Stock futures advance post-Crimea vote; data ahead

March 17, 2014

London (Mar 17)   U.S. stock futures pushed higher on Monday, with the market moving to a risk-on mode for now as investors saw no signs so far of any reaction from the West after Crimeans opted to rejoin Russia as expected in a controversial referendum.

A clutch of data is also ahead, including a manufacturers’ survey and a home builders’ index. Later this week, investors will also get a Federal Open Market Committee meeting.

Futures for the S&P 500 index barreled ahead 8.70 points, or 0.5%, to 1,841.60, while those for the Dow industrials   jumped 80 points, or 0.5%, to 16,073. Futures for the Nasdaq-100  rose 21.50 points, or 0.6%, to 3,642.50.

The Wall Street Journal reported that according to preliminary results, more than 95% of Crimeans voted to break away from Ukraine on Sunday.

“The vote itself went exactly as was expected, but Friday’s risk aversion wasn’t based on how the vote would go, it was down to the uncertainty around how the West would respond,” said Craig Erlam, market analyst at Alpari UK, in emailed comments. “As yet, there has been no response which is why we’re seeing that relief rally this morning.”

Western leaders are expected to further discuss sanctions for Russia in the wake of the referendum they deem illegal, and U.S. officials could deliver on a first round on Monday, The Wall Street Journal reported. EU foreign ministers are also slated to meet on Monday in Brussels to discuss possible sanctions on Russia, which could include visa bans and freezing assets. Erlam, like others, thinks that volatility is still going to be a factor for markets, with tensions between Russia and the West potentially proving a trigger for that “at any moment.” Poland: Russia faces sanctions as early as Monday

Data will provide some distraction for investors on Monday. The Federal Reserve survey of manufacturing in the New York area, the Empire State index, for March will be released at 8:30 a.m. Eastern Time. The index is expected to rise to 5.4 after dropping to 4.5 in February. It soared to 12.5 in January, the highest level since May 2012.

Industrial production and capacity utilization data for February will be released at 9:15 a.m. Eastern Time, while the home builders’ index for March is due at 10 a.m. Eastern.

Russia-Ukraine turmoil and China-growth concerns contributed to the worst weekly losses for Wall Street last week since late January. The S&P 500 index  fell 2% to give up a short-lived gain for the year. Markets moved into a risk-averse mood on Friday ahead of the Crimea vote, some of which was being reversed on Monday.

Gains were also seen across Europe, with the Stoxx Europe 600   up 0.7% and emerging markets getting a bump. Russia’s blue-chip MICEX index XX:MICEXINDEXCF -0.89%  climbed 2.2% after a drop of more than 7% last week.

Asia, meanwhile, saw a mixed session, with some indexes pulling back on Ukraine worries. But the China Shanghai Composite  climbed 1%, led by property, auto and cement companies, after the government reportedly outlined urbanization-spending plans. Copper , which has been under pressure recently over worries about the Chinese economy, rose 2 cents, or 0.6%, to $2.97 a pound.

China also over the weekend widened its yuan-trading band to 2% against the dollar, a move that may just bring about more yuan weakness.

Prices for gold  were almost unchanged, while the dollar regained some ground as investors shifted away from perceived safe haven of the Japanese yen.

Among corporates in the U.S., Herbalife  is likely to remain in the spotlight following the disclosure last week of an investigation by the Federal Trade Commission .

Source:  MarketWatch


Silver Phoenix Twitter                 Silver Phoenix on Facebook