Futures See Rally as Dollar Falls, Citi Gains
U.S. stock index futures pointed to a higher open Monday after the weekend's meeting of the group of twenty nations did little to change the downward trajectory of the dollar.
The dollar fell nearly a full percent against a basket of foreign currencies and remains near its 2010 low.
Citigroup shares jumped 3 percent in pre-market trading after Goldman Sachs added the company to its "conviction buy" list.
Goldman said it is keeping its $5.50 12-month price target for Citi based on its limited exposure in the mortgage-backed securities foreclosure fallout as well as the company's efforts to downsize and prospects for the government to shed its ownership stake in the company.
Goldman also reiterated HSBC as a "conviction buy", sending its U.S.-traded shares up about 1 percent premarket.
Also in the financials, details of the foreclosure mess continued to filter through, with a Wall Street Journal report claiming Bank of America acknowledged some mistakes in foreclosure files. Government owned mortgage financier Freddie Mac said that the foreclosure process in the U.S. is slowing. BofA shares rose nearly 1 percent in pre-market trading.
Meanwhile, Federal Reserve President Ben Bernanke said U.S. banking regulators are reviewinghow large financial institutions conducted foreclosures and will publish a report on their findings in November. Bernanke spoke Monday morning at a conference sponsored by the Fed and the Federal Deposit Insurance Corp.
European shares were mostly higher with mining stocks leading the gains. Asian shares ended mostly in the green, but Japanese indexes saw declines.
The prices of gold and oil were sharply higher as the dollar saw renewed selling pressure on the back of the G20 summit. The twenty nations agreed to refrain from competitive currency devaluations, which analysts saw as renewed incentive to bet on the dollar's decline. The yen hit a 15-year high against the dollar.
Other Fed officials due to speak Monday include St. Louis Fed President James Bullard at 1:30 p.m. and New York Fed President William Dudley at 4:30 p.m.
A survey from the National Association for Business Economics showed that economists have become increasingly pessimistic on the outlook for the U.S. economy for the full year. Though a return to a shrinking economy is not expected, the survey found.
At 10 a.m., September's existing home sales data is reported, with an increase to 4.25 million sales expected by analysts, according to Briefing.com.
Office Depot's shares jumped in pre-market trading after the office retailer announced CEO Steve Odland is stepping down. Odland, the company and another executive settled charges with the Securities and Exchange Commission last week over improper disclosures.
A flurry of corporate earnings are due Monday. RadioShack fell 3 percent in pre-market trading despite reporting third-quarter earnings and sales that beat forecasts on demand for smartphones. The electronics retailer was also helped by its relationship with T-Mobile as a postpaid wireless carrier and the addition of kiosks outside Target store. among those reporting numbers ahead of the bell.
Amgen and Texas Instruments report after-the-bell.
On the Calendar Next Week:
MONDAY: Existing home sales; after-the-bell earnings from Harris, Amgen and Texas Instruments.
TUESDAY: S&P Case-Shiller Home Price Index, consumer confidence, two-year Treasury note auction; before-the-bell earnings from DuPont, Ford, Bristol-Myers Squibb, CIT Group, Johnson Controls, Kimberly-Clark, and Wyndham Worldwide; after-the-bell earnings from Broadcom, Dreamworks and Massey Energy.
WEDNESDAY: MBA mortgage applications, durable goods, new home sales, oil inventories, five-year Treasury note auction; before-the-bell earnings from Comcast, P&G, SAP, ConocoPhillips, Deutsche Bank, Dr. Pepper Snapple, General Dynamics, Owens Corning; after-the-bell earnings from Allstate, Owens Illinois.
THURSDAY: Jobless claims, natural gas inventories, 7-year Treasury note auction; before-the-bell earnings from Shell, AutoNation, Coca-Cola Enterprises, Duke Energy, Motorola, Potash, Starwood Hotels, and Thomson Reuters; after-the-bell earnings from Microsoft and MetLife.
FRIDAY: GDP, employment cost index, Chicago PMI, consumer sentiment, farm prices; before-the-bell earnings from Chevron, Merck, Cigna, Constellation Energy and Estee Lauder.
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