Can stock markets break their four-week losing streak? They're certainly trying on Monday morning, with global stock market indexes higher in the early going after one of the most notable analyst upgrades of the year.
U.S. stock index futures were higher with about 40 minutes before markets open, suggesting that stocks will rise at the start of trading. Futures for the Dow Jones industrial average were up 34 points. Futures for the broader S&P 500 were up 5 points.
If Alcoa Inc. marked the symbolic start of the second quarter earnings season in the United States last week, this week marks the real start, with no less than eight blue chip firms reporting. These include JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Johnson & Johnson, International Business Machines Corp., General Electric Co. and Intel Corp.
With futures up, it might be tempting to conclude that investors have taken an upbeat view on this upcoming earnings parade. But the rise has more to do with an upgrade of Goldman Sachs Group Inc. - which also reports its earnings this week - from none other than Meredith Whitney, the analyst who turned incredibly bearish on financial stocks at the start of the bear market, becoming a superstar analyst in the process.
Ms. Whitney upgraded her recommendation on Goldman Sachs to a "buy" from "neutral" previously, with a 12-month price target of $186 (U.S.). The shares closed on Friday at $141.87, which means that the analyst's target implies a 30 per cent upside. However, keep in mind that since Ms. Whitney's "neutral" recommendation, which began on March 4, the shares have risen 66 per cent during one of the biggest stock market rebounds in decades - suggesting that she may have overplayed her bearish hand.
In Europe, the U.K.'s FTSE 100 was up 1.3 per cent and Germany's DAX index was up 1.9 per cent in afternoon trading. In Asia, Japan's Nikkei 225 fell 2.6 per cent in overnight trading.