Equities are higher and the dollar is weaker following positive data from Europe and ahead of key retail sales numbers at home.
More than two hours before the opening bell, markets edging higher with Dow futures are up 21 points to 10,569 and the S&P 500 pointing up by 2.25 points to 1,148.25.
Meantime, the dollar is slightly weaker, WTI crude oil is up 51 cents to $82.62 per barrel, and Spot Gold is up $7.93 to $1,117.43.
Sentiment was boosted as Eurozone industrial production hammered expectations and jumped 1.7% in January, marking the biggest gain in more than two decades. Figures for December were also revised up.
Industrial production also jumped 2.7% in Japan, also beating expectations.
Back in the US, headlines are beaming that Janet Yellen, president of the San Francisco Fed, has been tapped by the Obama Administration as vice chairman of the central bank.
Yellen, who chaired the White House Council of Economic Advisers under President Clinton, is widely known as a dove, meaning she’s unlikely to push the FOMC for a hike in interest rates. She is also an unemployment expert, reports said.
Bloomberg News said the Administration is still vetting the candidate.
Key Events Today:
8:30 ― Retail Sales is easily the most important figure to be released this week. And that’s unfortunate, because sales are expected to fall 0.2% in February after 0.5% gain to start the year. Part the negativity is due to autos as new vehicle sales slid 4.2% in the month, but even with them excluded the index is expected to be flat following a 0.6% gain.
Ellen Zentner from BTMU said the results will be dim for two reasons.
“Blame Toyota, but mostly blame the weather because we expect a -3.3% decline in motor vehicle sales in February and that’s going to be the biggest drag on overall retail sales,” she said. “But weather also depressed other areas of spending as snowstorms and all-around nasty weather hit the country over and over again throughout the month. Already we saw a weather-impact on February payrolls in which retail jobs were flat following a big +42K gain in the prior month.”
Analysts at IHS Global Insight point out that not all news has been negative lately.
“The ICSC index of comparable chain-store sales increased a surprisingly strong 1.0% in February, suggesting some upside risk to our projection,” they wrote. “The rebound in the stock market appears to be boosting sales of apparel and luxury goods, but it will take an upturn in employment to generate robust growth across sales channels.”
10:00 ― It looks as though Consumer Sentiment will be of no real importance this month. The consensus call is for the score to edge up from 73.6 to 74.0, not quite a breathtakingly steep climb.
Economists from Nomura said the Reuter's/University of Michigan report should inch up due to “improving financial conditions.” Analysts from IHS Global Insight note that “encouraging signs” of imminent job growth could help too. And the forecasting team at BBVA looks for upward trend, albeit a slow one because of general economic uncertainty.
10:00 ― Business Inventories are set to increase by 0.2% in January, effectively filling in for the 0.2% drawback in December.
“The inventory adjustment has been playing an important role in stimulating industrial production and driving GDP growth over the past two quarters,” wrote economists at BBVA. “Businesses allowed stock levels to get so low that they now need to rebuild inventories in order to meet sales demand. As a result, inventories are expected to rise in January, indicating that the change in inventories could also have a positive impact on 1Q10 GDP.”
