US pre-open: Stocks to tick up, Dow edging closer to 20,000
US stocks looked set to tick just a touch higher at the open, with the Dow edging ever closer to the 20,000 mark in holiday-thinned trade.
At 1120 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all up 0.1%.
Remo Fritschi at ADS Securities in London said: “Wall Street futures suggest that the positive sentiment is still in play and the current opening forecasts mean that a push out to the 20,000 level for the Dow before the year end remains a distinct possibility.
“There’s little in the way of scheduled economic data on the slate for today, which again will make downside pressures harder to justify. Markets have also shown resilience towards the tragic event in Berlin last night - which is believed to be terrorism-related – although clearly any further developments here could serve to rattle confidence.”
In Europe, the main indices were a little firmer, with all eyes on Italy after the government there said it will seek parliamentary approval to borrow up to €20bn to support its banking sector and potentially rescue Banca Monte dei Paschi di Siena.
If Monte dei Paschi is unable to arrange a private sector bailout, a state rescue may come as early as this week.
Meanwhile, oil prices advanced, with West Texas Intermediate up 0.3% to $53.23 a barrel and Brent crude up 0.7% to $55.30.
In currency markets, the dollar was up 0.3% versus the pound, 0.2% against the euro and 0.7% versus the yen.
On Monday, stocks in the US closed a touch higher as investors digested events in Germany and Turkey. A truck ploughed into a Christmas market in Berlin, killing twelve people and injuring 48 in what is suspected to have been a terrorist attack.
In Turkey, the Russian ambassador was shot dead by an off-duty policeman who appeared to be protesting Russia’s involvement in Aleppo. Meanwhile, in Zurich, three people were injured in a gun attack at a mosque.
Market participants were also mulling over policy announcements from the Bank of Japan and the Reserve Bank of Australia.
The BoJ kept its monetary policy unchanged on Tuesday, as expected, maintaining its target for a negative 0.1% interest on some excess reserves and the 0% 10-year government bond yield.
However, the BoJ sounded a more upbeat note on the economy, underpinning expectations that its next move will be a hike rather than a cut to interest rates.
Meanwhile, the Reserve Bank of Australia also stood pat on interest rates, as expected, at a historic low of 1.5%, and hinted that it was happy to keep rates where they are for the moment. The RBA stopped short of mentioning a recession but suggested the door was open to a rate cut in the New Year.
In corporate news, Conatus Pharmaceuticals surged in pre-market trade after it announced a licensing deal with Novartis for a liver disease treatment late on Monday.
Carnival, Blackberry, General Mills and Darden Restaurants were among the companies slated to report earnings before the opening bell, with FedEx and Nike due after the close.