Equity futures are once again indicated higher this morning. The question is whether stocks will maintain momentum throughout the day, or fizzle out just as they did yesterday.
Ninety minutes before the opening bell, Dow futures are up 54 points to 10,202 and S&P 500 futures are up 4.25 points to 1,090.50.
The 2-year Treasury note yield is 1 basis point higher at 0.738% and the benchmark 10-year Treasury note yield is less than 1 basis point higher at 3.264%.
The NYMEX crude oil futures contract is up 0.44 to 75.56 while Gold futures are up $1.20 at $1,225.70.
Yesterday, equity prices rose as much as 1.55% before tumbling back in the final hours. The S&P closed down 0.18% and the Dow fell 0.20%.
Key Events Today:
6:15 ― James Bullard, president of the St. Louis Federal Reserve, speaks on asset bubbles, in Hong Kong, at the Institute of Regulation and Risk of North Asia
8:30 ― The Empire Fed Manufacturing Index, the first regional report on the sector to be released each month, is expected to continue expanding for the 11th straight month in June. Last month, the index dropped more than 11 points but remained healthy at 19.1; in June economists are looking for a 21.0 score, which would provide confirmation that manufacturing is leading the economic recovery.
Economists at Nomura described the 11-point drop last month as a “temporary setback. However, if the index fails to recover ― and if confirmed in the Philly Fed index later this week ― it could suggest that the manufacturing recovery is starting to slow.”
9:00 ― The Treasury International Capital or TIC Flows report ― a measure of the flows of financial instruments into and out of the country ― improved significantly across the board in March as the Eurozone debt crisis prompted a flight-to-quality away from Europe and towards the U.S. Total TIC flows were way above expectations at $140.5 billion, “almost a threefold increase from the prior month, which is a series record,” according to economists at TD Securities.
For the April report, economists at Nomura anticipate more of the same.
“We expect that the ongoing sovereign debt crisis in Europe, as well as a structural shift out of euro-denominated assets, was behind the turn,” they argued in a weekly note. “Given that the spike in global risk aversion did not begin until early May, this week's April data should echo the March results.”
10:00 ― The Housing Market Index is a measure of homebuilder sentiment compiled by the National Association of Home Builders. Last month it rose three points to 22 last month, beating the consensus forecasts, yes, but not signalling any real optimism. The range of the index is from 0 to 100, suggesting that deep pessimism continues to reign despite hitting the highest level since August 2007. The index has been below the 50 threshold since May 2006.
No consensus from economists is available, but analysts at IHS Global Insight said to look for a decline after single-family housing permits for construction dropped 10% in April.
“We expect this decline to be reflected in May's single-family housing starts — with total housing starts dropping about 9% to a 610,000 annual rate,” they predicted. “We are also expecting another double-digit drop in single-family permits, further payback for the tax credit, and for permits to drop to a 563,000 annual rate.”
Treasury Auctions:
- 4-Week Bills
