The Day Ahead: Equities Sharply Higher Ahead up Jobless Claims

Equity markets dropped at the final hour yesterday when news reports indicated that China was reluctant to buy European debt. This morning the reverse has happened: global equities are up and stock futures are sharply higher after China called Europe a key investment market. 

Ninety minutes before the opening bell, Dow futures are up 184 points to 10,105 and S&P 500 futures are 24.80 points higher at 1,086.00.

WTI crude oil is up $1.83 to $73.34 per barrel, and Spot Gold is up $1.50 to $1,213.30.

Stocks in China, Japan, and Hong Kong are all up more than 1%, while London’s FTSE 100 is up 1.86% and France’s CAC-40 is up 2.10%.

Key Events Today:

8:30 ― Revised data is anticipated to kick up GDP from 3.2% to 3.5% in the first quarter, following a much-stronger 5.6% leap in Q4 2009. The upward improvement is expected to come from private consumption and a narrower trade balance. With more recent developments dominating investor decisions, one can probably assume that any minor revisions are unlikely to have much sway in the markets.

8:30 ― Initial Jobless Claims surprised economists by jumping to a five-week high of 471k in the week ending May 22. More attention could be placed on the May’s final survey, as a return to the 450k level would show the jump was merely a blip, while another high number could change assumptions about near-term labor data.

“We interpreted the rise as statistical noise and do not think firing activity suddenly increased in mid-May,” said economists at Nomura. “We believe the four-week moving average of claims (454k) remains at a level consistent with private sector job growth.”

2:30 ― James Bullard, president of the St. Louis Fed, speaks on central bank policy challenges to the Swedbank Economic Outlook Conference in Stockholm.

Treasury Auctions:

• 1:00 ― 7-Year Notes