By Peter Nurse
Investing.com - U.S. stocks are set to open higher Tuesday, with investors confident about the strength of the U.S. economic recovery, helped by strong earnings from retail giants Home Depot (NYSE:HD) and Walmart (NYSE:WMT).
At 7:15 AM ET (1115 GMT), S&P 500 futures traded 6 points, or 0.2%, higher, the Dow futures contract was up 99 points, or 0.4%, while Nasdaq 100 futures gained 38 points, or 0.3%.
The Dow Jones Industrial Average cash index declined 0.3% Monday, while the S&P 500 index climbed 0.3%, to the verge of its record close, and the Nasdaq Composite index climbed 1%, to a record closing high.
Investors are at their "most bullish" on financial markets since February, when world stocks hit a record high, a Bank of America (NYSE:BAC) fund manager survey showed Tuesday.
Of the 181 survey participants, who manage half-a-trillion dollars in assets, a net 79% expect a stronger economy, the strongest reading since December 2009. The majority now believe that stocks are now in a new bull market, rather than a bear market rally.
Both Home Depot and Walmart set an upbeat tone ahead of a slew of business updates from major retailers.
Home Depot stock rose 2.4% in premarket trade, after its quarterly comparable same-store sales soared 23%, while Walmart gained 6% premarket after posting its biggest-ever growth in online sales.
Helping this confidence has been the expectation that the U.S. economy will benefit from a new stimulus plan in the near future. This had started to look unlikely as the two political sides refused to compromise around the size and scope of the new bill, but Senate Republicans now plan to introduce a scaled-back stimulus bill, according to Politico.
The Democrats have resisted the passing of a piecemeal bill, and are currently involved in their national convention. But they are due back in Washington on Saturday and this could be the starting point for new discussions, Politico argued.
Elsewhere, looking at economic data, housing starts are expected to have posted a third straight monthly gain to 1.24 million in July, while building permits are expected to rise to 1.32 million.
Oil prices traded in a tight range Tuesday, but near five-month highs, as the market awaited the American Petroleum Institute’s crude oil stocks update, due later in the day, and then Wednesday’s OPEC+ joint ministerial monitoring committee meeting.
OPEC+, which consists of the Organization of the Petroleum Exporting Countries and its allies, tapered their agreed output cuts to 7.7 million barrels per day in August from 9.7 million barrels per day previously, as prices started picking up.
U.S. crude futures traded 0.4% lower at $42.71 a barrel, while the international benchmark Brent contract fell 0.2% to $45.27.
Elsewhere, gold futures rose 0.7% to $2,013.60/oz, helped above the $2,000 level again by a weaker dollar, with EUR/USD 0.3% higher at 1.1901.