A recovery in global risk-assets thanks to a bounce back in Chinese equities is setting up US markets for a strong open on Thursday.
Markets in China had gotten heavily oversold in the past few days so the latest set of government measures including banning large shareholders from selling their shares for six months has helped trigger a bounce. The move higher in Shanghai has, temporarily at least, reduced fear of contagion into other markets.
The minutes from the latest Federal Reserve meeting didn’t reveal any huge surprises. The general theme was one of acknowledging the improvement in the US economy while saying more data is needed to confirm that policy objectives will be met.
Blackberry (TO:BB) may be in play on Thursday as investors digest the latest strategy shift. The mobile phone-maker and enterprise software developer is said to be planning a launch of Android-based handsets that will also contain some of the prominent features of the Blackberry OS such as BSM.
Shares of Alibaba (NYSE:BABA) have been crushed in the last month, losing as much as 15% as investors in the US reduced exposure to China. Alibaba shares could see an abrupt recovery on Thursday with shares in Shanghai gaining as much as 5%, helped by rumours the company is preparing to invest $100m in Mei.com.
Alcoa (NYSE:AA) missed earnings estimates on the top and bottom line afterhours on Wednesday but given the 5% decline seen during the day, shares are expected to see a modest recovery on Thursday’s open.
On Thursday second quarter earnings are expected to be released from Walgreens Boots Alliance Inc (NYSE:WBA), PepsiCo (NYSE:PEP) and PriceSmart (NASDAQ:PSMT).
Futures suggest the:
S&P 500 will open 15 points higher at 2,061 with the
Dow Jones expected to open 124 points higher at 17,639 and the
Nasdaq 100 37 points higher at 4,388.
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