The steep sell-off in the government bond market across Europe and the US sent shivers through equities on Tuesday but stronger service sector data in China and Europe is aiding a recovery on Wednesday with US stocks expected to open higher.
Possible M&A in the tech sector with Microsoft mulling a bid for Salesforce is a positive for market sentiment that has been dented recently by uncertainty surrounding the timing of the Fed’s lift-off from zero-interest rate policy.
Microsoft would look to leverage Salesforce’s success in the cloud-computing space to further its own push in that direction, including its core products like Microsoft Office. Consumers are increasingly looking to pay monthly for software loaded onto the cloud rather than pay a lump sum for something that’s downloaded, and Microsoft want in on a company that’s done it successfully.
Groupon shares are expected to open lower after the company missed revenue estimates and issued a weak sales forecast for the second quarter. The company saw customers and gross billings increase by 7% but it is yet to turn a profit.
Herbalife (NYSE:HLF) shares are expected to jump significantly higher on the open after the company cited lower expenses as a reason to raise its 2015 guidance while it beat first quarter profit and sales estimates.
Tesla reports after the close on Wednesday. The company has recently expanded its horizons into solar-powered batteries for homes and businesses but the direction of shares in the days to come will be dependent on the outlook for its core electric cars business. The company is expected to make a loss but shares can still push higher if the company maintains or expands its guidance on vehicle sales this year.
There is considerable excitement over Tesla’s new ‘SUV crossover’ Model X, its production can’t be delayed because it is factored into the annual sales target. Sales in China were a sore point in Q4 of 2014 so after a management shake-up, CEO and founder Elon Musk will be keen to demonstrate some improvement in what could be Tesla’s biggest market.
ADP employment is reported at 1.15pm BST
More earnings are expected from AB InBev, GSK, Wendy’s, Chesapeake Energy before the open with 21st Century Fox, Wholefoods and MetLife reporting after the closing bell.
Futures suggest the:
S&P 500 will open 6 points higher at 2,095 with the
Dow 30 expected to open 49 points higher at 17,977 and the
Nasdaq 100 9 points higher at 4,418.
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