Japan keeps U.S. market on track

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The bullish momentum continues in stocks today, this time aided by strong economic data from Japan.

S&P 500 futures are indicated to begin the last day of the second quarter up more than one-quarter of a percent, following a 3.5 percent advance in Tokyo. Hong Kong and Shanghai gained 1.5 percent, though Europe is weak. Bond yields are down, boosting sentiment.

Japanese industrial production rose 2 percent, much better than the 0.2 percent forecast by economists. Retail sales also increased by 0.8 percent, compared with expectation of no growth. The news follows a positive gross domestic product revision earlier this month and confirms that the world's No. 3 economy is emerging from years of stagnation.

The only data reports in the United States today are the Chicago purchasing managers index at 9:45 a.m. ET and the final revision of consumer sentiment 10 minutes later. Next week is more important, with the pivotal Institute of Supply Management index Monday morning, along with employment data later in the week. Volumes will also probably be light with U.S. markets closed Thursday for the July 4 holiday.

The S&P 500 has risen for three straight sessions after bouncing at its 100-day moving average on Monday. The index has been in a strong uptrend since late last year as the economic picture brightens in the United States, Japan, and Europe. Emerging markets have mostly struggled.

Next month also brings the onset of another corporate earnings season, which officially begins on July 8 with Alcoa's results. The big question now facing investors is whether the decline in late May and early June was the deepest pullback we'll get or whether to wait before putting more money to work.

Treasury yields are also indicated to fall again today, which could further boost confidence in financials. Stocks that are sensitive to interest rates, such as utilities and real estate, have outperformed in the last week as bond prices rise and borrowing costs fall. That's a reversal of a move that took place over the last two months.

Our proprietary researchLAB market scanner also shows strength over the last week in emerging markets, solar, motor homes, and regional banks. Coal, precious metals, and materials producers have lagged.

Foreign-exchange and commodity markets show a mostly bullish mix of price action, with the euro higher and the yen down. Oil and copper are up slightly. Gold fell almost 1 percent but silver is trying to bounce, climbing more than 1 percent.

In company-specific news, Research In Motion is down 19 percent after reporting a surprise first-quarter loss. IT Consultancy Accenture declined 8 percent after revenue missed forecasts and management cut guidance.

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