Strong economic data from China that bodes well for global growth is setting US stocks up for a tentatively higher open on Wednesday ahead of testimony from Federal Reserve Chair Janet Yellen before lawmakers.
In the light of the disappointing retail sales data seen on Tuesday, not to mention an apparent loss of momentum in the labour market in June, there is a chance Ms Yellen may use her testimony to emphasise the risks of raising rates too early. Most likely though, any mention of a slowdown in the US economy would be tempered by signalling the Fed still expects a rate hike this year.
Before the Fed Chair’s testimony, producer price inflation and industrial production data for June will be released, both of which are expected to see some improvement. Later there will be speeches from FOMC members Mester and Williams as well as the release of the Fed’s beige book.
Shares of Twitter (NYSE:TWTR) got a sudden boost on Tuesday on rumours the company is considering a takeover approach but soon came off their highs as it became apparent that the news story was a hoax. Sentiment has been beginning to lift towards Twitter following the departure of CEO dick Costello and Google (NASDAQ:GOOGL) has long been seen as one of the main contenders a possible bidder, so the hoax hit right on the nerve.
Shares of KFC and Pizza Hut-owner Yum! Brands Inc (NYSE:YUM) are expected to drop on Wednesday’s open after the company reported better than expected profits but missed on revenues. The company continues to battle against lower sales in China following its food contamination scandal.
Bank of America (NYSE:BAC), Delta Airlines (NYSE:DAL), US Bancorp (NYSE:USB) and Blackrock (NYSE:BLK) are to release quarterly earnings before the open on Wednesday with Netflix (NASDAQ:NFLX) and Intel (NASDAQ:INTC) set to report after the closing bell.
Futures suggest the:
S&P 500 will open 2points higher at 2,110 with the
Dow Jones expected to open 11 points higher at 18,064 and the
Nasdaq 100 10 points higher at 4,533.
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