U.S. Ahead, Stock futures trade higher ahead of opening bell

Investors around the world are looking at consumers for guidance on the global economic recovery, where the U.S economy is about to release its Retail Sales report for the month of February, which is projected to come below the previous reported estimate, but despite the expected slump in retail sales investors are targeting higher and more riskier assets, thus causing stocks to rise.

A handful of fundamentals will be released today after their absence throughout this week from the U.S economy, where the commerce department will release its Retail sales report for the month of February that is projected to show a drop of 0.2%; compared with the previous reported rise of 0.5% that was reported back in January.

In addition, the report is projected to show that the Retail Sales excluding Autos rose slightly by 0.1% in the same reported month, compared with the previous reported estimate of 0.6%, adding to that the Retail Sales excluding Autos & Gas that is projected to rise by 0.3% from the previous reported estimate of 0.6 percent.

Retail sales is projected to slump in the month of February, as other reports showed a big slump in activities in the U.S. especially consumer spending report, housing data and labor sector data and consumer income, which eventually leads to a drop in spending and as retail sales counts for nearly 50% of spending; thus retail sales report might actually slump more than projected and therefore investors will remain cautious till the release of the report, since volatility will dominate trading before investors set a general direction for trading.

High unemployment, along with tight credit conditions, slashed activities in the housing sector along with the manufacturing sector, despite both sectors continuing to recover from the worst financial crisis in decades, but both unemployment and credit conditions in the U.S are affecting consumer’s ability to increase their spending and businesses to expand their investments therefore retail sales that measures half of spending pattern in the U.S. which will be affected, especially with the upcoming deadline for most of the government and the Fed stimulus plans that is due to terminate by the end of the first quarter of this year.

In addition, the commerce department will release the business inventories for the month of January that is projected to rise by 0.1%, compared with the previous reported estimate of -0.2%. manufacturers continue to support growth in the U.S as it was obvious in the GDP estimate for the fourth quarter of 2009 as the U.S economy grew by 5.9 percent, merely due to the push it acquired from manufacturing rising activities over the past period, which helped them raise their inventory levels as improvement in economic conditions pressure spending in January to rise slightly.

Inventory levels will witness another setback in February where spending decline in that period compared with the month of January; therefore despite the slump expected by Retail Sales report; investors might find some relief from inventories report as it will most probably beat market expectations of 0.1 percent.

Finally, the U.S economy will release the preliminary reading for Uni. of Michigan confidence report, which is projected to show slight improvement in confidence and economic conditions where the report is projected to rise to 74.0, compared with the previous reported estimate of 73.6.

Confidence remains a major player in the U.S where it will help support economic activities in the upcoming months, where the future outlook of the economy will help investors seek risky investments and thus pressure the economy to report growth as its projected that the U.S economy will continue to recover from the worst financial crisis in seven decades throughout this year before it manages to reach its long term growth potentials by the year 2011.

As for stocks futures the DJIA futures were up by 28.0 points or 0.3 percent to trade at 10638 levels, meanwhile the S&P 500 future are trading 2.40 points higher at 1148.30 as for the NASDAQ 100 index future it was up by 2.25 points of 0.1 percent to trade at 1924.75 levels.