News Column

MARKET COMMENT: US Stocks Seen Mixed With No Data To Direct Investors

June 9, 2014

James Kemp

LONDON (Alliance News) - US stock futures are pointing to a mixed, but muted, open on Monday, following yet another record-breaking session on Wall Street on Friday, as investors opt to sit on the sidelines with no US data scheduled to be released.

Friday's strong close came on the back of the release of a report from the US Labor Department showing that employment rose roughly in line with economist estimates in the month of May.

The US non-farm payrolls report showed that the US economy added 217,000 jobs in May, just 1,000 fewer than the consensus expectation, while the April number was revised down slightly to 282,000, from its very strong original print of 288,000. At the same time, the US Labor Department revealed that the headline rate of US unemployment remained stable at 6.3% over the month, beating economist expectations for it to edge up to 6.4%.

The NASDAQ Composite closed at its highest level since March, up 0.6% at 4,321.399, while the DJIA and S&P 500 both closed at all-time highs. The former ended the day up 0.5% at 16,924.28, with the latter closed up 0.5% at 1,949.44.

However, with no US data due to be released Monday, Wall Street is set for a mixed, but muted, open. Ahead of the New York bell, the DJIA and NASDAQ Composite are both called to open fractionally higher, while the S&P 500 is called to open fractionally lower.

"US markets must rely on Friday's job number if they are to retain the upward move that was so clearly in evidence last week," says Chris Beauchamp, a market analyst at IG. "The fact is that rallies need fresh news to sustain them and, aside from retail sales later this week, that news is worryingly absent," he adds.

At the corporate level, US-meat producer Tyson Foods Inc has won the battle for Hillshire Brands Co., outbidding Pilgrim's Pride Corp., a unit of Brazilian meat giant JBS SA, reports have suggested. Tyson will reportedly pay USD63 per share in cash for Hillshire, valuing the company at USD7.8 billion.

However, "the expected price of USD63 per share is close to 50% higher than the market price at the time of Pilgrim's first bid which could lead to questions as to whether the company has overpaid," says Jasper Lawler, a market analyst at CMC Markets.

In the UK, the FTSE 100 is up 0.2% at 6,873.58, while the FTSE 250 is down 0.2% at 16,197.41, and the AIM All-Share index is almost perfectly flat at 805.22.

In Europe, the CAC 40 in Paris is a touch lower, while the DAX 30 in Frankfurt is marginally higher.

Meanwhile, in the forex market, the euro continues to struggle against its major rivals, after it fell in the wake of a disappointing eurozone Sentix investor confidence survey outcome. The reading of the current economic situation slipped to a six month low of 8.5 in June, down from 12.8 in May and missing economists forecasts for a rise to 13.2.

Ahead of the US equity market open, the single currency trades at USD1.3607 and JPY139.422, while the pound trades at EUR1.2345.

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Source: Alliance News

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