Stocks are inching higher as overseas markets rally sharply on
news of reforms in China.
S&P 500 futures are rising fractionally, while major European
markets are up about 0.5 percent. The Shanghai and Hong Kong
indexes surged almost 3 percent in the overnight session after the
Communist Party said it will allow larger families and loosen
control of financial markets.
Following several years of underperformance, international stocks
enjoyed a strong run between June and mid-October. They then pulled
back but have started to rally again in the last week, according to
Today's overseas price action is also noteworthy because Italy and
Spain, the higher-beta European countries, are both rallying more
than 1.5 percent. Combined with
several bullish options trades
last week, it suggests that sentiment is starting to favor
international stocks once again.
The S&P 500 has been climbing into record territory the last
three sessions as an improving global economy, ample cash on the
sidelines and accommodative monetary policy keep money flowing into
equities. There are also few calendar events this week that could
Even before news of the reforms in Beijing, researchLAB was showing
strength in Chinese stocks, especially Internet and gaming
companies. Aside from global names, retail has also been strong in
the last week as investors look forward the holiday-shopping season
at a time when the economy and job market are improving.
Transportation and travel-related companies such as car-rental
agencies, truckers, and railroad-supply companies have also stood
In company-specific news, Tyson Foods is indicated higher by 4
percent after earnings beat expectations. JinkoSolar is also up
more than 8 percent on a strong quarterly report. Attention next
focuses on retail, with Urban Outfitters issuing results after the
closing bell, followed tomorrow morning by Home Depot, Best Buy and
TJX. Lowe's, JC Penney, Staples, and L Brands report Wednesday.
Aside from small declines in oil and precious metals, commodities
and currencies are little changed today.
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