Before the bell: Futures higher ahead of retail sales data

Posted Nov 16th 2009 7:45AM by Melly Alazraki
Filed under: Before the Bell, International Markets, General Motors (GM), Market Matters, Japan, Economic Data, Federal Reserve

U.S. stock futures followed global markets higher Monday morning as Japan announced its economy grew at a faster-than-expected pace and governments around the world said they would maintain their stimulus policies. Investors are also awaiting a speech from Federal Reserve Chairman Ben Bernanke, GM's first earnings report since emerging from bankruptcy, as well as more economic data, including retail sales and manufacturing.

Japan's gross domestic product grew at an annual pace of 4.8% in the third quarter, its largest expansion in more than two years. This was higher than economists' 2.6% projection. The world's second largest economy relies heavily on exports and demand at home and overseas improved, indicating its trading partners are also recovering.

With Japan's strong growth numbers and the general affirmation from governments around the world to keep the stimulus, world stock markets advanced Monday about 1% higher.

At home, the upcoming retail sales report will garner much attention. The release of the October figures will be at 8:30 a.m. Eastern, an hour before the market opens. Economists expect sales to have rebounded 0.9% in October after declining 1.5% in September. Excluding autos, sales are expected to have risen 0.4% after a 0.5% climb the month before. Investors will keep an eye on this report to get an idea of the outlook for consumer spending ahead of the key Christmas period. U.S. consumer spending also has ramifications to the global economy.

Also at 8:30 a.m., the New York Federal Reserve's Empire State manufacturing survey for November will be released and then, at 10:00 a.m., September business inventories are due out. Finally, Bernanke is due to speak at 12:15 p.m. Eastern.

Among other companies capturing headlines this morning is General Motors Co., which will release its preliminary third-quarter earnings results. According to the Associated Press, GM has announced it will begin paying back $6.7 billion in U.S. government loans by the end of 2009 and could pay off that full amount by 2011, four years ahead of schedule. Update: GM has reported.