X Futures for the Dow Jones industrial average, S&P 500 index and Nasdaq 100 jumped on the first round of the French presidential election.
Global multinationals may particularly benefit, as Dow components Microsoft (MSFT) and Boeing (BA) as well as Alphabet (GOOGL) trade at or near buy points.
Centrist Emmanuel Macron came in first and will face off against nationalist Marine Le Pen in the May 7 runoff. Le Pen favors a major break with the European Union and the euro. But polls have suggested Macron, who has backed economic reforms and defended the EU, would easily defeat the populist Le Pen in a head-to-head contest.
Dow Jones industrial futures opened more than 200 points above fair value, though by early Monday morning they pulled back to 160 points, or 0.8%. Futures for the S&P 500 index and Nasdaq 100 were up about 0.9%. The euro shot up to a five-month high.
IBD'S TAKE: The French presidential election is just the start of an action-packed week for investors. The Investing Action Plan gives you a rundown of all the big earnings reports and economic data on tap.
Microsoft rose 1.4% to 66.90 in Friday stock market trading, retaking a 66.01 buy point from a flat base. Microsoft reports earnings on Thursday, as the Windows and Office software giant is becoming a cloud computing giant.
Boeing has found support at its 10-week line in its own flat base. The aerospace and defense giant, which reports Wednesday, closed Friday at 180.38. It has a potential buy point of 187.81.
Google parent Alphabet rose 2.2% to 858.95 last week, regaining its 50-day moving average. Alphabet rose is moving toward reclaiming its 867.10 buy point. Alphabet reports late Thursday.
Separately, BD (BDX) agreed to buy medical tech firm C.R. Bard (BCR) for $24 billion, the companies said Sunday.
Even as U.S. investors cheer France's election results, they also must recalibrate the odds of tax reform at home.
The major market averages rallied Thursday as Treasury Secretary Steven Mnuchin talked up tax cuts. Markets came off Friday's lows as Trump himself said "massive tax cuts" plan would be announced this coming week. But on Sunday, White House officials said Wednesday's announcement will mostly be broad principles, with some indication of proposed tax rates.
Asian Markets
Asian markets were mixed Monday, with Japan's Nikkei up 1.3% but Hong Kong's Hang Seng down 0.1% and China's Shanghai composite off 1.6%.
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