Adam Sarhan WSJ Quote: U.S. Stock Futures Edge Higher
By
TOMI KILGORE and PETER NURSE
Updated Nov. 27, 2013 8:28 a.m. ET
Activity was expected to remain light throughout the session ahead of the Thanksgiving holiday.
About 90 minutes ahead of the open, Dow Jones Industrial Average futures advanced 18 points, or 0.1%, to 16078.
S&P 500 index futures gained two points, or 0.1%, to 1804 and Nasdaq-100 futures rose five points, or 0.1%, to 3452. Changes in stock futures don’t always accurately predict stock moves after the opening bell.
On Tuesday, the Nasdaq Composite closed above 4000 for the first time since Sept. 7, 2000. The index remained 26% below its all-time closing high of 5048.62 hit on March 10, 2000. The Dow closed up less than one point Tuesday, but still managed a fourth-straight record high and the 43rd this year.
“The bulls are clearly in control of this market,” said Adam Sarhan, chief executive officer of Sarhan Capital. “You ride this trend until it ends. Right now, to argue with this tape would be foolish.”
At 8:30 a.m. EST, initial claims for jobless benefits in the latest week are expected to show a rise to 330,000 from an original estimate of 323,000 the week before. At the same time, durable goods orders for October are seen slipping 1.7% on the month.
That will be followed after the open by the Institute for Supply Management’s Chicago-area purchasing managers index for November at 9:45 a.m., which is forecast to slip to 60.0 from October’s 65.9. The final reading of the Thomson-Reuters/University of Michigan consumer-sentiment index for November is expected to be revised up to 73.5 from a preliminary reading of 72.0. And at 10 a.m., the Conference Board’s Leading Economic Index for October is forecast to be unchanged.
Although recent data suggest the economy continues to improve, many are still convinced the Federal Reserve will keep its easy-money policies intact, and won’t start paring back its $85-billion-a-month bond purchasing program until early next year.
Mr. Sarhan said he has been telling clients that are looking to commit fresh capital to stocks to exercise patience in the very short term, but to buy aggressively on pullbacks, which he believes will remain shallow and short-lived until the Fed starts reducing its bond purchases.
“The Fed-induced melt-up is alive and well,” Mr. Sarhan said. “We’ve yet to see any major economic data point to clearly show that the Fed will taper in December.”
The yield on the 10-year Treasury note inched up to 2.722% from 2.696% late Tuesday.
In Europe, the Stoxx Europe 600 rose 0.4%. The U.K.’s FTSE 100 index tacked on 0.2%, Germany’s DAX 30 gained 0.2% and France’s CAC 40 added 0.2%.
In Germany, GfK’s forward-looking consumer-sentiment indicator rose to 7.4% in December, the highest level in more than six years, from a revised 7.1% in November, and above expectations of 7.1.
Separately, Germany’s biggest parties have agreed on a deal to forge a coalition government led by Chancellor Angela Merkel, ending a month of fraught negotiations. In addition, the government of Italian Prime Minister Enrico Letta won a confidence vote on the country’s 2014 budget late Tuesday, despite opposition from former premier Silvio Berlusconi.
“Beyond the critical importance of the legislation…to be approved today, yesterday’s Senate confidence vote represents an important step for the government of PM Letta in the direction of more stability,” Barclays said, in a note to clients.
The euro was a touch firmer against the dollar, trading at $1.3595, from $1.3572 late Tuesday. Meanwhile, the dollar strengthened against the yen.
Asian markets closed mixed. China’s Shanghai Composite rose 0.8% after the head of the country’s central banks assured the market of more financial reforms. Japan’s Nikkei Stock Average slipped 0.4%, pulling back further from the six-month high reached on Monday.
Front-month January crude oil futures fell 0.4% to $93.27 a barrel, and was on an early track to settle at a five-month low, while gold futures rose 0.9% to $1,251.90 an ounce.
In corporate news, former Dow component Hewlett-Packard climbed 5.8% in premarket trading after the computer and printer maker reported late Tuesday that it swung to a profit in its fiscal fourth quarter, with adjusted earnings and revenue both beating analyst expectations. The company also maintained its full-year earnings outlook.
Time Warner Cable advanced 1.4% after The Wall Street Journal reported late Tuesday that Cox Communications is considering jumping into the bidding for the second-largest cable operator.
Charter Communications has expressed interest in Time Warner Cable, and Comcast is also contemplating a bid, the report said. Shares of Charter and Comcast were untraded ahead of the open.
