Sentiment Cautious Ahead Of Flurry Of Data

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Tuesday, with sentiment remaining guarded despite the release of a report showing fairly positive durable goods orders data. M&A news, including one announced in the cable TV space, could lent support to the markets. The dollar is gaining ground, while commodities are coming under selling pressure. The mood across the Atlantic is mixed. The domestic markets may now turn their attention to a slew of economic numbers on house prices, new home sales and consumer confidence for trading cues.

U.S. stocks ended mixed in the week ended May 22nd, with the mood largely lackluster throughout the week as traders reacted to mixed economic data and earnings and volatility in the bond market.

Last Monday, the major averages rose, helped by hopes of a continued easy monetary policy environment in the wake of weak homebuilder sentiment data. Under the impact of multiple catalysts, including strong housing starts data, mixed retail earnings, the dollar's rally and an increase in bond yields, the major averages experienced lackluster sentiment on Tuesday before ending mixed. A mixed message relayed by the FOMC minutes led to another mixed performance on Wednesday.

Amid a retreat in bond yields and mixed economic data, the major averages closed Thursday's session higher. However, with consumer price inflation coming in stronger than expected, the major averages suffered on Friday due to expectations that monetary policy normalization may begin sooner than thought.

For the week, the Dow Industrials fell 0.22 percent, while the S&P 500 Index and the Nasdaq Composite added 0.16 percent and 0.81 percent, respectively.

Among the sectors, the NYSE Arca Biotechnology Index rallied 3.03 percent for the week, while the NYSE Arca Broker/Dealer Index, the KBW Bank Index and the Philadelphia Semiconductor Index all ended up over 1 percent each.

On the other hand, the NYSE Arca Airline Index and the NYSE Arca Gold Bugs Index tumbled 6.56 percent and 5.51 percent, respectively and the Dow Jones Transportation fell 2.29 percent.

Currency, Commodity Markets

Crude oil futures are slipping $0.77 to $58.95 a barrel after edging up $0.03 to $59.72 a barrel in the week ended May 22nd.

Last Monday, oil declined modestly, reversing some of the preceding week's gains. The commodity pulled back sharply on Tuesday, dropping over $2-a-barrel. However, oil rebounded on Wednesday, rallying close to a dollar per barrel.

After advancing by close to $1.75-a-barrel on Thursday, oil fell by $1-a-barrel on Friday amid the dollar's strength, thus ending the roller-coaster week little changed.

Gold futures, which fell $21.30 or 1.74 percent to $1,204 an ounce in the previous week, are currently sliding $15.90 to $1188.10 an ounce.

Among currencies, the U.S. dollar advanced against most currencies in the week ended May 22nd on U.S. rate hike hopes. The greenback added 1.94 percent against the yen before ending the week at 121.56 yen. The euro suffered a backlash, plunging 4.13 percent against the dollar on expectations of monetary policy divergence between the central banks of the U.S. and the eurozone.

The dollar is currently trading at 122.98 yen and is valued at $1.0911 versus the euro.

Asia

Most of the major Asian markets advanced on Tuesday, with the Chinese, Hong Kong and Australian markets rising notably, although the South Korean, Malaysian and Indian markets retreated.

Australia's All Ordinaries Index opened higher and advanced steadily in the morning before moving roughly sideways and ending up 50.50 points or 0.88 percent at 5,770.

The market witnessed broad based strength, with utility, real estate, financial and consumer discretionary stocks seeing notable strength.

Japan's Nikkei 225 average saw volatility throughout the session despite the yen's weakness. The index ended up merely 23.71 points or 0.12 percent at 20,438. Financial, utility, food, pharma and retail stocks came under intense selling pressure.

Hong Kong's Hang Seng Index added 257.03 points or 0.92 percent before ending at 28,250 and China's Shanghai Composite Index closed 97.10 points or 2.02 percent higher at a fresh 7-year high of 4,911.

On the economic front, the Bank of Japan reported that corporate service prices in Japan rose 0.7 percent year-over-year in April, ahead of the 0.6 percent growth expected by economists. On a monthly basis, prices edged down 0.1 percent following a 0.5 percent increase in March.

Europe

After some indecisiveness in early trading, European stocks fell sharply in early trading, as Greek fears continued to haunt traders. The averages have trimmed their early losses and are currently mixed.

The Greek drama is going through many twists and turns, with the Greek government blaming the intransigent stance of creditors in forcing the nation adopt more austerity measures for the deadlock in debt talks.

