Dow Futures Dip Despite Strong China Data

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.30% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down 0.34%. The CNN Fear & Greed Index is set to open at 46, or ‘neutral’, after closing at 47 yesterday.

After a brief burst of optimism yesterday, most European markets turned south once more this morning, although the FTSE 100 has held onto early gains. The day started positively with overnight figures from China showing that Chinese industrial output rose by 9.7% in July, while the inflation rate remained unchanged at 2.7% in June, comfortably below the Chinese government’s 3.5% target. However, closer to home, the news was less encouraging. French industrial output fell by 1.4% in June, and German exports rose by just 0.6%, missing forecasts for a 1% increase. At 7am ET, the FTSE 100 was up 0.28%, the DAX was down 0.13%, and the CAC 40 was down 0.17%.

Today’s US economic calendar is limited to June’s wholesale inventories report, which is due at 10am ET. Analysts are expecting a 0.5% gain in inventories for June, after seeing a fall of 0.5% in May.

Corporate earnings are thin on the ground as well, but earlier this morning, NRG Energy reported a second-quarter adjusted loss of $0.63 per share, and increased its full-year revenue guidance to $2.63bn, ahead of analysts’ expectations for $2.29bn. Other companies due to report before markets open this morning include Beacon Roofing Supply, which is expected to report a fiscal third-quarter profit of $0.71 per share on revenues of $670m. Also scheduled are Whitewave Foods and DiamondRock Hospitality.

Other stocks likely to be actively traded today include J.C. Penney Company. The company’s shares gained 6.7% yesterday on strong volumes after activist hedge fund manager Bill Ackman’s called on the board to appoint a new CEO within 45 days, but the shares were down by 3% in pre-market trading this morning, suggesting that more volatility lies ahead for the troubled retailer. Blackberry shares were up 9% in pre-market trading on reports that the smartphone firm might be taken private, and internet travel giant wasup 5.7% in early trading after its latest results beat expectations, after the close last night.

Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.

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> Roland does not own shares in any of the companies mentioned in this article.