Futures Buoyed by Gains in Europe, Waning Risk Aversion

Futures Buoyed by Gains in Europe, Waning Risk Aversion

U.S. stock futures were trading significantly higher in step with European equities amid reports that the European Central Bank will maintain monetary accommodation, and as risk aversion continues to dissipate across global bourses.

Dow futures are off their early morning highs, but indicate a 50 point gain at the cash market open.

Euro-zone bourses were driven higher early this morning following a report from Reuters that said European Central Bank president Mario Draghi will not discuss altering monetary accommodation at the Aug. 25 Jackson Hole symposium. Speculation has been circulating for months that Draghi would use Jackson Hole as an opportunity to introduce his plans to taper asset purchases, resulting in a 6.6% appreciation in the euro over the past seven weeks.

Accordingly, the reaction to this latest news drove the euro sharply lower, and, coupled with upbeat Euro-zone gross domestic product data, lifted Germany’s DAX by nearly 1% and the Euro Stoxx by 0.70%.

Futures held onto early gains following a miss on housing starts and permits. New home construction was down 4.8% to a seasonally-adjusted annual rate of 1.155 million in July from a revised SAAR of 1.213 million, missing 1.225 million estimates.

Permits dropped 4.1% to 1.223 million from a revised 1.270 million, missing 1.246 million estimates.

At 2 pm ET, the Federal Open Market Committee releases the minutes of their July meeting at which time the FOMC did not alter monetary policy

-Dow Jones Industrial up 0.25%

-S&P 500 futures up 0.14%

-Nasdaq 100 futures up 0.26%

SENTIMENT

Nikkei down 0.12%

Hang Seng up 0.86%

Shanghai Composite down 0.15%

FTSE-100 up 0.78%

DAX-30 up 0.88%

PRE-MARKET SECTOR WATCH

(+) Large cap tech: Higher

(+) Chip stocks: Higher

(+) Software stocks: Higher

(+) Hardware stocks: Higher

(+/-) Internet stocks: Mixed

(+/-) Oil stocks: Mixed

(+) Biotech stocks: Higher

(+/-) Drug stocks: Flat

(+) Financial stocks: Higher

(+) Retail stocks: Higher

(+) Industrial stocks: Higher

(+/-) Airlines: Flat

(+) Autos: Higher

UPSIDE MOVERS:

(+) URBN (+20.81%) Q2 earnings and revenue tops expectations

(+) RADA (+15.32%) Awarded $8 million U.S. military contract

(+) TGT (+3.00%) Reported better-than-expected Q2 earnings

DOWNSIDE MOVERS:

(-) VIAV (-6.87%) Q3 outlook trails street expectations

(-) CGIX (-3.23%) Acquired vivoPharm for $12 million

(-) NTEC (-1.03%) Launched public offering of shares

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