Greece and its creditors are at loggerheads over several issues, including budget targets, sales tax, pension and labor market rules. The impasse has proved detrimental for the economic health of the nation, as liquidity concerns emerge as an offshoot of the debt crisis.

In corporate news, Ryanair reported a strong increase in its earnings for the full year, helped by cost controls and 11 percent traffic growth.

U.S. Economic Reports

The unfolding holiday-shortened week's economic calendar is heavily loaded with some market moving reports.

Traders may closely watch the Commerce Department's durable goods orders report for April, the results of two separate consumer confidence surveys for May by the Conference Board and the University of Michigan, the Commerce Department's new home sales report for April, the National Association of Realtors' pending home sales index for April, the weekly jobless claims report, the results of MNI Indicators' survey on business activity in the Chicago region and some Fed speeches scheduled for the week.

The results of two separate house price surveys for March, the results of a couple of regional manufacturing surveys, the Commerce Department's second first quarter GDP estimate and the results of Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.

Largely reflecting a pullback in orders for transportation equipment, the Commerce Department released a report showing a modest decrease in new orders for U.S. manufactured durable goods in the month of April.

The report said durable goods orders dipped by 0.5 percent in April after surging up by a revised 5.1 percent in March. The drop in orders came in line with economist estimates, while the increase in the previous month was upwardly revised from the originally reported 4.0 percent jump.

Excluding the decrease in orders for transportation equipment, durable goods orders rose by 0.5 percent in April compared to a revised 0.6 percent increase in March. Economists had expected ex-transportation orders to edge up by 0.3 percent compared to the 0.2 percent drop originally reported for the previous month.

S&P/Case-Shiller will release their house price index for March at 9 am ET. The 20-city composite house price index is expected to have increased a seasonally adjusted 0.9 percent month-over-month, the same pace of growth as in the previous month. Annually, house prices may have increased an unadjusted 4.6 percent, faster than the 5 percent increase in February.

The Federal House Finance Agency is also due to release its house price index for March around the same time. The house price index is expected to increase to 0.7 percent month-over-month.

Markit is set to release the flash estimate of its U.S. service sector PMI for May at 9:45 am ET. The consensus estimate calls for a decline in the index to 56.5 from 57.8 in the previous month.

The Commerce Department is scheduled to release its new home sales report for April at 10 am ET. Economists expect new home sales to come in at a seasonally adjusted annual rate of 509,000 units.

New home sales came in at a seasonally adjusted annual rate of 481,000 in March compared to a 543,000 million-unit rate in February. Economists expected a rate of 518,000 for the month. New home inventories rose by 4,000 to 213,000 and inventories measured in terms of months of sales rose to 5.3 months from 4.6 months. The median price of a new home fell 1.7 percent year-over-year.

Around the same time, the Conference Board is due to release the results of its U.S. consumer confidence survey for May. The consumer confidence index based on the survey is expected to stay little changed at 95.1.

The consumer confidence index fell sharply to 95.2 in April from 101.3 in March. Economists expected an increase in the index to 103. The expectations index dropped 8.5 points to 87.5, the weakest reading since September 2014, and the present situation index slipped 2.7 points to 106.8.

The Richmond Federal Reserve will release its regional manufacturing PMI for May at 10 am ET. The consensus estimate calls for an increase in the index to 1 in May from -3 in April.

The business activity index based on the Dallas Federal Reserve's manufacturing survey due at 10:30 am ET is expected to improve to -10 in May from -16 in April.

Federal Reserve Vice Chair Stanley Fischer is due to speak on the Fed and the global economy in Tel Aviv at 12:30 pm ET. Richmond Federal Reserve Bank President Jeffrey Lacker will speak on financial stability in Baton Rouge, LA at 7:10 pm ET.

The Treasury Department is scheduled to announce the results of its auction of 2-year notes at 1 pm ET.

Stocks in Focus

Charter Communications (CHTR) announced a deal to buy Time Warner Cable (TWC) for $78.7 billion in cash and stock. Each of Time Warner shares would be exchanged for $100 in cash and 0.5409 shares of Charter. Liberty Interactive (LINTA) announced an agreement with Liberty Broadband Corp. (LBRDA), which provides for the former investing $2.4 billion in the latter in connection with the proposed acquisition of Time Warner Cable by Charter.

EMC Corp. (EMC) announced an agreement to buy managed cloud services business provider Virtustream for $1.2 billion in cash.

AutoZone (AZO) reported better than expected third quarter earnings, while its revenues were shy of estimates.