U.S. Stocks Likely To See Further Upside In Early Trading

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to extend the upward move seen in the previous session.

U.S. stocks closed on a strong note on Monday, with several counters from across various sectors attracting buyers.

Firm commodity prices and the U.S. drug regulator’s nod to a Pfizer-BioNTech coronavirus vaccine aided sentiment.

Technology stocks had a good outing once again, and contributed significantly to the fairly buoyant mood in the market.

Energy stocks gained ground in positive territory as crude oil prices rose sharply, rebounding smartly after six successive days of losses.

Investors awaited the Federal Reserve’s annual Jackson Hole conference later in the week for clues on possible asset purchase tapering timeline.

Among the major averages, the Dow ended higher by 215.63 points or 0.6 percent at 35,335.71. The S&P 500 advanced 37.86 points or 0.9 percent to settle at 4,479.53, while the tech-heavy Nasdaq closed stronger by 227.99 points or 1.6 percent at 14,942.65.

Data from National Association of Realtors said existing home sales in the U.S. increased by 2 percent month-on-month to 5.99 million in July, beating forecasts for a rise to 5.83 million.

Among the gainers, Boeing, Chevron, Caterpillar and Intel moved up 2 to 3 percent. Salesforce.com, Honeywell International, Nike, JP Morgan Chase, Walt Disney, American Express and Amgen also ended notably higher.

Trillium Therapeutics Inc. shares skyrocketed nearly 190 percent. Pfizer Inc. and Trillum Therapeutics Inc. entered into a definitive agreement under which Pfizer will acquire Trillium for an implied value of $2.26 billion or $18.50 per share.

Commodity, Currency Markets

Crude oil futures are climbing $0.96 to $66.61 a barrel after skyrocketing $3.50 to $65.64 a barrel on Monday. Meanwhile, after jumping $22.20 to $1,804 an ounce in the previous session, gold futures are inching up $1.80 to $1,808.20 an ounce.

On the currency front, the U.S. dollar is trading at 109.55 yen compared to the 109.70 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1748 compared to yesterday’s $1.1745.

Asia

Asian stocks rose sharply on Tuesday as positive U.S. vaccination news and easing worries about an imminent tapering of stimulus by the Federal Reserve raised hopes the global economy will recover faster than expects.

Investors also awaited the Federal Reserve’s annual Jackson Hole conference later in the week for clues on possible asset purchase tapering timeline.

Chinese shares rose sharply after reports emerged that the U.S. Securities and Exchange Commission has begun issuing new disclosure requirements to Chinese firms looking to list in New York.

The benchmark Shanghai Composite index jumped 37.34 points, or 1.07 percent, to 3,514.47 while Hong Kong’s Hang Seng index ended up 2.46 percent at 25,727.92.

Japanese shares followed Wall Street higher, with the Nikkei average ending up 237.86 points, or 0.87 percent, at 27,732.10. The broader Topix index closed 1.0 percent higher at 1,934.20 on expectations for a faster economic recovery globally.

Heavyweight SoftBank Group gained 1.5 percent and Uniqlo operator Fast Retailing rose 0.8 percent. Robot maker Fanuc advanced 1.6 percent and chip manufacturing equipment maker Tokyo Electron jumped 2 percent.

Showa Denko shares plummeted 9.6 percent on equity dilution worries after the industrial materials maker announced a sale of new shares.

Australian markets ended higher as investors took comfort from higher commodity prices and a raft of strong corporate earnings.

The benchmark S&P/ASX 200 index edged up 13.10 points, or 0.17 percent, to 7,503 while the broader All Ordinaries index ended up 12.60 points, or 0.16 percent, at 7,773.70.

Energy stocks such as Origin Energy, Santos and Woodside Petroleum rose over 3 percent each as oil prices jumped more than 5 percent after seven sessions of declines.

Papua New Guinea-focused Oil Search gained 3 percent after it bounced back to a first-half profit. Gold miners Evolution, Newcrest and Norther Star Resources added 1-2 percent as a retreat in the dollar pushed bullion prices higher.

Infection prevention company Nanosonics soared 21.9 percent after it forecast a double-digit revenue growth in fiscal 2022. Wireless broadband services Uniti Group climbed 8.4 percent after reporting record revenue and earnings for the year.

Ansell slumped 9.2 percent after the protective equipment maker warned of COVID-related supply and logistics issues. Online marketplace giant Kogan plunged 15.8 percent after declaring it will not pay a final dividend.

Seoul stocks rallied to extend gains from the previous session amid easing worries of an imminent tapering of Fed stimulus. The Kospi average jumped 48.09 points, or 1.56 percent, to close at 3,138.30 on tech gains.

Market bellwether Samsung Electronics climbed 3.1 percent, while No. 2 chipmaker SK Hynix and internet portal operator Naver both advanced 1.9 percent.

Consumer confidence in South Korea dipped slightly in August, according to the latest survey from the Bank of Korea’s sentiment index, which came in with a score of 102.5 – down from 103.2 in July.

Europe

European stocks were mixed on Tuesday, as investors awaited the Federal Reserve’s annual economic policy symposium later this week for cues on when the U.S. central bank may actually start scaling back its bond-buying program.

Underlying sentiment remained supported somewhat after U.S. authorities gave full approval for the Pfizer-BioNTech COVID vaccine for people aged 16 and older.

On the economic front, official data showed Germany’s economy grew at a faster than expected pace in the second quarter, underpinned by domestic demand.

Gross domestic product grew a seasonally and calendar-adjusted 1.6 percent from the first quarter, when output decreased 2.0 percent, Destatis reported.

An increase of 1.5 percent was estimated initially. In the second quarter of 2020, GDP fell 10 percent amid the peak of the Covid-19 pandemic.

On a year-on-year basis, GDP grew 9.8 percent in the second quarter after a 3.3 percent fall in the first quarter. Growth was estimated as 9.2 percent in the flash estimate.

The pan European Stoxx 600 edged up 0.1 percent to 472.50 after rising 0.7 percent on Monday.

The German DAX rose 0.4 percent, while France’s CAC 40 index dropped 0.2 percent and the U.K.’s FTSE 100 was down 0.1 percent.

The dollar held near a five-day low on expectations that the U.S. Federal Reserve might delay tapering of economic support, given the spread of the Delta variant of COVID-19.

Banks traded lower in London, with Lloyds Bank and HSBC Holdings falling more than 1 percent.

John Wood Group shares fell 2.6 percent. The consulting and engineering company reported that its first-half loss was $11 million, same as last year.

Travel and leisure stocks rallied, with Lufthansa, IAG, Air France KLM and EasyJet climbing 2-4 percent.

Miners Anglo American and Glencore were up more than 1 percent.

Marks and Spencer Group jumped 4.6 percent after Berenberg and Credit Suisse raised their price targets on the stock.

Novartis fell over 1 percent. The Swiss drug maker said its Kymriah CAR-T therapy did not meet its primary endpoint of event-free survival in a phase III study.

U.S. Economic Reports

The Commerce Department is scheduled to release its report on new home sales in the month of July at 10 am ET. New home sales are expected to slump by 2.7 percent.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $60 billion worth of two-year notes.