Wall Street has chosen to stay cautious, as reflected by the trading in the U.S. futures, which points to a slightly higher opening on Monday. Asian stocks closed mixed earlier in the global trading day, although the Chinese and Hong Kong markets rose sharply. At the same time, European stocks have got off to a weak start, with the French market underperforming the rest. The dithery mood is understandable, given the recent gains and the looming Greek risk. Crude oil is still lingering near its 4-month high and the dollar is firmer. In light of the paucity of any major economic and earnings news, the domestic markets may look ahead to several key events of the week, including the FOMC meeting.
At 6:15 am ET, the Dow futures are rising 5 points, the S&P 500 futures are moving up 2.25 points and the Nasdaq 100 futures are adding 7.50 points.
U.S. stocks reversed course in the week ended April 24th, with oil's extended rally, some positive earnings, especially from the tech space, Greek fears and mixed economic data charting the course of the markets during the week.
The April 29-30th FOMC meeting, private sector activity and consumer data are among the key economic data due for release in the unfolding week. Traders may closely watch the results of the Institute for Supply Management's national manufacturing and service sector surveys for April, the PMI reading based on Chicago area business barometer survey for April, final readings of Markit's manufacturing and service sector surveys, the results of separate consumer confidence surveys for March by the Conference Board and the University of Michigan, the Commerce Department's personal income and spending reports for March and jobless claims data.
Some Fed speeches scheduled post the FOMC decision, advance first quarter GDP estimate, auto sales for March and the National Association of Realtors' pending home sales index for March may also be in the spotlight. The results of some regional Federal Reserves' manufacturing surveys, the results of the S&P/Case-Shiller house price index for February, the Labor Department's employment cost index for the first quarter and the Commerce Department's construction spending report for March round up the economic events of the week.
Markit is set to publish its final U.S. service sector PMI for April at 9:45 am ET. Economists expect the PMI to improve to 59.5 from 59.2 in March, also up from the flash estimate of 58.6. The Dallas Federal Reserve is scheduled to release its manufacturing survey for March. Economists expect the index to improve to -12 in March from -17.4 in February. The Treasury is due to release the results of its auctions of 2-year notes at 1 pm ET.
In corporate news, Perfect World (PWRD) announced a deal to be acquired by a company run by its founder Michael Yufeng Chi in a going private transaction valued at about $20.20 cash per ADS. Windstream (WIND) announced that it has successfully completed the tax-free spin-off of select telecom network assets into Communications Sales and Leasing (CSAL), a publicly traded REIT.
Amkor (AMKR), Apple (AAPL), Barrick Gold (ABX), Boston Properties (BXP), C.H. Robinson (CHRW), Crane (CR), Everest Re (RE), General Growth Properties (GGP), Hartford Financial (HIG), J&J Snacks Food (JJSF), Owens & Minor (OMI), Partner Re (PRE), Plum Creek (PCL), PMC-Sierra (PMCS), Rent-A-Center (RCII), SWIFT Transportation (SWFT) and Waster Connections (WCN) are among the companies due to release their quarterly results after the close of trading.
The Asian markets closed mixed, with the Australian, Chinese, Hong Kong, New Zealand and Taiwanese markets advanced, while the Japanese, Indonesian, South Korean and Malaysian markets settled lower. Even as the positive close on Wall Street last Friday and oil holding near its recent high offered encouragement, traders remained wary ahead of some key economic data and central bank decisions.
The Japanese market ended lower amid subdued trading in the yen. The Nikkei 225 average languished below the unchanged line for much of the session before ending down 36.72 points or 0.18 percent at 19,983. Export stocks ended mostly lower, while financial and real estate stocks also came under selling pressure.
At the same time, the All Ordinaries of Australia hovered in positive territory throughout the session before closing 48 points or 0.81 percent higher at 5,955. Most sectors advanced, led by energy and material stocks, while IT stocks came under selling pressure.
Hong Kong's Hang Seng jumped 372.61 points or 1.33 percent before settling at 28,434 and China's Shanghai Composite Index soared 133.71 points or 3.04 percent before settling at a fresh 7-year high of 4,527.
On the economic front, a report released by the National Bureau of Statistics showed that profits of Chinese industrial enterprises fell 2.7 percent year-over-year in the three months ended March. Profits for March were down 0.4 percent.
After a strong start, European stocks reversed course and retreated sharply. The major averages in the region are currently lower, although the German and U.K. markets have trimmed most of the losses.
In corporate news, Cap Gemini announced a deal to acquire iGATE in a $4 billion deal. The companies expect the deal to close in the second half of 2015. Cap Gemini also raised its revenue growth guidance for 2015.
Deutsche Bank has revealed the outlines of a strategy overhaul, including plans to cut its ownership in the Postbank consumer unit and shrink the securities business. The actions are expected to result in annual cost savings of 3.5 billion euros and the company also lowered its return on equity to at least 10 percent from 12 percent.
On the economic front, German import prices continued to decline in March but the rate of decrease slowed for the second month, data from Destatis showed. Import prices fell by a less-than-expected 1.4 percent year-over-year in March, following a 3 percent drop in February. Prices were expected to fall 2 percent. Excluding crude oil and mineral oil products, import prices gained 1 percent on a monthly basis taking the annual growth to 2.3 percent.
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