In what has been a volatile first quarter, yesterday’s sharp rebound following a week of declines was not out of character. The Dow and S&P 500 are just about up for 2015 but most of that gain was thanks to the moves yesterday and just a few days ago they were lower on the year. The Nasdaq and Russell 2000 are doing better, both up over 4% in the quarter with tech and biotech stocks in high demand.
The healthcare sector led by biotechs has been the strongest performer this year but going into earnings season, there are already some signs of rotation out of highly-valued names into more conservative sectors such as utilities. When these tech/biotech companies with high valuations miss expectations, the results can be severe so some investors will be opting to get out whiles the going’s good.
Last-ditch talks between Iran and six leading global powers over its nuclear program are hurting oil prices on Tuesday and that is already starting to weigh on US equities with futures markets pointing to a lower open.
There is some important economic data on Tuesday beginning the lead up to non-farm payrolls on Friday. Case-Shiller home prices are released at 2pm BST followed by the Chicago PMI at 2.45pm BST and consumer confidence at 3pm BST.
Share of Teck Resources Ltd (NYSE:TCK) are expected to tumble on the open after the mining firm denied reports of a merger with FTSE 100-listed Antofagasta (LONDON:ANTO).
Futures suggest the:
S&P 500 will open 10 points lower at 2,076 with the
Dow Jones expected to open 73 points lower at 17,903 and the
Nasdaq 100 15 point lower at 4,367.
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