US stocks are looking through the latest developments in Greece and China with a strong rebound expected at the market open on Tuesday.
Futures markets had indicated huge losses early on Monday but this never came to pass in cash markets, which ended the day slightly lower. Negotiations between Greece and its creditors are set to start up again on Tuesday. Until there’s a final resolution on Greece, US stocks should remain fairly insulated with the focus switching to Fed minutes this week and the beginning of earnings season.
A sharp drop in the price of crude oil on Monday hit the energy sector of US stock markets. Energy shares should stabilise on Tuesday since the price of oil has recouped some of the previous session’s losses. Pressure still remains to the downside for oil prices. Oil demand from China could decline further if the current stock market rout spreads to the rest of the economy, while a Greek exit could affect demand for oil from Europe. The US seems determined to reach a nuclear deal with Iran which will open up supplies there while US production has started edge up in the last week, helped by a rise in the number of oil rigs.
Shares of Advanced Micro Devices Inc (NASDAQ:AMD), maker of the AMD computer chips are expected to see heavy losses on the open of trading on Tuesday after the company lowered its revenue forecast for the second quarter.
US trade balance figures are expected on Tuesday with consensus expectations calling for a larger deficit of -42.8bn in June from -$40.9bn in May.
Futures suggest the:
S&P 500 will open 14 points higher at 2,082 with the
Dow Jones expected to open 98 points higher at 17,781 and the
Nasdaq 100 30 point higher at 4,448.
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