US pre-open: Markets set to rebound after Chinese data

US markets looked set to rebound at the start of a shortened trading week on the back of Chinese economic data giving some hope for more stimulus measures.

The Dow Jones Industrial Average was expected to open up around 243 points, while the S&P 500 and the Nasdaq were set to begin the session 28 and 65 points higher, respectively.

At 1500 GMT, the NAHB Housing Market Index will be released, while the Treasury International Capital statement will be unveiled at 2100 GMT.

Stocks climb on China stimulus hopes

Elsewhere, Asian stocks advanced on Tuesday as worse-than-expected Chinese economic growth data raised hopes of further stimulus measures.

China’s gross domestic product rose 6.8% in the fourth quarter compared to the same period a year ago, weakening from the previous quarter’s 6.9%.

Analysts had expected GDP to remain unchanged from the third quarter and the government is targeting 7% growth.

“On this occasion, I think the markets may have been relieved that the numbers were not as bad as they could have been, given the challenges facing the economy during this period of transition and slowing global growth,” said Craig Erlam, senior market analyst at Oanda.

“There is also the fact that there is still plenty of scope for fiscal and monetary stimulus to plug any gaps that appear in the coming years during this period of transition, which occurs at a time when the country is also trying to liberalise its markets, something that has faced many challenges already and will likely continue to do so this year.”

European markets were up, taking their cue from Asia, while oil prices peeped above $30 a barrel again.

Brent crude was up 5.46% to $30.11 a barrel while West Texas Intermediate rose 2.21% to $30.07.

The dollar dropped 0.2% against the pound, but was up 0.21% against the euro and 0.57% against the yen. Spot gold was down 0.38% to $1,085.50.

To take note of, strategists at JP Morgan reportedly lowered their forecasts for benchmark two and ten year US Treasury note yields by 30 basis points each to 1.45% and 2.45%, respectively.

Analysts at the broker said they now only expected the Fed to raise three times in 2016, versus a prior forecast for four rate hikes.

In company news, Morgan Stanley shares were up 3.4% before the bell after it revealed it swung to a profit in the fourth quarter. It followed the company’s steps to restructure its struggling Fixed Income business.

Bank of America also clocked gains, with the stock up by 1.9%, after posting better-than-expected earnings for the three months to the end of December, as expenses declined.