By Nick Gentle - Aug 23, 2011 1:57 PM GMT+0700
Futures on the Standard & Poor’s 500 Index rose, signaling the U.S. equity gauge will open higher, on speculation the Federal Reserve will act to prop up the faltering economic recovery and as a contraction in Chinese manufacturing activity eased.
Futures on the S&P 500 expiring in September climbed 1.4 percent to 1,138.6 at 2:52 p.m. in Hong Kong. The contract swung between gains and losses before the release of a preliminary China purchasing-managers index compiled by HSBC Holdings Plc and Markit Economics. The S&P 500 closed little changed at 1,123.82 yesterday. Futures on the Dow Jones Industrial Average increased 1.2 percent to 10,977.
Most U.S. stocks fell yesterday as declines by Goldman Sachs Group Inc. during the last 15 minutes of trade erased an intraday advance on hopes Fed Chairman Ben S. Bernanke will unveil new stimulus measures as soon as this weekend. The S&P 500 fell 16 percent from July 22 through the end of last week and its members trade at an average 11.3 times estimated earnings, near the lowest level since March 2009.
“Investors are hoping the Fed will show its commitment to supporting growth,” said Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd., which manages almost $100 billion. “There’s a real risk of disappointment if some sort of strong commitment doesn’t appear. Still, corporate health looks good, sentiment has moved to pessimistic extremes, and valuations are very attractive, so we could be in for a strong, tradable short-term rally.”
Jackson Hole
A four-week global equity rout has wiped about $8 trillion from companies’ market value as Europe’s sovereign debt-crisis and worsening economic reports in the U.S. raised concern the global economic recovery is faltering. Central bankers from around the world converge on Jackson Hole, Wyoming, this week for a conference that last year resulted in Bernanke signaling a second round of Fed asset purchases that buoyed asset markets.
Investor sentiment was also bolstered today after HSBC and Markit Economics reported a preliminary reading of 49.8 for its Chinese purchasing-managers index in August, compared with last month’s final reading of 49.3. The final August number is due Sept. 1. A reading below 50 indicates a contraction.
The data suggests that growth in China is moderating rather than collapsing and the slide in the index in July may have been a one-off “blip,” HSBC said.
To contact the reporter on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
Posts
No comments:
Post a Comment