EmailEuropean stock markets are broadly higher. That has S&P futures pointing to a modest up open.
It is a bit confusing as to why European stock exchanges are higher. What was widely described as an ad-hoc meeting of European leaders last night failed to produce any results. That really isn't surprising, of course, but no news isn't exactly good news given the problems in Europe.
In addition, the euro is lower and has broken below the 1.26 level many talking heads on TV said was a critical level. And manufacturing and business sentiment surveys from France and Germany were weak.
The equity markets are widely considered oversold, so that will serve as an adequate explanation for the gains in Europe and the slight uptick in the S&P futures.
The S&P 500 has actually been up three days in a row. Monday was a large bounce, and then there were two wild intra-day rides the ended with modest gains. There is some comfort in the apparent stabilization, but the volatility raises risk concerns that will keep sentiment extremely cautious.
Hewlett-Packard stock is up over 7% pre-market after their earnings report last night, which has been a boost to the Nasdaq. But the shares are up due to cost cutting rather than evidence of rising demand, so the impact is limited.
New claims for unemployment for the week ended May 19 were 370,000, down 2,000 from the prior week. Claims have dipped to an average 370,000 the past four weeks from 390,000 the two weeks of April 14 and 21. The recent stability in claims is a good sign that the labor market is fairly stable and not worsening as recently feared.
Durable goods news orders for April were up 0.2% compared to expectations of a 0.3% gain. That is remarkably in line with forecasts for this very volatile series. Excluding transportation, orders fell 0.6% while a gain of 1% was expected, but that isn't disconcerting. The economic data today are steady enough to warrant only a cursory glance before focussing back on Europe.
The market is likely to remain extremely sensitive to any headlines from Europe.
Founder and Chairman, Briefing.com
