Before the bell: Futures higher after Fed move and ahead of data, Exxon

01 05 2008

Before the bell: Futures higher after Fed move and ahead of data, Exxon

Posted by: in Housing

Filed under: Before the bell, Earnings reports, Forecasts, Ford Motor (F), General Motors (GM), Exxon Mobil (XOM), Market matters, Chevron Corp (CVX), Comcast Cl’A’ (CMCSA), Sun Microsystems (JAVA), Economic data, Housing, Federal Reserve

The market hasn’t seemed to have fully made up its mind yet regarding Wednesday’s Federal Reserve announcement about its policy. While stocks shot up immediately after the announcement, markets completed the Wednesday in the red. Still, this morning stocks futures edged higher as investors not only continued to digest the news, but awaited several more economic reports. The Bank of England saying the worst of the credit crisis may be over, definitely helps boost sentiment this morning.

Indeed, stocks ended Wednesday’s session lower despite the Dow topping 13,000 briefly after the Fed’s statement. It seemed also investors were divided, some preferring the Fed to signal clearly a pause in rate cuts so the dollar would gain strength and halt the rise in commodity prices and hence inflationary pressures. Meanwhile others were more concerned about the economy and perhaps preferred either a more positive language regarding the economy or indications of further measure. Regardless, the Dow Jones Industrial Average fell 11.81 points, or 0.09%, and the S&P 500 index shed 5.35 points, or 0.38%. The Nasdaq dropped 13 points, or 0.55%.

On the economic calendar for Thursday are the March figures for personal income and spending, which includes a key inflation measure. The ISM index for manufacturing activity also is on tap as well as construction spending. The weekly jobless claims is due before the opening bell, but April jobs report is due tomorrow, and that’ll likely affect markets the most.

Naturally, the Fed rate cut had an impact on the dollar, which rose to the highest level in five weeks against the euro and climbed versus the yen as investors, who have already priced in the cut, took into account the possible pause in the easing monetary stance. Of course, the BoE signaling it believes the worst of the credit crunch might be over, helped strengthen the currency as well, as it stated “risk appetite and confidence were apt to gradually return to the financial system.” Also, the Bank projects total credit losses could eventually reach approximately $170 billion, lower than current market estimates.

Automakers will also report April vehicle and truck sales throughout the day. Both Ford (NYSE: F) and GM (NYSE: GM) reported better-than-expected earning for the first quarter, with Ford even swinging to profit, but sales are still forecast to drop 6.7% and 8.5% respectively.

Earnings on tap this day include oil giant Exxon Mobil (NYSE: XOM) which might very well set a new record for corporate profits, with analysts expecting earnings of $2.12 per share. Chevron (NYSE: CVX) will also report first quarter results today. Sun Microsystems (NASDAQ: JAVA) is expected to report earnings of 18 cents a share and Comcast (NASDAQ: CMCSA) earnings of 19 cents a share.