After the long weekend, US markets are keen to make up for lost time and join the rally stock markets are enjoying worldwide.
Although Japan bucked the trend overnight, with the Nikkei 225 finishing 2.4% lower, Hong Kong and Shanghai put in a late surge to finish sharply higher, and European markets have taken up the baton this morning.
“This strong end to the session came despite China releasing worrying trade figures overnight which suggests either traders are banking on further stimulus measures from the People’s Bank of China or we’re seeing more government buying to support and stabilize the markets. The trade figures once again highlighted a worrying trend in China, which is attempting to [make the] transition from an investment dependent economy to one driven by the consumer,” said Craig Erlam, at forex trading firm OANDA.
Spread betting quotes suggest the Dow Jones average will open more than 300 points up from Friday’s closing value of 16,102, while the broader-based S&P 500, which closed at 1,921 on Friday, is pegged to open 37 points or so higher.
There is little in the way of economic data later today for investors to get their teeth into aside from consumer credit, so there may be some residual pontification on last Friday’s jobs data for August plus the inevitable speculation about next week’s Federal Reserve meeting, and the possibility – considered remote by many pundits – of a rate hike.
In pre-market trading, tech stocks Apple (NASDAQ:AAPL) and PayPal (NASDAQ:PYPL) were setting the early pace, while mining giant Freeport-McMoRan (NYSE:FCX) looks set to be lifted by improving sentiment on the Chinese economy.
Oil firms, by contrast, could be set to be left behind as crude oil futures are mixed, with West Texas Intermediate off 1.8% and the European benchmark Brent crude up 1.9%.
Fast moving consumer goods maker Procter & Gamble (NYSE:PG) was making headway in pre-market trading after SunTrust Robinson Humphrey upgraded the stock.
In mergers & acquisitions news, Corncordia Healthcare (NASDAQ:CXRX, TSE:CXR) has announced an agreed offer for Amdipharm Mercury. The cash plus stock offer values Amdipharm at $3.5bn.