Comments from Fed Chairman Ben Bernanke and a surge in investment in China’s fixed assets helped boost risk appetite during European trading and have U.S. futures pointing toward a higher open.
[B]What To Watch For In The US Session
• Bernanke Comments Raise Optimism
• Bank of America Sells Chinese Bank Stake
• Ford Issues Common Stock To Pay Heath Care Obligations
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Futures Higher as Bank of America Sells Stake in Chinese Bank Supporting Bernanke’s Comments[/B][/U]
Comments from Fed Chairman Ben Bernanke and a surge in investment in China’s fixed assets helped boost risk appetite during European trading and have U.S. futures pointing toward a higher open. The central bank leader said that he was encouraged by how fast banks were raising capital, which was evident by Bank of America raising $7.3 billion from their sale of their stake in Chinese construction bank. Meanwhile, despite Chinese exports continuing to slump, a 30.5% increase in investment in factories has fuel optimism that domestic growth will offset the declining global demand and will put growth back on track for the Asian economy. On the fundamental calendar the U.S. trade balance report is due for release and is expected to show the deficit grow for the first time in seven months to -$29 billion from -$26 billion as rising oil prices raised total imports. Increasing optimism and continued stimulus are expected to have boosted domestic demand which would add to the positive story for the U.S. economy and could add to increasing risk appetite. Meanwhile, Ford motor company announced that it will issue 300 million common shares to pay off its health-care obligations to the auto unions.
[B]Dow Jones 8418.77[/B]
The DJIA futures have remain slightly in positive territory throughout overnight trading and the increased investment in China could raise the outlook for demand from the Asian economic power and boost profit expectations for companies that have penetrated the market. McDonalds and Microsoft are companies to watch.
[B]NASDAQ 1731.24[/B]
The Nasdaq held up the best of the three major indexes as tech stocks traded even as they benefited from the flight to safety yesterday. Financials dropped over 2% and could see support today following the Fed Chairman comments and Bank of America’s ability to raise capital after several smaller banking names issues stock yesterday.
[B]S&P 500 909.24[/B]
The S&P 500 may also benefit from the bullish sentiment surrounding banks as the sector’s recent rally has made it the second biggest component of the broader index accounting for 14%.
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