News Column

Wall Street Poised For Positive Start Ahead Of Retail Sales Data

August 13, 2014

WASHINGTON (Alliance News) - After trading on a lackluster note for much of Tuesday's session, Wall Street stocks are set to open higher on Wednesday. Nevertheless, the mood is likely to largely hinge on the retail sales report due to be released shortly ahead of the open. A couple of Fed speeches scheduled for the day may also drive trading. Earlier in the global trading day, Asian stocks went about in a lackadaisical fashion amid the release of weak Japanese GDP and soft Chinese data. The European stocks are holding up, although the UK market is seeing some volatility.

At 6:15 am ET, the Dow futures are adding 50 points, the S&P 500 futures are rising 7 points and the Nasdaq 100 futures are moving up 13.50 points.

US stocks declined on Tuesday, as a lack of any major catalysts amid the simmering geopolitical tensions kept sentiment subdued.

On the economic front, the Commerce Department is scheduled to release its retail sales report for July at 8:30 am ET. Economists expect retail sales growth of 0.2% month-over-month, while excluding autos retail sales is estimated to have risen 0.4%.

New York Federal Reserve President William Dudley is due to open workshop on wholesale funding risks in New York at 9:05 am ET. Additionally, Boston Federal Reserve Bank President Eric Rosengren is scheduled to speak at the workshop on wholesale funding risks in New York at 9:30 am ET.

The Commerce Department is scheduled to release its business inventories report for June at 10 am ET. The consensus estimates call for a 0.4% month-over-month increase in business inventories. The Energy Information Administration will release its petroleum status report for the week ended August 8 at 10:30 am ET. The Treasury is set to announce the results of its 10-year note auction at 1 pm ET.

In corporate news, Jack Henry & Associates (JKHY) reported fourth quarter earnings that met estimates, while its revenues trailed expectations. ViaSat (VSAT) reported first quarter results that trailed expectations.

JDSU (JDUS) reported better than expected fourth quarter results, while it issued weak guidance for the first quarter. CREE (CREE) reported fourth quarter earnings that beat estimates, while its revenues trailed expectations. The company's first quarter guidance was weak.

Cisco Systems (CSCO), NetApp (NTAP) and (NTES) are among the companies due to release their quarterly results after the close of trading.

The major Asian markets closed on a mixed note, with the uninspiring lead from Wall Street overnight and some weak economic readings from the region hurting sentiment. The Australian, New Zealand and Singaporean markets declined, while most other major markets from the region ended higher, although the sentiment remained lackluster.

Notwithstanding weak Japanese GDP data, the nation's stocks received support from a weaker yen. Japan'sNikkei 225 ended up 52.32 points or 0.35% at 15,214. Meanwhile, Australia's All Ordinaries ended down 15.20 points or 0.28% at 5,508. Hong Kong'sHang Seng Index closed at 24,890, up 200.93 points or 0.81%, while China's Shanghai Composite Index closed 1.28 points or 0.06% higher at 2,223.

On the economic front, a report released by Japan'sCabinet Office showed that Japan's GDP contracted 1.7% sequentially in the first quarter and fell a steep 6.8% year-over-year, as consumer spending declined sharply. Nevertheless, the declines were slightly less than expected.

A few economic data released by China pointed towards softening of economic conditions. The Chinese National Statistical Office reported that retail sales in China rose at a slower rate of 12.2% year-over-year in July, trailing estimates for 12.5% growth. Industrial output rose 9%, also missing estimates for 9.1% growth. The increase in fixed asset investment in the January to July period was also a less than expected 17%. Meanwhile, data released by the People's Bank of China showed that aggregate financing, a broad measure of credit, declined notably to 273.1 billion yuan from 1.97 trillion yuan in June.

The results of a survey by Westpac and the Melbourne Institute showed that their consumer sentiment index for Australia rose 3.8% month-over-month to 98.5 in August from 94.9, although it remained below the no-change mark of 100.

European stocks opened higher and are seen holding their gains, as domestic traders digest some earnings and economic data.

In corporate news, Swiss Life reported higher first half earnings and also announced a deal to buy German real estate firm Corpus Sireo. Merck KgaA reported higher second quarter earnings and confirmed its outlook for the year. German steel firm Salzgitter reported better than expected second quarter earnings. German utility E.ON reported a decline in its profits for the first half, although earnings came in better than expected. Glencore Xstrat's own sourced copper production rose 13%.

On the economic front, revised estimates released by the German Federal Statistical Office showed that annual inflation slowed to 0.8% in July, in line with estimates. The inflation rate is the lowest since February 2010. Meanwhile, a separate report showed that German wholesale prices fell 0.7% year-over-year.

The UK Office for National Statistics reported that the jobless rate for the UK calculated based on the ILO standards came in at 6.4% for the three months ended June, edging down in line with estimates. Claimant count for July declined by 33,600 compared to the 30,000 drop expected by economists.

Eurozone industrial production declined for the second straight month in June, figures from Eurostat showed. Industrial output fell 0.3% in June from the previous month, much slower than May's 1.1% decline.

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Source: Alliance News

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