US pre-open: Stocks to rise marginally ahead of housing data as euro tumbles

LONDON (ShareCast) – US stocks futures pointed to a higher open on Friday, as investors awaited housing data and a host of companies were set to publish their earnings reports. The Dow Jones Industrial Average is expected to open approximately 41 points higher than Thursday’s close of 17,813.98, while the S&P 500 and the Nasdaq are expected to being the final session of the week five and six points higher, respectively.

A day after the European Central Bank announced a plan to inject more than a trillion euros into the Eurozone, the euro fell below $ 1.13 on Friday, hitting an 11-year low. The currency was at $ 1.1166 in early New York trading on Friday, its lowest since November 2003 and down 0.7% on the day, having also lost over 1.3% against the pound.

“QE means risky assets will again be the flavour of the month and especially if oil prices come close to a bottom; that could see an end to the recent sideways action in equity markets,” said Jasper Lawler, market analyst at CMC Markets. “The ECB bond purchases are a possible game-changer for the relative valuations of European versus American assets.” However, Lawler added that European markets could, in the long term, benefit from the ECB’s decision to commit to a bond-buying programme.

“The outlook for US markets may now not be as rosy as those in Europe,” he said in a note on Friday.

“Valuations are more attractive in Europe and while the European economy is going down the tubes, European corporations now not only have record low borrowing rates to use but central bank liquidity flowing into their equities.” Ahead of the bell, General Electrics edged forward after reporting fourth quarter earnings of $ 56 cents a share, narrowly beating consensus of $ 55 cents a share. McDonald’s share were up 0.6% but the fast food chain is expected to report a pull-back in earnings to $ 1.22 a share later on Friday.

Honeywell International (NYSE: HON – news) rose in pre-market trading after reporting fourth quarter profit of $ 975m. Excluding the pension mark-to-market adjustment, per-share earnings were $ 1.43, beating forecast of $ 1.42.

Meanwhile Starbucks rose almost 5% after reporting late on Thursday that first quarter profit rose to $ 983.1m, while Capital One Financial fell over 1% after its fourth quarter earnings missed Wall Street’s estimates.

Friday sees Chicago Federal Reserve’s national activity index released at 8:30 ET, followed an hour later by the release of US preliminary manufacturing activity in January from Markit (NasdaqGS: MRKT – news) . At 10:00 ET, the National Association of Realtors is expected to say that, in December, the sales of existing home rose to a seasonally adjusted rate of 5.08m, while the Conference Board’s index of leading economic indicators is due for December at the same time.

Oil futures rebounded in the wake of the death of Saudi Arabia’s King Abdullah and marginal improvement in China’s manufacturing data, while gold futures fell by almost $ 2.

S&P Futures

spfutures.org@imediaone.com

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