Current Futures: Dow +50.00, S&P +6.70, NASDAQ +10.00
European markets and U.S. futures surged higher during the overnight session, as the major European retailers posted better than expected results. S&P futures jumped as much as 9 points, or 1%, throughout the European session and managed to break above the 918.00 resistance area, indicating a positive start to Wall Street trade.
The market absorbs two very important releases that are likely to influence both the equity and the currency markets for the rest of the day. The ADP Non-Farm Payroll at 08:15 EDT is likely to show that the private employees shed 388K jobs from the economy in May, which would be the lowest read in the last sixth months. This could provide a strong push forward for the equity markets, TheLFB-Forex.com Trade Team notes. Then at 10:00 EDT the ISM Manufacturing numbers are released, and expect to show that the pace of contraction has slowed, albeit that growth is far from close.
The European markets opened and moved higher from the start, after the largest U.K. retailer, Marks & Spencer reported a much smaller decline in sales than forecast. Moreover, the retail company reported the smallest quarterly decline of the last 2 year. In additional, Carrefour, the largest European retailer announced that its profit dropped in the second quarter, but still the pace of decline is smaller than the market had anticipated.
In the German Dax, every company member of the index advanced on Wednesday. Financials were among the top gainers in the Dax index, as Commerzbank surged 13% on Wednesday. In the U.K. FTSE market, the same financial sector was among the worst performers of the day, having Lloyds down 0.50%. Lloyds together with RBS are under the investigation by the EU Commission, which might force each of the two banks to split into smaller groups because of the government sponsored bailouts.
Economic reports from the U.K. signaled that manufacturing activity, although still in contraction, reduced the rate of decline. The PMI report printed at 47.0, higher than the previous month’s 45.4 read, and also above analyst estimates for a print around 46.
The U.K. FTSE gained 59.39 points (1.40%) to 4,308.60, while the German Dax added 76.07 points (1.58%) to 4,884.71
Crude oil for July delivery was recently trading at $71.00 per barrel, higher by $1.00. The next target for oil would be the $73 area, the high reached on Tuesday.
Gold for July delivery was recently trading up by $4.50 to $932.00. The $935 and the $942 areas are the next major resistance point that gold would have to tackle
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