US futures are pointing to a positive start on Tuesday

US futures are pointing to a positive start on Tuesday, as investors once again turn their attention to corporate earnings season in the absence of any meaningful economic data.

So far, earnings season has been much better than was expected following a difficult first quarter for the US. More companies have topped earnings expectations than the long running average so it’s been a very good start. The flipside of that is that expectations were lowered heavily in the run up to the season and we’ve heard from a lot of financial firms which were expected to perform well.

Energy companies, large multi-nationals and retailers were always the ones facing a tough earnings season on account of tumbling energy prices, a strong dollar and weather-related sales declines, respectively. With many of these still to report in the coming weeks, I think we’ll see a lot of pessimism yet and the consensus is still that overall profits will decline. This could weigh on the dollar in the coming weeks, although with Greece looking increasingly on the brink of defaulting, it could face a race to the bottom with the euro. In fact, it’s safe haven status may even offer some protection to the dollar, although I expect traders may look elsewhere, such as the yen or the swissy,

The eurogroup meeting this Friday was meant to be the deadline for a list of reforms to be passed by Greece and approved by its creditors but this looks incredibly unlikely now. Not only are both sides clearly miles apart in their demands, the rhetoric from senior eurozone officials has been far from optimistic and now Greece has taken extreme measures to raise the funds needed to honor upcoming financial commitments.

Yesterday’s government decree which gave it the power to raid the reserves of all public purses in order to raise around €2 billion was a desperate effort to say the least. Aside from giving a clear sign that an agreement on Friday is extremely unlikely, it also highlighted the weakness of their position. If they are having to resort to such desperate measures, they have few options left and they either have to accept the offer on the table or default. If they default, a massive financial crisis could quickly follow as the ECB may be forced to withdraw its emergency liquidity assistance to Greek banks. We can only hope it doesn’t get to that point.

The S&P is expected to open 5 points higher, the Dow 52 points higher and the Nasdaq 18 points lower.