Stock indexes look ready to hold or even build on Monday’s gains. Futures for the S&P 500 ― which has just completed its best three-month rally in six decades, pushing the index above its 200-day average ― are up almost 3 points in pre-session trading. Unlike the rest of the week, there’s little data to shift investor sentiment today, although at 10 am the Pending Home Sales Index for April could have some impact on sentiment.
The PHSI looks at contracts that have been signed, but not finalized, for existing home sales, thereby gauging demand in the real estate market. The index is valuable not only in projecting home sales, but in measuring general momentum in the economy.
In March, the index moved up 3.2%; the consensus expects an additional 0.5% bump in April. Most contracts are finalized within a month or two of signing.
The only other data releases scheduled are the weekly retail sales indexes from Johnson Redbook and Goldman Sachs-ICSC.
Outside of data, it’s been reported that GM has sold Hummer, though it remains unclear who the buyer is. With GM reassembling itself after filing for Chapter 11 protection yesterday, DeVry will replace the automaker in the S&P 500, and Cisco will replace it in the Dow.
Other major news comes from China, where U.S. Treasury Secretary Tim Geithner has been encouraging support for the U.S. dollar. According to the Washington Post, Geithner said the Chinese expect the greenback to remain the world’s reserve currency for a long period of time.
"What I sense is a fair amount of confidence, not just in the basic underlying strength and resilience of the U.S. economy, its dynamism, but in our capacity not just to solve this crisis, get growth back on track, but to go back to living within our means," Geithner said.
His comments will be heartening to those worried that the world’s largest bond holder could lose appetite for Treasuries, especially as the Obama administration plans trillion-dollar deficits in the coming years.
Despite Geithner’s ‘sense,’ however, the Chinese Global Times newspaper concluded, “Ordinary Chinese people are discontent with the declining value of China's huge foreign exchange reserves denominated in U.S. dollars.” A poll from the newspaper found that 87% of respondents believe China’s dollar-assets are unsafe.