News Column

Stocks May Open Higher On Upbeat Chinese Manufacturing Data - US Commentary

July 1, 2014

WASHINGTON (Alliance News) - After ending the previous session narrowly mixed, stocks are likely to move to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 48 points.

The upward momentum for the markets is partly due to the release of Chinese manufacturing data showing faster growth in the sector.

A report from the China Federation of Logistics and Purchasing and the National Bureau of Statistics showed that their reading on Chinese manufacturing activity climbed to a six-month high of 51.0 in June from 50.8 in May.

Revised estimates released by Markit and HSBC confirmed that Chinese manufacturing activity rebounded in June, with their index rising to 50.7 from 49.4.

Meanwhile, a separate report from Markit showed that manufacturing activity in the euro area expanded at a slower pace in June.

The manufacturing index for the euro zone fell to 51.8 in June from 52.2 in May, although a reading above 50 indicates the twelfth consecutive month of growth.

Not long after the open, the Institute for Supply Management is scheduled to release its report on US manufacturing activity in the month of June.

Economists expect the ISM's manufacturing index to edge up to a reading of 55.8 in June after climbing to 55.4 in May.

The Commerce Department is also scheduled to release a report on construction spending in the month of May, which is expected to rise by about 0.5%.

Stocks showed a lack of direction throughout the trading day on Monday, as traders seemed reluctant to make any significant moves. The choppy trading came on the heels of the mixed performance shown by the markets last week.

The major averages eventually ended the day on opposite sides of the unchanged line. While the Nasdaq rose 10.25 points or 0.2% to 4,408.18, the Dow dipped 25.24 points or 0.2% to 16,826.60 and the S&P 500 edged down 0.73 points or less than a tenth of a % to 1,960.23.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan'sNikkei 225 Index surged up by 1.1%, while Australia's All Ordinaries Index fell by 0.3%. The markets in Hong Kong were closed for a holiday.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has ticked up by 0.2%, the UK'sFTSE 100 Index and the French CAC 40 Index are both up by 0.6%.

In commodities trading, crude oil futures are climbing USD0.34 to USD105.71 barrel after sliding USD0.37 to USD105.37 a barrel on Monday. Meanwhile, gold futures are rising USD5.20 to USD1,327.20 an ounce. On Monday, gold edged up USD2 to USD1,322 an ounce.

Among currencies, the US dollar is trading at 101.54 yen compared to the 101.33 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at USD1.3683 compared to yesterday's USD1.3692.

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Source: Alliance News