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Pre-Market Primer: Stocks Rise Amidst More Grexit Speculation

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Which way is the wind blowing in this week's European Union summit?

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MINYANVILLE ORIGINAL Stock futures headed higher today on better-than-expected US retail sales
Retail sales in the United States rose 1.1% on a monthly basis in September, after rising 0.9% in August. Economists predicted an increase of 0.7%. Excluding autos and gasoline, sales increased by 0.9% versus the forecast of 0.5%. The New York Federal Reserve Board's Empire State Manufacturing Index for October improved over September's -10.41 to -6.41.

The Dow Jones Industrial Average (INDEXDJX:.DJI) gained 0.39% to 13,297.00, S&P 500 (INDEXSP:.INX) gained 0.53% to 1,429.10 and Nasdaq (INDEXNASDAQ:.IXIC) futures rose 0.69% to 2,728.75.

Speculation of a Greek exit from the eurozone is back in focus at the European Union's summit in Brussels this Thursday. Swedish finance minister Anders Borg very frankly predicted a "Grexit" in the next six months, saying, "[I]n practice everyone already understands which way the wind is blowing."

The bond markets, however, are showing faith in Greece. Today, the 10-year yield on Greek debt fell to 17.5%, the lowest level since the country's debt restructuring in March. This follows a broad trend of Greek debt rallying since March.

At the two-day summit, EU leaders will also discuss matters such as banking union integration, fiscal budget unification, and the looming bailout of Spain. Rumors of a joint loan program for Greece, Spain, and Cyprus are circulating ahead of the meeting.

Over the weekend, a report on Chinese inflation showed that China still has room to ease policy with more pro-growth measures. Consumer prices increased by just 1.9% on a yearly basis.

Sprint (NYSE:S) shares jumped more than 8% after Japanese telecommunications firm Softbank confirmed that it will take a 70% stake in Sprint. Japanese investors punished Softbank, as shares dropped 8%. Sprint is the third-biggest mobile operator in the United States.

"This is pro-competitive and pro-consumer in the US because it creates a stronger No. 3," Sprint CEO Dan Hesse told reporters in Tokyo. "It competes with the duopoly of AT&T (NYSE:T) and Verizon (NYSE:VZ). When you look at what Softbank has accomplished in Japan with the No. 3 carrier, it's something we can learn from."

Citigroup (NYSE:C) will report earnings after the bell today. Despite peers JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE:WFC) beating expectations for the past quarter, analysts are concerned that profit margins for the big nationwide lenders are shrinking. Citigroup shares advanced slightly before the bell.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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