US stocks are set to rise on the first day of the new quarter. The widely anticipated Greek default to the IMF had already been priced in on Monday. Markets are now looking for instruction from manufacturing and employment data released on Wednesday.
US equity index futures rallied mid-morning on Wednesday on a report that Greece may be willing to accept most of the creditor’s conditions for a bailout. Markets are essentially using the Greek report as an excuse for a relief rally. Accepting “most conditions” is a long stretch from accepting all changes. With the IMF payment missed and the referendum looming on Sunday, a deal is unlikely to be struck this week.
From a US investment standpoint, Greece has missed its payment but negotiations keep marching on, it’s the beginning of a new quarter and funds are being put to work ahead of earnings season.
There is still the big question mark over the timing of the first Fed rate hike, although economists believe in September, markets are pricing in later. The recent dip in US stock markets has not only coincided with turmoil in Greece, but also with generally more positive US economic data that implies an earlier rate-hike. Just like on Tuesday with the better consumer confidence data, well-received data on Wednesday could see some of the early gains undone.
The ADP report on private sector employment is due at 1.15pm BST and expected to show 218K jobs created, up from 201K previously. The June ISM manufacturing PMI report is expected to show a 0.4 increase to 53.2 from 52.8 in May.
Futures suggest the:
S&P 500 will open 17points higher at 2,080 with the
Dow Jones expected to open 147 points higher at 17,766 and the
Nasdaq 100 43 point higher at 4,439.
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