US pre-open: Stocks higher ahead of start of earnings season



LONDON (ShareCast) - The main US market averages are now being called to open lower by approximately 0.2 per cent on average. That ahead of the start of the first quarter earnings season, tomorrow, after aluminium maker Alcoa (NYSE: AA - news) publishes its latest quarterly results.

Banks however are trading rather well after the Basel Banking Supervision Committee eased its calendar - and the terms - for the implementation of lender's new liquidity requirements.

Bank of America (Other OTC: BACYL - news) will pay Fannie Mae $3.6bn to resolve home-loan repurchase claims. The latter, which for all intents and purposes enjoys the US government's backing, had been claiming that the lender had knowingly mis-represented the risks surrounding the mortgage instruments which it had marketed to it.

The lender will also pay $6.75bn to repurchase residential mortgages sold to Fannie Mae. The question which will naturally arise is whether the fact that a deal is being reached now reflects greater confidence on the part of Bank of America over the outlook for those same instruments.

Yahoo (NasdaqGS: YHOO - news) ! Is trading down by 1.5% after Sanford C. Bernstein downgraded the shares.

Analysts at Morgan Stanley (Xetra: 885836 - news) have upgraded their view on (NasdaqGS: AMZN - news) to 'overweight' from 'equalweight' before.

Roche has taken its bid for rival Illumina (NasdaqGS: ILMN - news) off the table.

Barclays (LSE: BARC.L - news) has lowered its target price on shares of Apple (NasdaqGS: AAPL - news) to $740 from $800 before.

Not to be lost sight of, the Las Vegas Consumer Electronics Show (CES) is slated to begin tomorrow.

Acting as a backdrop, over the weekend US Senate majority leader Mitch Mc.Connell indicated that Republicans are not willing to raise taxes any further. This initial stance may just be a part of the negotiation process expected to take place over the next month approximately.

Also worth mentioning, as far as market 'technicals' are concerned are: after rising by 20% Chinese equities have entered a 'bull market' and levels of volatility have hit relative new lows in the US (the VIX fell below 14 last Friday).

10 year US Treasury yields are now flat at 1.9%

Front month West Texas crude futures are off by 0.540 dollars to the 92.59 dollar per barrel mark.