The major U.S. index futures are pointing to a higher opening on Monday. After a week of directionless trading, the markets enter the new week with optimism stemming from positive data from China, which showed that exports posted first year-over-year growth in fourteen months. Chinese exports rose 17.7% year-over-year in December, notably higher than the 5% growth estimated by analysts. In reaction to the report, commodity prices are advancing.
Commodities are also getting a boost from the U.S. dollar, which is showing weakness following the vanishing of rate hikes hopes after the U.S. non-farm payrolls report disappointed the Street. That said, volatility cannot be ruled, given the absence of any major market moving report in today's session.
U.S. stocks rebounded in the week ended January 8th, as a commodity price rally, reflecting partly the optimism concerning recovery kept sentiment upbeat. Consequently, the major averages chalked up decent gains for the week.
Buoyed by encouraging growth data from across the globe, the major averages ran up sharply last Monday, ending the day with gains in excess of 1.50% each, at fresh 15-month highs. On Tuesday, stocks showed trepidation ahead of the week's key data releases and ended on a mixed note, as traders digested a negative housing market report.
Stocks had a mixed close yet again on Wednesday, as indecision and reluctance to take positions ahead of Friday's non-farm payrolls report impacted sentiment. While the Dow Industrials and the S&P 500 Index closed slightly higher, the Nasdaq Composite ended in negative territory. The mixed trend continued into Thursday's session amid indecision. After a disappointing jobs report generated selling pressure early in Friday's session, the major averages recovered in late trading to close modestly higher.
For the week, the Dow Industrials was up 1.82%, the S&P 500 Index and the Nasdaq Composite Index advanced 2.68% and 2.17%, respectively.
Among the sector indexes, the NYSE Arca Oil Index and the Philadelphia Oil Service Index rose 4.49% and 11.13%, respectively for the week and the NYSE Arca Gold Bugs Index gained 7.60%. The KBW Bank Index surged up 10.04% compared to a 5.36% advance by the NYSE Arca Airline Index and a 6.30% gain by the Philadelphia Housing Sector Index.
Commodity, Currency Markets
Crude oil futures are gaining $0.98 to $83.73 a barrel after they rose notably in the week ended January 8th, advancing $3.39 or 4.27% to $82.75 a barrel.
The commodity rose moderately on Monday and rose further on Tuesday and Wednesday, there by extending its gains to the tenth straight session. The gains were primarily attributed to investor interest in the commodity, as they took fresh positions in the commodity as part of their asset reallocation process.
Snapping its 10-session winning run, oil retreated moderately on Thursday. However, on Friday, oil resumed its climb before settling the week slightly higher.
Gold futures, which climbed $42.70 or 3.75% to $1,138.90 an ounce in the previous week, are currently advancing $18.80 to $1,157.70 an ounce.
On the currency front, the U.S. dollar reversed course in the week ended January 8th, with the greenback dropping 0.41% against the yen to 92.656 yen. Against the euro, the dollar lost 0.6% to $1.4409.
Currently, the dollar is trading at 92.47 yen and is valued at $1.4523 versus the euro.
Asia
The major Asian markets ended Monday's session mostly higher, although the Japanese market remained closed for a public holiday. Sentiment was supported by higher commodity prices, which advanced following optimistic data from China.
Australia's All Ordinaries opened unchanged, but it rose sharply in early trading and thereafter, advanced steadily for the rest of the session. The index closed up 39 points or 0.79% at 4,981. Material stocks advanced strongly, with energy stocks also participating in the rally. On the other hand, telecommunication and utility stocks receded in the session.
The four major banks advanced in the session, while in the mining space, BHP Billiton, Incitec, Lihir Gold, Newcrest Mining and Rio Tinto showed strong gains. On the other hand, Telstra, Telecom New Zealand, CC Amatil, CSL, WorleyParsons and Woolworths receded in the session.
Hong Kong's Hang Seng Index, which opened notably higher and moved sideways in the morning, pared back some of its gains in the afternoon, but yet closed up 114.77 points or 0.51% at 22,412.
Twenty-nine of the forty-two index components ended the session higher, with China Mercantile Holding, Chalco and Cosco Pacific being the notable gainers. However, FIH, ICBC and China Resource Power declined sharply.
In major economic news from the region, data from Quotable Value showed that home prices were up 2.8% year-on-year in December, faster than the 1% rise in the previous month. The state-owned agency said in a statement that house prices ended 2009 just 4.9% below the market peak, with the national average sale price increasing to 404,671 in December New Zealand dollars from 393,373 New Zealand dollars in November.
Europe
The major European markets opened Monday's session higher and have been trading higher, although they have given back some of their grounds subsequently. The French CAC 40 Index and the German DAX Index are rising 0.53% and 0.66%, respectively, while the U.K.'s FTSE 100 Index is moving up 0.51%.
In corporate news, Dutch brewer Heineken announced that it would buy the beer-making unit of Mexico's Femsa for 5.3 billion euros in an all-stock deal. The deal gives the Mexican company a 20% stake in Heineken.
