A break higher in Oil prices enabled a late turnaround for markets on Monday and that momentum has been built on overnight with a rate cut in Australia and raised hopes of a resolution to the Greek debt negotiations helping US stocks head towards a higher open on Tuesday.
A higher oil price also aided Exxon Mobil Corporation (NYSE:XOM) shares to gain over 2% on Monday after the oil major reported a steep drop in earnings that exceeded expectations. If oil prices don’t spend too long sub-$50 per barrel in Q1 and the oil majors were able to weather the storm in Q4, it raises hopes that the worst for blue chip oil companies could be behind them.
Following dismal results from McDonald's Corporation (NYSE:MCD)’s that led to the departure of its CEO; up and coming rival Chipotle Mexican Grill Inc (NYSE:CMG) is going from strength to strength with expectations of rising top and bottom line earnings but a slight decrease in same-store sales. Chipotle’s commitment to organic fresh produce stands it front and centre in the growing “fast casual” restaurant sector.
Some commodities such as beef are close to multi-year highs and that increases Chipotle’s costs but so far though demand for Chipotle’s premium products has been inelastic to the passed-on higher prices. Chipotle shares have been resting above $700 since the beginning of the year and if earnings impress could be set to make the next leg higher in what has been a six-year uptrend.
UPS, Walt Disney and Gilead Sciences also report earnings on Tuesday while factory orders and vehicle sales data will be released.
Futures suggest the:
S&P 500 will open 5 points higher at 2,025 with the
Dow 30 expected to open 31 points higher at 17,393 and the
NASDAQ Composite 6 points higher at 4,194.
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