A pause in China’s manufacturing decline during May and two big possible deals in America’s tech and healthcare industries are setting US markets up for a higher open on Monday ahead of the ISM’s report on US manufacturing.
The major averages saw a sharp dip on Friday, marking the sixth time in a row that the last trading day of the month has closed down. In four of the last six months, the Dow Jones has finished higher the first day of the month, tipping the balance slightly in a favour of a recovery on Monday.
Altera Corporation (NASDAQ:ALTR) shares are expected to open higher on reports Intel (NASDAQ:INTC) is close to a deal to acquire the company for as much as $54 per share valuing the chip-maker at $17bn. Shares of Humana Inc (NYSE:HUM) shot 20% higher on Friday on speculation the company will receive a takeover bid from a rival in the managed healthcare industry such as Cigna or Aetna.
Following the downgrade to estimates of first quarter US growth last week, markets will be keen to get a more current reading on the health of the economy with the latest ISM manufacturing report. Expectations are for an increase to 52 from 51.5 in April. Following the stronger than expected April core CPI data, core PCE inflation is expected to remain more subdued holding at 1.3% growth year-over-year.
Apple shares (NASDAQ:AAPL) closed lower alongside the broader market on Friday but managed to hold above the key $130 level. According to research company Gartner, Apple is now the largest smartphone vendor in China. It overtook China-based Xiaomi to gain the top spot in China after iPhones flew off the shelves in the first quarter, with sales up 72.5%.
Futures suggest the:
S&P 500 will open 3 points higher at 2,110 with the
Dow Jones expected to open 48 points higher at 18,058 and the
Nasdaq 100 9 points higher at 4,517.
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