13th May 2014 12:22
LONDON (Alliance News) - US equities are set to open higher Tuesday, following a record-breaking session on Monday, as investors await a raft of US macro-economic data releases.
The DJIA and S&P 500 both ended the day at record highs Monday. The DJIA closed up 0.7% at 16,695.47, while the S&P 500 closed up 1.0% at 1,896.65. The NASDAQ Composite also performed strongly, closing up 1.8% at 4,143.859.
This positive sentiment is expected to continue into Tuesday's session, with the three indices all called to open up approximately 0.2%.
US futures are pointing to the higher open, as investors continue to look beyond the ongoing crisis in eastern Ukraine and instead focus on the improving economic data and reports of more M&A activity," says Craig Erlam, market analyst at Alpari.
In Europe, ahead of the New York bell, major stock indices in the UK and Europe are firmly higher. The FTSE 100 is up 0.1% at 6,861.29, and the FTSE 250 is up 0.3% at 16,027.32, while the CAC 40 in Paris and the DAX 30 in Frankfurt are up 0.2% and 0.6%, respectively.
"The UK?s FTSE (100) could be the next major index to reach a fresh record high," says Fawad Razaqzada, technical analyst at Forex.com.
The blue-chip index touched its highest level in fourteen years early in the session, but has since pared some of these gains on the back of some weaker-than-expected ZEW surveys for economic sentiment in Germany and the eurozone.
The forward-looking ZEW economic sentiment survey for Germany fell faster than expected in May, recording 33.1, down from 43.2 in in April and missing economists expectations for a reading of 41.0. Similarly, the eurozone economic sentiment survey also missed expectations, coming in at 55.2 in May, down from 61.2 in April, well below the rise to 63.5 that had been expected.
However, "the index does look poised to finally break higher...and reach fresh record highs," says Razaqzada. "If and when the FTSE clears decisively above the 6,885 area, then we could see a run towards 6,950 which was the intra-day record peak that was reached in 1999," the technical analyst adds.
"All of the M&A chatter in the market is really helping to lift sentiment right now and provides a welcome distraction from all of the negativity that weighed on markets earlier this year," says Alpari's Erlam.
According to reports, AT&T Inc is in talks to buy satellite television company DirecTV in a cash and stock deal that could close in two weeks time. AT&T will pay about USD100 a share, or about USD50 billion, for the company, according to a Bloomberg report, citing people familiar with the matter.
AT&T shares are down 0.3% in pre-market trading, while DirecTV's shares are up 3.8%.
Meanwhile, Bloomberg has reported that US pharmaceutical giant Pfizer Inc is planning to raise its bid for British rival AstraZeneca before it considers whether to make a hostile offer. Pfizer's shares are up 0.2% in pre-market trading, while in London, AstraZeneca shares are up 2.4%.
There is a raft of US macro-economic data still to be released Tuesday.
The US Commerce Department is scheduled to release its retail sales report for April at 1230 GMT. Economists' expectations are for retail sales to have risen 0.4% month-over-month in April, while retail sales, excluding autos, may have risen 0.6%.
That said, "US economic outcomes have increasingly improved relative to expectations since early April, opening the door for an upside surprise," says Ilya Spivak, a currency strategist at DailyFX. "Such an outcome may scatter doubts about the continuity of the Federal Reserve's effort to taper quantitative easing asset purchases," he adds.
"Needless to say, such a result bodes well for the US dollar against most of its leading counterparts," Spivak says.
Ahead of the data, the dollar trades at JPY102.325, while the euro trades at USD1.3713, and the pound trades at USD1.6841.
The US Labor Department is due to release its report on export and import prices for April at the same time. The consensus estimate calls for a 0.3% month-over-month increase in export prices and a 0.3% increase in import prices.
Meanwhile, US business inventories data are released at 1400 GMT. Economists expect business inventories to have risen by 0.4% in March compared to the previous month.
By James Kemp; [email protected]; @jamespkemp
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