Current Futures: Dow +4.00, S&P -0.60, NASDAQ -7.00

European markets gained ground from the first minutes of trading on Thursday morning, while Asian markets closed the trading session in positive territory. The S&P futures are currently trading near the break-even line, recovering some of the losses seen earlier in the day.

Equity markets look confident ahead of the stress test results, which are expected to be officially released today. In the last few weeks, the press has published a number of possible results but they were inconsistent. Even now, shortly before the release of the official results, numbers vary between news agencies.

Despite this, investors saw the positive side of the story, since the capital requirements that have been reported are not as large as the market had initially expected. Furthermore, some banks including Citibank have already announced plans to convert the government’s preferred shares to common shares, to reduce the amount the bank would have to raise from the money markets. Trade Team notes that this solution would dilute the current shareholders.

Since investors are speculating the worst is over for the financials, the banking sector has posted strong gains over the last few trading sessions. However, not all European banks rallied this morning. The U.K. bank, Lloyds, dropped almost 10% this morning, after saying it will record a pre-tax loss this year. On the other hand, Barclays rose 4%, after announcing a profitable first quarter. On the German Dax, the auto industry posted significant gains after the merger of VW and Porsche was announced. 

Overnight, the Japanese Nikkei surged 408.33 points (4.55%) to 9,385.70. The Australian S&P/Asx gained 71.60 points (1.85%) to 3,938.70. The U.K. Ftse added 61.83 points (1.41%) to 4,458.32, while the German Dax rose 52.18 points (1.07%) to 4,932.89

Crude oil for May delivery was recently trading at $56.95 per barrel, up $0.60.

Gold for May delivery was recently trading higher by $1.80 to $912.80.