Bank stocks rise in Europe and Asia on the new Basel III agreement. Investors will be watching economic reports for clues on where stocks are headed this week.
Market Preview
Asian markets are higher today. Hong Kong’s Hang Seng index jumped 1.9 percent. Japan’s Nikkei 225 was up 0.9 percent and China’s Shanghai Shenzen rose by 1 percent.
European shares are doing well this morning, with the German DAX rising 1 percent. Britain’s Footsie 100 was up by 1.1 percent in mid-day trading.
U.S. S&P 500 index futures were up 0.9 percent in pre-market action.
Crude oil is higher on Monday morning, trading just above $77 a barrel.
Spot gold was flat in Tuesday morning trading, hovering around $1,242 an ounce.
Economic Preview
Economic reports will likely dominate investor attention this week given so few companies will be reporting earnings this week.
retail sales for August will be released on Tuesday and are expected to have increased by 0.2 percent, down from a 0.4 percent increase in July.
On Wednesday, industrial production will be released and is expected to have increased by 0.4 percent after a 1 percent increase in July. Capacity utilization will also be reported along with industrial production. Overall capacity utilization is expected to rise to 75 percent, roughly flat from July’s reading of 74.8 percent.
On Thursday, initial jobless claims will be released with expectations for 455,000 new unemployment claims for the week of September 11th.
Producer price index data will also come out on Thursday. Analysts are expecting August producer prices to have risen 0.3 percent.
Basel III Agreement
The Bank of International Settlements announced Basel III, with new capital requirements for international banking. The BIS will instruct banks to hold tier 1 capital equal to 7 percent of risk-bearing assets. Critics are concerned that the more stringent capital requirements come too late and have too long a lead-in time.
Bank stocks in Europe and Asia were up the Basel III news and the Financial Sector SPDR ETF (XLF) was up 1.4 percent in premarket trading.
Earnings Preview
On the earnings front, fewer than 50 companies will be reporting this week.
Best Buy (BBY) will post earnings on Tuesday before the market opens. The company is expected to post 45 cents earnings per share.
The Kroger Company (KR) will also report on Tuesday before the market opens with analysts expecting 36 cents profit per share.
On Thursday before the open, FedEx (FDX) will release earnings. The consensus number is $1.24 per share.
Oracle (ORCL) will report on Thursday at the closing bell, with analysts expecting 36 cents per share in profits.
And Research in Motion (RIMM) is scheduled to report on Thursday at the close, with the street looking for earnings per share of $1.35.
