Stocks are moving higher this morning as investors await news on the looming US budget sequester and results from the Italian election.
Dow (INDEXDJX:.DJI) futures are up 0.43% at 14,041. Futures on the S&P 500 (^INX) rose 0.48% to 1,521.80 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.73% to 2,755.75. No major economic announcements are scheduled for today.
This week, the focus will be on politcs in several different countries. The US Congress returns to the Hill today after a week recess, and votes to prevent the sequester are scheduled for tomorrow. At the end of this week, $85 billion will be slashed from the Federal budget if no deal is reached. Yesterday, the White House pushed its case against the spending cuts and released a report detailing the economic impact on each state.
Fed Chairman Ben Bernanke will also give his semiannual testimony to Congress on monetary policy tomorrow and Wednesday.
The polls close in Italy this morning. Surveys suggest that Italian voters could possibly reject outgoing Prime Minister Mario Monti's party and the fiscal austerity that it came to represent. Silvio Berlusconi could possibly return to government on this vote. Former comedian Beppe Grillo could siphon off enough votes to form a majority with Berlusconi, stealing the government from Pier Luigi Bersani, Monti's chosen successor.
(See also: If Mood Slides Again in Italy, Expect Berlusconi to Be Back in Office)
Moody's downgraded the UK on Friday night, putting the country out of AAA status for the first time ever and prompting fears that the country's borrowing costs could rise. The pound fell to a 17-month low of 1.139 to the euro and $1.5139 to the dollar. 10-year UK gilts fell today, and yields rose five basis points to 2.15%. Despite the downgrade, the FTSE 100 (INDEXFTSE:UKX) is up 0.61% at 6,374.94. Some investors see the downgrade as possibly prompting more pro-growth fiscal and monetary policies.
Cyprus also held elections, where the pro-bailout party won power.
The Bank of Japan tapped Asian Development Bank head Haruhiko Kuroda to replace outgoing governor Masaaki Shirakawa. Kuroda's dovish view toward aggressive monetary easing is more in-line with the government's.
HSBC's preliminary manufacturing purchasing manager's index for China this month fell from 52.3 to 50.4. Though this figure missed expectations by nearly two points, it still sits above the 50 threshold that indicates growth in the sector.
Lowe's (LOW) posted a better-than-expected fourth quarter profit, spurred by the housing market recovery and Hurricane Sandy-related repairs. Profit fell 11% from the year earlier to $0.26 per share. The second largest home improvement retailer forecast 2013 profit of $2.05 per share, a nickel below analyst estimates.
Leonard Riggio, the chairman and top shareholder of Barnes & Noble (BKS) is mulling buying out the consumer chain, splitting the company into two parts and taking the 689 retail stores private. This would leave the company with its college bookstores and the Nook tablet business.