EmailS&P futures indicate an up open of about seven points. This is being ascribed to positive developments from Greece and China. Worries over Spain are being deferred for now.
The Greek news is that the pro-bailout, stay-in-the-euro political party is rising in the polls ahead of the June 17 election. It is a stretch to expect any long-term resolution from the next round of elections, but at least the slow moving train crash appears to have been delayed. For that, futures get a boost.
There are also, reportedly, rising expectations that China will implement a new stimulus package. That helped boost Asian stocks and is a positive for US stocks this morning.
Less influential today is the rising concern over Spain. Some Spanish banks were downgraded on Friday, the government has been forced to bail out the third largest bank in the country, Spanish retail sales in April were down 9.8% from year-ago levels, and Spanish stocks fell on Monday and are down about 2.5% today even while most European exchanges are up about one-half of one percent.
From a fundamental standpoint, the hard facts about the problems in Spain seem more important than the hopes for Greece and China, but for now, the hopes are holding up. It is possible that this optimism over international events fades during US trading hours.
The Case-Shiller home price index will be out at 9:00 ET and the May consumer confidence index from the Conference Board at 10:00 ET. These releases have the potential to provide a modest boost to the stock market.
The market remains extremely sensitive to headlines out of Europe. That means continued high levels of intermediate-term risk.
Founder and Chairman, Briefing.com
