US pre-open: Stocks seen higher as investors shrug off Italian referendum

US futures pointed to positive open on Wall Street, buoyed by an upbeat session in Europe, where investors largely shrugged off the resignation of Italian Prime Minister Matteo Renzi after he suffered a heavy defeat in a referendum on constitutional reform at the weekend.

At 1045 GMT, Dow Jones Industrial Average and Nasdaq futures were up 0.4%, while S&P 500 futures were 0.3% firmer.

Meanwhile, the main European indices were all on the front foot, with even Italy’s FTSE MIB swinging into the black despite worries about the impact of political instability on the country’s banks.

Jamieson Blake, retail sales manager at ADS Securities London, said: “It’s been a rather mixed few hours for US equity index futures with the weakness we saw emerging off the back of Mario Renzi’s referendum defeat not only having been reversed, but the current indication is that the Dow will open at a fresh all-time high, with the S&P not all that far behind, either.

“The combination of steady US economic growth – which won’t need too hawkish a stance from the FOMC to manage – along with the prospect of further QE from the ECB seems to be generating perfect conditions to extend the bull market rally. Whether this degree of enthusiasm is warranted remains to be seen and it does little to help placate any fears as to just how toppy indices are now looking.”

In currency markets, the dollar was trading up 0.2% versus the euro, which steadied after falling to a 20-month low against the greenback in Asian trading on the referendum result. It was up 0.7% against the yen and flat versus the pound.

At the same time, oil prices advanced, with West Texas Intermediate up 0.8% to $52.14 a barrel and Brent crude up 1% to $54.99.

In corporate news, technology giant Apple was a little firmer in pre-market trade after writing a letter to US regulators offering feedback on proposed guidelines for self-driving cars.

Elsewhere, manufacturer Rexnord Corp also edged higher pre-market trade after President-elect Trump criticised the company’s plans to relocate an Indianapolis factory to Mexico.

Investors will eye speeches from New York Fed President William Dudley, Chicago Fed President Charles Evans and St Louis Fed President James Bullard later in the day.

On the data front, Markit’s services purchasing managers’ index is at 1445 GMT, while ISM non-manufacturing is at 1500 GMT.