U.S. Stocks Set To Open Higher As Traders Bet On Robust Recovery

Strong Manufacturing PMI Reports Lift Market Mood Around The World

S&P 500 futures are gaining ground in premarket trading after Manufacturing PMI reports for China and Euro Area indicated that the economic rebound continued.

China’s Manufacturing PMI increased from 52.8 in July to 53.1 in August compared to analyst consensus of 52.6.

Euro Area Manufacturing PMI was in line with analyst expectations, declining from 51.8 in July to 51.7 in August but remaining in the positive territory.

Today, traders will also have a chance to evaluate U.S. Manufacturing PMI data. Analysts expect that U.S. Manufacturing PMI will increase from 50.9 in July to 53.6 in August.

Traders continue to bet on a fast economic rebound supported by the unprecedened monetary stimulus. In this situation, all decent economic reports serve as additional positive catalysts and push stocks higher.

Shares Of Zoom Video Communications Are Set To Open At All-Time Highs

Zoom reported its quarterly results yesterday after the market close, and its shares are currently gaining almost 40% in premarket trading.

Zoom reported revenue of $663.5 million and GAAP earnings of $0.63 per share, easily beating analyst estimates. The company also provided guidance for the third quarter, expecting revenue of $685 million – $690 million and earnings of $0.73 – $0.74 per share.

Analysts rushed to upgrade the stock as the shift to remote work and increased usage of video conferencing appears to be sustainable. Given the current premarket indications, Zoom shares will have a very active trading session today.

U.S. Dollar Remains Under Serious Pressure

The decline of the U.S. dollar is an additional positive catalyst for stocks, especially in the commodity-related space. The U.S. Dollar Index has managed to get below the 92 level and continues its downside move, pushing oil, gold, silver, copper prices higher.

Interestingly, even weak inflation data in the Euro Area did not provide any support to the American currency. Euro Area Inflation Rate was -0.4% month-over month in August, suggesting that the EU economy may need additional stimulus in order to push prices higher.

Traders remain focused on Fed’s decision to aim for an average inflation of 2% and prepare themselves for years of low rates in the U.S. so they ignore short-term data suggesting that other developed countries will have to expand their stimulus programs. If this trend continues, stocks and commodities will get an additional boost.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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