U.S. stock index futures pointed to a higher open on Monday as a softer dollar helped boost commodity prices and, potentially, earnings of export oriented U.S. companies.
In a possible sign of healthier capital markets, private equity firm Blackstone Group (BX.N) is planning to list up to eight of its portfolio companies, according to a source who received a letter the firm sent to investors on Friday.
The U.S. dollar fell against a basket of major currencies .DXY, continuing its recent weakness that has helped bolster U.S. stocks by lifting commodity prices and increasing the dollar value of repatriated export earnings of U.S. companies.
The dollar is weaker again, so that trade is on and lifting commodity prices, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York. The futures are up, but gold is up so in non-dollar terms the market continues to run in place even though we keep getting nominal gains.
Boockvar said that Blackstone's initial public offering plans could be seen as a sign the market has dramatically healed but said the move could also be a sign prices are topping out as firms cash in on buoyant equity markets.
I would not be taking the other side of a Blackstone trade, he said.
S&P 500 futures SPc1 rose 7.1 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 added 61 points, and Nasdaq 100 futures NDc1 rose 9.75 points
Investors are looking ahead to a series of blue-chip earnings reports this week, beginning on Tuesday with Intel Corp (INTC.O) and Johnson & Johnson (JNJ.N) before other big names such as International Business Machines Corp (IBM.N), Goldman Sachs Group Inc (GS.N), General Electric Co (GE.N) and Google Inc (GOOG.O) later in the week.
It's going to be a market searching for direction this morning but will have plenty of things to react to as the week goes on, said Arthur Hogan, chief market analyst at Jefferies & Co in New York.
Hogan also pointed to a plethora of economic data in the week ahead, including retail sales and consumer sentiment.
On Nasdaq, Google edged up about 1 percent to $523 in premarket trade. Thomas Weisel raised its price target on the stock to $620 from $530 with an overweight rating.
Crude oil CLc1 pushed higher above $73 a barrel, extending last week's gains, helped by growing optimism about the pace of the global economic recovery and a positive demand forecast from the International Energy Agency.
U.S. stocks rose every day last week in their best weekly run in three months, and Dow industrials reached a new 2009 closing high on Friday as companies prepare to present their quarterly scorecards.