6:30 a.m.: A little Santa?
US stocks are expected to open higher on Wednesday, building on yesterday’s gains, with after-hours results from FedEx Corp and Nike Inc buoying weary investors still waiting for a pre-Christmas rally.
Futures for the Dow Jones Industrial Average (DJIA) were up 0.7% in premarket trading, while those for the broader S&P 500 index were 0.5% higher and contracts for the Nasdaq-100 were up 0.4%.
“Wall Street was up yesterday and futures markets are suggesting Wednesday will see more gains in early trading,” said James Hughes, chief market analyst at scopemarkets.com
Stocks of FedEx and Nike were in focus as investors weighed the impact of both companies’ recent results that included bright spots. Nike shares are up over 12% in premarket deals, while FedEx shares are up over 4%.
“Economic news remains thin on the ground and there was also that canary-in-the-coal-mine warning from FedEx last night after its earnings missed expectations in what many see as an alternative indicator of the pace of economic growth.
“It was far from a generally gloomy picture among companies, however, as FedEx earnings per share beat forecasts, while Nike, which also reported last night, saw shares surge as much as 12% on well-received earnings news. ‘ remarked Hughes.
Wall Street’s gains during Tuesday’s regular trading session broke four straight days of losses and brought some much-needed holiday cheer. However, concerns about the development of interest rates in the world’s largest economy continue to hold many investors back.
Last week, the US Federal Reserve raised interest rates by 50 basis points, signaling that its fight to contain inflation is not over despite the year-long wave of rate hikes. Investors worry that aggressive monetary tightening will push the US economy into a prolonged recession.
On the economic data front on Wednesday, US November home sales data, due out at 10am ET, is likely to draw some attention as it will show whether buyer confidence has been hurt by the Fed’s rate hikes.
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