Tuesday Morning Cheat Sheet: 3 Stories Moving Markets
Japan’s Nikkei fell 0.31 percent on Tuesday after soaring over 2 percent on Monday, with the yen trading at 93.56 to the dollar. The Hang Seng fell 1.02 percent, matching losses in Shanghai as investors grew concerned about possible measures on the mainland that could curb rising property prices. Meanwhile, the S&P/ASX 200 gained 0.36 percent, remaining above the psychologically-significant level of 5,000 as earnings continue to come in strong.
The economic malaise cast over Europe last week after preliminary data showed weak GDP growth across the region seems to be lifting. Germany’s DAX was up 1.06 percent, London’s FTSE 100 was up 0.49 percent, and the STOXX 50 was up 1.09 percent as New York headed toward its opening bell.
U.S. futures at 8:00 a.m.: DJIA: +0.11%, S&P 500: +0.17%, NASDAQ: +0.23%.
Here are three stories to keep an eye on:
1) The widely-watched ZEW Indicator of Economic Sentiment for Germany increased 16.7 points in February to stand at 48.2, well ahead of expectations for a reading for 35.0. The report confirms data released last week that showed a broad slowdown in business activity and economic growth, but the sharp increase in sentiment suggests that market participants are expecting the situation to improve, or at least not get any worse, over the next few months.
2) Japan’s Nikkei index sweat some value on Tuesday after climbing more than 2 percent on Monday. Investors are eager to participate in a Japanese economic recovery, but are also hesitant in the face of continuing uncertainty. Finance minister Taro Aso stayed the hands of some investors after playing down talk of foreign bond buying by the central bank.
The next critical step in the nation’s recovery effort is appointing a governor to the central bank, which will happen after Prime Minister Shinzo Abe gets back from a trip to the United States. Abe will reportedly be meeting with President Barack Obama to discuss the possibility of a free-trade agreement between the U.S. and Japan.
3) After seven straight weeks of gains for the S&P 500, investors will need significant catalysts to push the index beyond five-year highs, and this week is full of possible triggers. Today, the NAHB will release its housing market index, which is expected to increase slightly but still show overall pessimism. Tomorrow investors will digest housing start data and the producer price index, as well as weekly retail sales reports. Rounding out a battery of housing market data this week, existing home sales will be reported on Thursday.