Early indications suggest that Wall Street stocks may open Tuesday's session higher, although the mood reflected uneasiness following recent gains. Commodities are lower, with oil being the exception with its modest gain, and the dollar is firmer. With little corporate news to sway the markets, it is all about fears of a potential June interest rate hike and the interpretation of the week's key economic data, including the monthly NFP report, against the backdrop. Personal income and spending, consumer confidence and Chicago area business barometer and the direction of commodity prices could be key for the market movement of the day.
As of 6:15 am ET, the Dow futures are up 23 points, the S&P 500 futures are flat and the Nasdaq 100 futures are gaining 8 points.
U.S. stocks rose solidly in the week ended May 20th, as bargain hunting and fairly in line domestic data points offered support to the markets.
Jobs, consumer and private sector activity data are among the key economic reports due for release in the unfolding week. Among the closely watched reports of the week are the Commerce Department's personal income and spending report for April, the Conference Board's consumer confidence report for May, ADP's private sector payrolls report for May, the Labor Department's non-farm payrolls report for May, the Institute for Supply Management's national manufacturing and non-manufacturing reports for May and MNI Indicators' Chicago region business barometer report for May.
Traders may also focus on a few Fed speeches, the S&P/Case-Shiller's house price survey for March, the Federal Reserve's Beige Book report, final estimates of Markit's manufacturing and non-manufacturing PMIs for May, monthly auto sales and the Commerce Department's trade balance report for April. The Commerce Department's construction spending and factory orders reports, both for April and announcements concerning the Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.
The Commerce Department is scheduled to release its personal income and spending report for April at 8:30 am ET. Economists expect personal income growth of 0.4 percent month-over-month and personal spending growth of 0.7 percent.
At 9 am ET, S&P/Case-Shiller is set to release its house price index for March. The consensus estimate calls for a 0.7 percent month-over-month increase in the house price index for March, the same pace as in the previous month. The annual increase is expected to slow to 5.1 percent from 5.4 percent.
MNI Indicators is due to release its Chicago business barometer at 9:45 am ET. Economists expect the business barometer to edge up to 50.7 from 50.4. Also at 10 am ET, the Conference Board is scheduled to release its consumer confidence index for May. Economists expect the index to improve to 97 from 94.2 in April.
The major Asian markets ended mixed, with the Chinese, Hong Kong, Japanese, New Zealand, Singaporean and South Korean markets advancing, while the rest of the major markets retreated. The strong rally by Chinese and Hong Kong stocks reflected hopes that mainland Chinese stocks would be included in the MSCI.
The Japanese market found an able ally in a weak yen, which propelled export stocks higher and in turn the broader market. The key Nikkei 225 average ended up 166.96 points or 0.98 percent at a fresh 1-month high of 17,235. China's Shanghai Composite rallied 94.17 points or 3.34 percent to 2,917 and Hong Kong's Hang Seng Index added 185.70 points or 0.90 percent before ending at a 1-month high of 20,815.
However, Australia's All Ordinaries languished below the unchanged line throughout the session, ending 25.80 points or 0.47 percent lower at 5,448.
On the economic front, preliminary data released by Japan's Ministry of Economy, Trade and Industry showed that industrial production rose 0.3 percent month-over-month in April, smaller than the 3.8 percent rise in March but belying the 1.5 percent drop expected by economists. Annually, industrial output fell 3.5 percent, more than the 1.3 percent decline expected by economists.
The Ministry of Internal Affairs and Communications reported that the jobless rate came in at 3.2 percent in April, the same rate as in March and in line with expectations. The number of unemployed people fell 100,000 to 22.4 million in April. A separate report showed that household spending in Japan fell less than expected in April.
Housing starts in Japan expanded at the fastest pace in 10 months in April, the Ministry of Land, Infrastructure, Transport and Tourism said. Housing starts grew by a more-than-expected 9 percent year-over-year in April, while economists had expected 4.1 percent growth.
A report released by the Australian Bureau of Statistics showed that building approvals rose for the second straight month in April and at a faster rate. Meanwhile, the Reserve Bank of Australia reported that total credit to the private sector in Australia increased in April, in line with expectations. Annually, credit increased at a faster rate.
European stocks opened higher but gave back their gains in early trading, as commodities edged lower and economic data from the region remained mixed. The major averages in the region are currently modestly lower.
In major corporate news, Volkswagen maintained its full year guidance after reporting declines in first quarter pre-tax profits and revenues.
On the economic front, flash estimate released by Eurostat showed that annual was -0.1 percent in May, in line with expectations. The jobless rate remained stay put at 10.2 percent in April, in line with expectations.
Data released by the German Federal Statistical Office showed that retail sales fell 0.9 percent month-over-month in April, while economists expected a 0.9 percent increase. However, on a year-over-year basis, retail sales increased at a faster rate of 2.3 percent.
A separate report showed that the jobless rate in Germany remained steady at 4.2 percent in April. The number of unemployed people eased. Meanwhile, the jobless rate that pertains to May released by the German Federal Labor Agency fell to 6.1 percent compared to the consensus estimate of 6.5 percent.
French statistical office INSEE reported that French annual consumer price inflation was at 0.1 percent in May, in line with expectations, but slower than the 0.2 percent rate in April. The harmonized index of consumer prices remained unchanged year-over-year but rose 0.3 percent compared to the previous month.
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