Futures flat after weak Japanese economic data

Stock index futures were flat on Monday after a six-day winning streak for the S&P 500 as investors weighed expectations for more central bank stimulus after Japan showed economic weakness.

Stock index futures were flat on Monday after a six-day winning streak for the S&P 500 as investors weighed expectations for more central bank stimulus after Japan showed economic weakness.

As traders speculated the market was pausing from its rally, data showed Japan’s economy expanded just 0.3 percent in April-June, half the pace expected, raising doubts about the strength of the recovery. Meanwhile, Europe’s debt crisis weighed on worldwide demand.

Global economic weakness has kept alive investors’ hopes for stimulus actions from central banks.

Late on Friday, the president of the San Francisco Federal Reserve said the Fed should launch a fresh round of bond buying to lower the U.S. unemployment rate more quickly, fuelling speculation that the central bank could soon unveil a new round of quantitative easing.

The benchmark S&P index has risen 2.99 percent over the past six sessions, its longest rally since December 2010, but the index has risen only 0.3 percent in the past three sessions as the S&P hovers near levels not seen since early May.

“The market has had a small, positive consolidation just above the key 1,400 level, with no clear theme in either direction. The market is biding time,” said Andre Bakhos, director of market analytics at Lek Securities in New York.

“With no economic data scheduled today, investors will look to the rest of a busy week for more direction.”

S&P 500 futures were up 0.5 point and were roughly even with 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 were unchanged and Nasdaq 100 futures added 3.5 points.

Swiss private bank Julius Baer (BAER.VX) is to buy Bank of America’s (BAC.N) Merrill Lynch wealth manager outside the United States, paying 860 million Swiss francs ($882 million) for the loss-making business to boost its assets managed by 40 percent and backing the deal with plans to raise 1.19 billion Swiss francs ($1.22 billion) in new capital. Bank of America shares gained 0.8 percent to $7.80 in premarket trading.

Reuters

 

Have Your SayLeave a comment