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US Market Open Contingent On ECB

Published 22/01/2015, 10:14

Positive earnings growth from eBay is lifting sentiment before the open of US markets on Thursday but the final direction of share prices is likely to be determined overseas when ECB President Mario Draghi is anticipated to reveal the details of a quantitative easing program for the Eurozone.

eBay Inc (NASDAQ:EBAY) beat earnings estimates and announced plans to slash 2,400 jobs as well as the intension to split-off its eBay enterprise unit following the previous announcement to split off PayPal. The news was well received and is expected to push eBay shares higher on the open. EBay and PayPal each face growing competition within their respective industries and it is thought both will be better off apart.

A rearrangement of corporate governance rules will also set the stage for PayPal to perhaps merge with competitors to form a bigger presence in the mobile payments industry.

Shares in Sprint Corp (NYSE:S) and T-Mobile US Inc (NYSE:TMUS) may be set to build on gains on the reported plans by Google Inc (NASDAQ:GOOGL) to sell mobile phones directly to customers and offer phone plans through the two mobile networks. The brand power of Google should attract a lot of new mobile phone customers and is a definite coo for the networks Google uses to manage the plans.

The longer term threat to the networks is that once established Google decides to break out on its own and setup its own mobile network, perhaps via new technology such as Wi-Fi or satellites.

There is a flood of earnings reports expected on Thursday including releases from Verizon Communications Inc (NYSE:VZ), Travelzoo Inc (NASDAQ:TZOO), Starbucks Corporation (NASDAQ:SBUX), Capital One Financial Corporation (NYSE:COF) and Southwest Airlines Company (NYSE:LUV).

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Crude oil inventories data is released at 4pm GMT and is likely to impact the sustainability of the recent move higher in oil prices which could read across to oil stocks and equity benchmarks.

Futures suggest the:

S&P 500 will open 5 points higher at 2,037 with the

Dow expected to open 46 points higher at 17,600 and the

NASDAQ Composite 6 points higher at 4,198.

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