Dow Futures Edge Higher Ahead Of Debt Talks And Bank Earnings

Stock index futures suggest that the Dow Jones and S&P 500 may open modestly higher this morning, as investors await further news, after yesterday’s relief rally lifted US markets by more than 2%.

Roland Head

Roland is an experienced investment writer and analyst with a particular focus on dividend investing and value opportunities. He's been writing for the Motley Fool since 2012 and also contributes to other UK investor platforms, such as Stockopedia. Roland holds the CFA UK Investment Management Certificate (IMC) and has passed the CFA Level 1 exam. A keen private investor, he also runs an internet business.

Published 11 October, 2013 12:23 pm BST

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up 0.13% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open up by one point, as investors reserve judgement on a debt ceiling deal, following yesterday’s 2.2% market surge. CNN’s Fear & Greed Index has risen into the fear zone, and is expected to open at 35 this morning, after closing at 22 yesterday.

European markets edged cautiously higher in trading this morning, as investors continued to hope that a solution would be found to the US debt crisis. Talks between the Obama administration and Republicans are expected to continue today, with a deal possible before the end of the week. In London, shares in the UK’s postal service, Royal Mail, rose by 32% on their opening day of trading, triggering heavy volumes as investors cashed in their gains, spurring criticism that the government set the initial offering price for the shares too low. At 7am ET, the FTSE 100 was up 0.76%, the DAX was up 0.39%, and the CAC 40 was up 0.03%.

After yesterday’s jobless claims report showed an unexpected increase to 374,000, investors will be left in the dark today, as all of the day’s major economic reports — which cover retail sales and producer price inflation — are expected to be delayed by the government shutdown. The only report expected on-schedule today is October’s University of Michigan Consumer Sentiment Index, which is due at 9.55am and is expected to have fallen to 75.0, from 77.5 in September.

Things may get more interesting on the corporate front, as both J.P. Morgan and Wells Fargo are expected to report their third-quarter earnings before the opening bell. Analysts’ consensus forecasts suggest that J.P. Morgan may report earnings of $1.19 per share, while Wells Fargo is expected to post earnings of $0.97 per share. Analysts are broadly bullish on both banks, and J.P. Morgan was up by 0.5% in pre-market trading this morning.

Other stocks that may be actively traded today include Safeway, which was up by 7.7% in pre-market trading this morning and could surge when markets open, after the firm said that it would exit the Chicago market, where it operates 72 Dominick’s stores, resulting in a cash tax benefit of $400m – $450m.