Equity indexes have turned green this morning after a surprise
rate cut by the European Central Bank.
S&P 500 futures are up about one-third of a percent after being
slightly negative, while European markets have also reversed
earlier losses and are now up by more than 1 percent. Asia fell in
the overnight session, led by declines of more than half a percent
in Tokyo and Hong Kong.
The next big event comes at 8:30 a.m. ET when the Commerce
Department releases third-quarter GDP. Economists expect growth of
1.9 percent, down from 2.5 percent in the preceding three months.
It isn't clear how investors will react to the news because a
strong reading could trigger fears that interest rates will
increase in the United States. Initial jobless claims will be
announced at the same time.
The S&P 500 has been consolidating at all-time highs for more
than a week after a sharp rally in mid-October. The index has held
above its 10-day moving average during that time, which suggests
short-term momentum remains bullish.
market scanner shows sentiment favoring industrial and
consumer-related stocks recently, while the energy and financial
sectors have lagged. Iron- and steel-related stocks and solar
energy have been especially strong.
The ECB's rate cut is sending the euro sharply lower in
foreign-exchange trading. The Japanese yen is also down slightly
against the greenback. Brent crude oil is down 1 percent, which
could hurt refinery stocks. Most other commodities are little
changed, although natural gas is up almost 2 percent.
European lenders such as Deutsche Bank, Credit Suisse, and Banco
Santander are rising on the rate cut. In other company-specific
news, Qualcomm will likely fall after issuing weak guidance, while
American Eagle Outfitters and Transocean are rallying on strong
quarterly reports. Tempur Sealy and Stratasys will probably climb
as well, after results beat expectations.