Positive Momentum Could Support Markets' Record Run

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Monday, with sentiment holding up despite the recent record run of the markets. Earlier in the global trading day, Chinese reform measures infused some optimism into the Asian markets, although the Australian and New Zealand markets did witness weakness. The Japanese market ended little changed. At the same time, European stocks have made a remarkable turnaround in late morning trading. If the positive momentum supports the domestic markets, the major averages could scale new peaks and target key psychological barriers.

U.S. stocks advanced solidly in the week ended November 15th, benefiting from official support for easy monetary policy and weak data that allayed fears of any premature stimulus withdrawal.

Last Monday, the major averages moved about in a lackluster manner amid a lack of any meaningful catalysts before closing slightly higher. The mood remained lackluster on Tuesday, with the averages closing on a mixed note.

After seeing weakness in morning trading on Wednesday, the major averages reversed course and closed notably higher, as traders clung to stimulus hopes. With Fed Chair nominee Janet Yellen toeing a dovish line at her confirmation hearing, stimulus hopes strengthened on Thursday, sending the major averages higher for the session.

Helped by some weak data that further fortified stimulus hopes, the major averages advanced on Friday and ended notably higher for the week in the process. The Dow Industrials and the S&P 500 Index repeatedly scaled unchartered territory and ended the week at fresh closing highs.

For the week ended November 15th, the Dow Industrials added 1.27 percent, the S&P 500 Index climbed 1.56 percent and the Nasdaq Composite Index rose 1.70 percent.

Among the sector indexes, the NYSE Arca Biotechnology Index surged up 4.41 percent for the week and the Philadelphia Housing Sector Index rose 3.58 percent. Additionally, the Dow Jones Transportation Average, the NYSE Arca Airline Index and the NYSE Arca Securities Broker/Dealer Index advanced over 2 percent each, while the NYSE Arca Gold Bugs Index slid 1.05 percent.

Crude, Commodity Markets

Crude oil futures are slipping $0.50 to $93.34 a barrel after retreating $0.76 or 0.80 percent to $93.84 a barrel in the week ended November 15th.

Last Monday, crude oil rose moderately before nose-diving on Tuesday, when it plunged over $2-a-barrel amid uncertainty.

Oil reversed course on Wednesday, rebounding moderately. After edging down modestly on Thursday amid strengthening stimulus hopes, the commodity rose slightly on Friday before ending the week lower.

Gold futures are currently slipping $7 to $6.60 an ounce. In the previous week, gold rose $2.80 or 0.22 percent to $1.287.40 an ounce.

Among currencies, the risk appetite generated by stimulus hopes supported risky bets in the week ended November 15th. The dollar rallied 1.14 percent against the yen before ending the week at 100.18, while the greenback retreated 0.97 percent against the euro to $1.3496.

The U.S. dollar is currently valued at 100.01 yen and is valued at $1.3516 versus the euro.

Asia

The major Asian averages closed on a mixed note, with the Japanese, Australian and New Zealand markets closing higher, while the rest of the markets advanced, led by China, enthused over the details of the reforms announced following a Chinese Communist Party conclave.

Details of the decisions published by Xinhua showed that the China is keen to implement radical reforms to transform the domestic economy to consumption-driven from one that is export-oriented. China has promised to allow more privatization in state-owned enterprises, speed up the opening of its capital account and introduce further financial reforms.

After opening roughly flat, Japan's Nikkei 225 average bounced back and forth across the unchanged line before closing modestly lower. The index closed down 1.62 points or 0.01 percent at 15,164. Resource and utility stocks retreated sharply, while most export stocks gained ground, as the yen stayed depressed.

Australia's All Ordinaries opened little changed but declined sharply in early trading. After trimming some of its losses over the course of the morning session, the index began moving roughly sideways in late afternoon trading. The index ended down 18.30 points or 0.34 percent at 5,378. Energy and financial stocks came under selling pressure, while material stocks saw marginal strength.

Meanwhile, Hong Kong's Hang Seng Index closed at 23,660, up 627.91 points or 2.73 percent, and China's Shanghai Composite Index ended at 2,197, up 61.39 points or 2.87 percent.

On the economic front, Chinese house prices in all cities except Wenzhou increased in October, according to data released by the National Bureau of Statistics. House prices rose in 69 out of 70 cities tracked by the government. Europe

After seeing strong gains in the previous week, European stocks opened lower but recovered in late morning trading and are seen advancing solidly thereafter.

In corporate news, Aberdeen Asset Management announced a deal to buy Scottish Widows Investment Partnership from Lloyds Banking Group for 500 million pounds in stock.

BT Group announced that its Openreach CEO Liv Garfield will leave the company next year. Garfield is set to take over the CEO position at water utility Severn Trent.

On the economic front, a survey by RightMove showed that U.K. house prices fell 2.4 percent month-over-month in November following the 2.8 percent jump in October. However, Rightmove noted that the drop was smaller than the average November declines over the previous three years.

A report released by Eurostat showed that the euro area's trade balance revealed a bigger than expected surplus for September.

U.S. Economic Reports

Housing, consumer and manufacturing readings, the FOMC minutes and several Fed speeches are among the economic events that could be in the spotlight in the unfolding week. Traders may focus on the National Association of Home Builders' housing market index for November, the National Association of Realtors' existing home sales report for October, the Commerce Department's retail sales report for October, the FOMC minutes and the results of the November manufacturing survey by the Philadelphia Federal Reserve.

The Fed speeches scheduled for the week, including one by Fed Chairman Ben Bernanke, may impart additional clarity to the central bank's monetary policy stance. The Labor Department's employment cost index for the third quarter, the Commerce Department's business inventories report for September and the Labor Department's consumer and producer price inflation reports for October round up the economic events of the week.

The Treasury is due to release data on the flows of financial instruments into and out of the country at 9 am ET.

The National Association of Home Builders is scheduled to release its housing market index for November at 10 am ET. The consensus estimates call for the index to have remained unchanged at 55.

Builder confidence waned in October. The housing market index based on the survey fell 2 points to 55 in October. The current sales conditions index fell 2 points to 58, the sales expectations index declined 2 points to 62 and the index measuring prospective buyer traffic moved down 2 points to 44.

New York Federal Reserve President William Dudley is scheduled to speak on the regional and national economy at 12:15 pm ET. Philadelphia Federal Reserve Bank President Charles Plosser will speak on the economic outlook in Philadelphia at 1:30 pm ET. Minneapolis Federal Reserve Bank President Narayana Kocherlakota is also scheduled to speak on TBTF in Minneapolis at 8 pm ET.

Stocks in Focus

Tyson Foods (TSN) reported better than expected fourth quarter earnings, while its revenues were in line.

General Electric (GE) announced that its GE Aviation unit received $26 billion worth of jet engine orders and service agreements for wide-body Boeing Aircraft from three leading airlines in the Middle East.

Boeing (BA) announced about 367 orders worth over $130 billion at the Dubai Air Show, with the bulk of the orders for its 777X long-haul airliner.