) the odds on Brainard were long," said Neil Wilson, chief market analyst at Markets.com.  

"Still there seems to have been something of a Brainard trade which is being unwound, or perhaps it’s just the kind of market overreaction to an unpriceable bit of news which is good to fade…"

Meanwhile, European stocks were mixed, with gains tempered by mounting COVID cases across the continent. 

The FTSE 100 (^FTSE) closed 0.6% in the green. Meanwhile, the DAX (^GDAXI) was flat and France's CAC (^FCHI) was up 0.1%.  

COVID concerns also weighed on oil prices, which were pushed down towards eight-week lows on worries of decreased demand.

"The potential rally in stocks this week would likely set the stage for the year-end Christmas rally," said Naeem Aslam, chief market analyst at AvaTrade. 

"Stock markets performed well last week with the S&P 500 rising 0.3% and Nasdaq climbing 1.2% because of strength seen in retail data and earnings reports of established retailers."

Read more: CBI calls for regional economic clusters to level up UK

Overnight in Asia, there was a mixed day of trade. Hong Kong's Hang Seng (^HSI) fell 0.4% and the SSE Composite (000001.SS) rose 0.6%. Meanwhile Japan's Nikkei (^N225) was also up 0.1%. 

Hong Kong-listed JD.com and Netcase were buoyed by the news from Friday that they are set to be included in the Hang Seng. 

China's central bank had also earlier warned of the dangers posed by "stagflation". 

Watch: Will Interest rates stay low forever?

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