LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.08% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down 0.12%. CNN’s Fear & Greed Index return to neutral yesterday, reflecting investors’ current mixed attitudes to the market.
European markets made modest gains this morning, after new figures showed that the eurozone’s 18-month double-dip recession has ended with GDP growth of 0.3% during the second quarter, beating expectations for 0.2% growth. The region’s two largest economies, Germany and France, grew by 0.7% and 0.5% respectively, meaning that France has also escaped from its recession, although the French unemployment rate remained at a record high of 11%, raising some doubts over the solidity of its recovery. At 7am ET, the FTSE 100 was up 0.05%, the DAX was up 0.12% and the CAC 40 was up 0.29%.
In the US today, July’s producer price index is due at 8.30am, and is expected to show that producer prices rose by 0.3% during July, after gaining 0.8% during June. The likely outcome of the Federal Reserve’s September meeting may also be in focus, after Atlanta Fed President Dennis Lockhart said that bond-buying might reduce from September, but that this should be a “cautious first step”, as economic data remained too mixed to commit to a fixed plan.
Companies due to report earnings before the open today include Applied Industrial Technologies, which reported full-year earnings of $2.78 per share on sales of $2.5bn. Retailer Macy’s is expected to report second-quarter earnings of $0.78 per share on revenue of $6.3bn, while Deere is expected to report fiscal third-quarter earnings of $2.17 per share, on revenue of $9.2bn. Cisco Systems is scheduled to report after markets close tonight, and consensus forecasts are suggesting that the networking equipment manufacturer will report earnings of $0.51 per share on revenue of $12.4bn.
Other stocks that may be actively traded include Apple, which rose by 4.8% yesterday, after activist investor Carl Icahn disclosed a sizeable stake in the company. Apple shares were up by a further 1.2% in pre-market trading this morning. Cree, which reported earnings yesterday, fell by 15% in pre-market trading this morning as investors digested the LED manufacturer’s downgraded earnings forecasts.
Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.“
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> Roland does not own shares in any of the companies mentioned in this article.