On the economic front, French statistical agency, INSEE reported that industrial production in France climbed a seasonally adjusted 1.1% month-over-month in November, reversing the 0.6% decrease in the previous month. The increase exceeded expectations for a 0.2% climb. On an annual basis, industrial production slumped 3.8% compared to expectations for a 5.4% fall.
At the same time, manufacturing output grew 1.6% month-over-month in November, rebounding from the 0.5% decline in the preceding month. On a yearly basis, manufacturing production slid 2.9%.
U.S. Economic Reports
The unfolding week is likely to be back-end loaded, as the bulk of the economic reports scheduled for the week are released over Thursday and Friday. The Commerce Department's retail sales report for December, the Federal Reserve's industrial production report for December, the results of the New York Fed's Empire state manufacturing survey for January, the preliminary Reuters/University of Michigan consumer sentiment index for January and the weekly jobless claims report are likely to be on the traders' radar.
The markets may also closely watch the Commerce Department's trade balance report for November, the Federal Reserve's Beige Book, the Labor Department's import and export prices report for December and the announcements concerning Treasury auctions of 10-year TIPS (due at 1 PM ET on Monday), 3 year notes (due at 1 PM ET on Tuesday), 10-year notes (due at 1 PM ET on Wednesday) and 30-year bonds (due at 1 PM ET on Thursday).
Traders may also pay attention to the Fed speeches scheduled to be delivered during the week, while also showing some interest in the Treasury Budget for December and the Commerce Department's business inventories report for November.
Reports of strong holiday sales bode well for the retail sales for December Additionally, auto sales also were higher than expected, with light vehicle sales rising at a seasonally adjusted annual rate of 11.2 units in December. BNP Paribas in its weekly commentary noted that the environment is gradually becoming favorable for consumers, as job losses are shrinking and equity markets are rallying. However, a sustained consumption recovery faces threat from tough credit conditions and high household debt.
Consumer prices are expected to rose moderately in December, while the core consumer price inflation rate is likely to remain muted due to slowing wage growth and weak pricing power. Danske Bank is of the view that the massive amount of slack in the U.S. economy will keep inflation low for the coming years, with a risk of it dropping below zero.
Going by the improvement in productivity, one can expect a gain in the industrial output for December. Higher utility output on the back of unseasonably cold weather in the Northern hemisphere may also have helped output. The rise in the ISM's manufacturing purchasing managers' index to 55.9 in December signals that sector is chugging along nicely.
The trade balance report for November is likely to reveal that the export growth witnessed in the past two months slowed, although imports are expected to climb higher on a rise in oil prices and inventory rebuilding.
Stocks in Focus
Allscripts-Misys Healthcare Solutions (MDRX) is likely to be in focus after it reported second quarter total revenues of $169.3 million and non-GAAP revenues of $170.7 million, higher than $163.4 million in the year-ago period. The company reported non-GAAP earnings of 16 cents per share. Analysts estimated earnings of 15 cents per share on revenues of $170.55 million. The company raised its 2010 non-GAAP earnings per share guidance to 61-63 cents per share, while affirming its revenue guidance of $680 million to $700 million. The consensus estimates call for earnings of 62 cents per share on revenues of $695.78 million.
Continental Airlines (CAL) may see some activity after it announced that it has suspended operations at its Cleveland hub at Hopkins International Airport through 6 p.m. on Sunday due to widespread airport power outage.
Sanofi-Aventis (SNY) is expected to be in focus after it announced that it has commenced a tender offer to acquire all outstanding shares of Chattem (CHTT) for $93.50 per share, net to seller in cash without interest and less any required withholding taxes. The offer is made in connection with Sanofi-Aventis' previously announced agreement and plan of merger dated December 20th, 2009. The tender is expected to expire at 12 midnight on February 8th, 2010.
Washington Federal (WFSL) may see some activity after it announced the acquisition of certain assets and liabilities, including most loans and deposits of Washington-based Horizon Bank. Washington Federal agreed with the FDIC to an asset discount and FDIC loss sharing on loans.
Target (TGT) is also expected to be in the spotlight after it announced that it has acquired Smith & Hawken brand and other intellectual property from Smith & Hawken Ltd., a subsidiary of Scotts Co. , effective December 30th, 2009.
LiveNation (LVY) may react to its announcement that its stockholders had approved on Friday issuance of LiveNation common stock in connection with its previously announced merger with Ticketmaster Entertainment (TKTM). The company's shareholders also approved the proposal to change the company's name to Live Nation Entertainment following the completion of the merger.
Mannkind Corp. (MNKD) is likely to see some weakness after the FDA announced that it would not be able to complete the review of the company's NDA for its rapidly acting insulin therapy by the action date of January 16th, 2010. The FDA had indicated that it has not yet completed the inspection of the company's insulin manufacturing facilities of a third party supplier to Mannkind.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.