Ahead of the Bell: Dow futures are trading up 115 points and S&P futures are trading up 13 points. US futures signal a higher open, as US markets kickoff the shortened trading week. Supportive comments from central banks around the world indicated that monetary policies designed to support the global economy would remain in place. Both the Bank of Japan and the European Central bank reiterated that their policies would remain in place. ECB executive Board member, Joerg Asmussen said the policy would stay as long as necessary. Market participants are expecting reports to show that American consumer confidence improved and home values climbed higher. Investors will also be keeping an eye on the S&P’s 14-day moving average of 1,647.91.
- On the economic calendar today, S&P/CasheShiller home price index is due out before the market opens and 147.48 is expected. Consumer confidence for the month of May will be released after the market opens and a reading of 71.2 is expected, compared to 68.1 in April.
- The dollar is up against the euro and down against the Japanese yen and the British pound. Gold is trading at $1,378. Crude oil is currently trading at $94 a barrel.
- Last week stocks retreated after the FOMC minutes from the Federal Reserve revealed the agency is considering scaling back its asset purchase program. Several Federal Reserve officials commenting at various events added to the fuel that the agency could taper its monetary program. The major indices snapped a four-week winning streak as the Dow closed down 0.3%, while the S&P 500 index fell 1.1% for the week. Global markets also reacted that chairman Ben Bernanke and company could curtail the central bank’s QE program. The economic data continues to improve as weekly jobless claims came in below expectations. Durable goods orders rose more than expected as orders for manufacturing goods rose.
- This holiday shortened week ahead, investors could brace for some more volatility, but don't get surprised by a rally after the FOMC minutes spooked financial markets last week. Investors are concerned the Federal Reserve could end its quantitative easing program, as some members remain split over the central bank's bond-buying tapering program. This week, investors will get reports on consumer sentiment and a second reading of gross domestic product. The first reading showed the economy grew at 2.5% in the first quarter. Economists are expecting about the same reading in the follow up reading. Housing data from Case-Shiller 20-city index and pending home sales will also be in focus. Other reports on the calendar include, personal income and consumption, Thompson Reuters/University of Michigan consumer sentiment, Chicago Purchasing Managers Index, and weekly jobless claims. Asian markets also remain volatile over speculation the Fed could end is stimulus program by this summer and the Japanese NIKKI 225 index sank over 7% and recovered most of its losses last Thursday.
- On CNBC today, Roger Altman, Chairman and CEO of Evercore Partners, talked about the Federal Reserve unwinding its stimulus program. Altman said there are two important things to consider; will the markets be ready for the central bank to taper its bond-buying program and will the Federal Reserve be able to unwind its asset purchase program in a way that is not disruptive to financial markets. He is fairly confident the agency will be able to unwind its quantitative easing program. He believes Ben Bernanke and company will scale back the stimulus program by year, slowly as they see fit. He added, when history judges the central bank's response to the financial crisis, it will look back at the response as a textbook way of how to handle a financial crisis.
- Have a great day!
Friday’s Close
DJIA up 8.60 pts/+0.06%/ 15,303.10
S&P down 0.91 pts/-0.06%/ 1,649.60
Nasdaq down 0.28 pts/-0.01%/ 3,459.14
Tuesday’s Futures
Dow Futures up 115.00 pts/+0.75%
S&P Futures up 13.25 pts/+0.80%
Nasdaq Futures up 27.00 pts/+0.90%
Overseas Markets
FTSE +1.61%
CAC 40 +1.30%
NIKKEI 225 +1.20%
HANG SENG +1.05%
Overseas: World stock markets are mostly higher today as US and UK markets reopen following a holiday. Reassuring comments from central bankers across the globe lifted investor sentiment.
Economic Reports: S&P/CaseShiller Home Price Index (147.48 expected) at 9:00 a.m.; Richmond Fed Manufacturing Activity (-4 expected) at 10:00 a.m.; Consumer Confidence (71.2 expected) at 10:00 a.m.; Dallas Fed Manufacturing Activity (-10.0 expected) at 10:30 a.m.
Top Headlines:
- Valeant Pharmaceuticals (VRX) International
said on Monday it agreed to buy Bausch & Lomb Holdings Inc from Warburg Pincus LLC for $8.7 billion .
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