Futures rose last week after the largest one-day drop in the last six months. However, traders seemed to remain cautious as there are concerns about global growth. The Dow had fallen 2.1 percent or a total of 326 points on February 3rd. This was the biggest one day sell-off in over seven months. This was due to growing concerns with weakness occurring in the U.S. economy. The Dow came back the nest day and added 0.5 percent or 72.44 points. The SAP added 0.8 percent or 13.31 points. The Nasdaq rose by 0.9 percent of 34.56 points.
All major markets dropped due to a weak manufacturing activity reported that stoked fears that growth was slowing. This report was released after many weeks of worry about economic and political turmoil occurring in emerging markets. The stocks and currencies in developing countries also rebounded after futures showed signs of recovery. One interesting aspect about the gain in stock futures was the lack of news prompting market movements.
Many traders have expected a rebound after the decline in markets that occurred. This is often due to a bounce-back effect which is common as many stocks get oversold. One crucial determination about an expected recovery is to wait for a follow-through before feeling comfortable. Economic data will need to be evaluated as it will be of significant importance. A pullback in stock prices will often mean there are traders who will use the opportunity to look for bargains. Most stocks that were beaten up are now beginning to see better performance.
The day after the decline in the markets was quiet as there was not economic news on the calendar. An assortment of reports on employment in the U.S. are upcoming. One report of interest that is due is the ADP employment report. The report will be released from the largest payroll processor in the nation. A monthly report from the government is also scheduled to be released. Investors are looking to discover the total job numbers to disprove or validate any weak manufacturing activity. A report on job orders is also on deck. The markets are...