LONDON (Alliance News) - US stocks are set to open quietly Tuesday as another sparse economic data calendar provides little to drive investor sentiment one way or the other. The DJIA and the S&P 500 both reached all-time highs one week ago, but since then, the US corporate earnings season has mostly come to an end and the data calendar has been much lighter, leaving equity markets consolidating just beneath those highs.
After making modest gains on Monday, futures trading indicates that the DJIA, the S&P 500, and the Nasdaq Composite will all open just fractionally higher Tuesday.
"These moves follow a fairly quiet start to the week, which has left the markets lacking any real direction," sys Alpari market analyst Craig Erlam.
Some of the the corporate news that has been released has been less than helpful, with Credit Suisse pleading guilty to helping its US clients evade tax and accepting a fine of USD2.6 billion - the highest ever for a criminal tax case, according to the US Department of Justice.
"Results from Credit Suisse next quarter will take on addition significance," says CMC Markets market analyst Jasper Lawler. "If clients are seen to be leaving, this may set the precedent for clients of all global banks to head to the exits and seek out boutique firms to manage their wealth instead."
Given that the profitability of global banks is under an ever tighter squeeze, as regulators impose increased controls and higher capital ratios, which has already led to a huge reduction in investment banking activity, the loss of any wealth management business on top of that would be another blow, the analyst says.
Retail chain Urban Outfitters is down nearly 4% in the pre-market after adding itself to the list of retailers that has missed analysts sales expectations. After the world's biggest retailer Wal-Mart led US markets back down from their highs last week, citing the harsh winter weather as a reason for poor sales growth, Urban Outfitters said sales in its last quarter rose 6% to USD906 million, missing expectations of USD928 million.
Back in the UK, the leading index continues to underperform, weighed down by some of it's biggest names, including Vodafone, while the FTSE 250 continues to recover somewhat from the heavy sell-off it suffered towards the end of last week.
Ahead of the US market open, the FTSE 100 is down 0.5% at 6,810.82, while the FTSE 250 is up 0.5% at 15,453.82, and the AIM All-Share is just fractionally lower at USD791.24.
The UK inflation already released Tuesday was the major economic focus. It showed consumer prices rising at 1.8% per year, up from 1.6% last month and outpacing expectations of 1.7%. The reading has had little market effect, however, with equities showing no interest and the pound having returned to near-flat on the day against the dollar after exhibiting an initial spike. Having peaked at USD1.6865, the pound has retraced to USD1.6825.
There are two US Federal Reserve officials speaking during the US session who may provide some interest. US Philadelphia Fed President Charles Plosser speaks at 1630 GMT, followed by New York Fed President William Dudley at 1700 GMT.
UK Monetary Policy Committee member Charlie Bean is also due to talk after the UK market close at 1730 GMT.
As the markets begin to look for the first dissenter from the Bank of England and clues as to the timing of the first interest rate rise, Bean's comments may be interesting. All of the afternoon speakers are somewhat overshadowed, however, by Wednesday's schedule, which brings the release of the latest UK and US central bank meeting minutes, and a speech from the US Fed Chair Janet Yellen.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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