Current Futures: Dow +27.00, S&P +2.10, NASDAQ +0.30
European markets opened higher, after the major indexes in the Asian region traded mixed. U.S. futures traded flat in the early overnight session, but rose after the London open.
A statement released yesterday by Bank of America showed that the bank raised $13.5 billion by selling 1.25 billion of common shares. The average price was $10.77, compared with $11.25 at which the bank’s shares closed on Tuesday. In 2009, the shares of Bank of America fell approximately 20%, underperforming the S&P 500.
TheLFB-Forex.com Trade Team notes that these funds will be used to cover the $33.9 deficit on the bank’s balance sheets, as the stress test results revealed. However, the share offering can be seen as a success, since Bank of America was able to raise a huge quantity of cash, even though it was the bank most affected by the credit crisis. Many investors will interpret this as a very positive sign of market stability.
The World Bank has issued a warning that hopes of a possible recovery of the Chinese economy might be “premature”. The main reason cited is that private investment is still lagging, being at very low levels compared with the levels seen just a few quarters ago. Additionally, the vast majority of capital that flowed into the Chinese economy came from the huge stimulus bill ran by the government, coupled with a very aggressive credit strategy initiated by the People’s Bank of China. TheLFB-Forex.com Trade Team notes that, China is the only country that still shows signs of economic development, being responsible for the surge in commodities seen in the last few months.
Overnight, the Japanese Nikkei rose 54.35 points (0.59%) to 9,344.64. The Australian S&P/Asx fell 7.30 points (0.19%) to 3,824.60. The U.K. Ftse added 2.75 points (0.06%) to 4,479.50, while the German Dax rose 19.53 points (0.39%) to 4,979.15.
Crude oil for June delivery was recently trading at $60.10 per barrel, higher by $0.15.
Gold for June delivery was recently trading higher by $1.30 to $928.00
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