S&P futures surge at open after China’s yuan move

NEW YORK (BestGrowthStock) – S&P 500 stock index futures rose sharply at the start of trade on Sunday as investors bet China’s announcement over the weekend to make the yuan more flexible will lift sales at U.S. multinationals over the long-term.

The rise suggests indexes will open higher on Monday and follows a strong start of trade for the Australian dollar and euro as China’s move signals more yuan appreciation and was taken as a vote of confidence in the global economic recovery’s staying power.

The revaluation will effectively increase the purchasing power of Chinese buyers and “the best bet would be for commodity-based companies and consumer goods companies,” said Tom Sowanick, chief investment officer at Omnivest Group in Princeton, New Jersey earlier on Sunday.

S&P 500 futures jumped 13.80 points to 1123.90 and were well above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

On Friday, the Dow Jones industrial average (.DJI: ) gained 16.47 points, or 0.16 percent, to close at 10,450.64. The Standard & Poor’s 500 Index (.SPX: ) rose 1.47 points, or 0.13 percent, to end at 1,117.51 and the Nasdaq Composite Index (.IXIC: ) added 2.64 points, or 0.11 percent, to close at 2,309.80.

Major indexes ended up for the second straight week last week even though housing and labor market data raised concerns about the fragility of the recovery. The S&P 500 closed above its 200-day moving average for the third straight session on Friday, which suggests resilience.

Investment

(Reporting by Chris Sanders; Editing by Marguerita Choy)

S&P futures surge at open after China’s yuan move