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Yellen And Earnings-Watch To Give US Markets A Mixed Start

Published 24/02/2015, 13:28

On Tuesday US stocks look to open mixed with a little caution being exercised ahead of testimony from Fed Chair Janet Yellen and numerous prominent corporate earnings reports with Dow-component Home Depot Inc (NYSE:HD) already having beaten estimates and reported an $18bn share buy-back.

Energy and banking shares were hugging the bottom of the Dow Jones industrial Average yesterday with oil prices down again and HSBC Holdings Plc (LONDON:HSBA) reporting disappointing earnings.

News of more oil coming online from the Middle East and Africa added to concerns of over-supply given the backdrop of rising inventories in the US and sent WTI crude oil back down towards $48 after having recently been as high as $54.

Deliberations within the EU over the last-minute submittal of the list of suggested reforms from Athens as conditions to Greece’s bailout extension have the potential to rock the boat in Tuesday’s trading. The list appears to have been accepted as a basis for further negotiations, but the details in the next set of negotiations have plenty of scope for disagreement. Even if there is agreement between Greece and its creditors; there is potential for political fallout in Greece if the public begins to feel the new government has given in to its ‘bailout masters’.

The main focus will be on any suggestions made by Federal Reserve Chair Janet Yellen in her testimony to the Senate Banking Committee over the timing of the first interest rate hike.

The latest set of Fed minutes were more dovish than expected and gave some pause to the rally in the dx and a little extra lift to American stock markets. Since then, the US dollar has regained some form in the days leading up to Yellen’s testimony while US stocks have continued into higher territory.

Minutes by their nature are more two-sided than the official statement because they reflect the discussions taking place rather than the agreed upon public message on the direction of policy. It would make sense for Janet Yellen to be consistent with the Fed’s agreed-upon public message which is more hawkish rather than the minutes.

Conference Board consumer confidence data is expected to show a modest drop to 99.6 in February from 102.9 last month.

Earnings are also expected from Comcast, Macy’s, Domino’s Pizza and Office Depot on Tuesday with HP and Lendingclub reporting after the close.

Futures suggest the:

S&P 500 will open unchanged at 2,109 with the

Dow Jones expected to open 4 point higher at 18,113 and the

Nasdaq 100 4 points lower at 4,445.

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