U.S. equity futures fell in early Thursday trading despite
Chinese manufacturing data showing that China's manufacturing
sector continued to bottom. The official PMI was released at 50.2
for October, slightly lower than estimates of a 50.3 reading but
above the previous reading of 49.8, showing a return to growth.
Also, the HSBC Markit China Manufacturing PMI was released at
49.5, better then expectations of a 49.1 reading, which was the
same as September's reading, showing that China's manufacturing
sector contracted at a slower rate in October.
In other news around the markets:
- The British manufacturing PMI was released at 47.5, below
economist estimates of a 48.1 reading and below the previous
reading of 48.4.
- Australian commodity prices, a good measure of the strength
of exports from the country and also Chinese demand, fell 16
percent in September compared to a year ago, a larger rate of
contraction than the 15.7 percent annualized rate of
contraction seen in the month prior.
- Barclays (NYSE:
) energy trading unit has been fined once again by regulators,
this time for $470 million.
- S&P 500 futures fell 4.9 points to 1,401.90.
- The EUR/USD was lower at 1.2933.
- Spanish 10-year government bond yields were flat at 5.621
- Italian 10-year government bond yields were lower at 4.932
- Gold rose 0.19 percent to $1,722.30 per ounce.
Asian shares were mixed in overnight trading as Chinese shares
rose on the stronger than expected PMI data. The Japanese Nikkei
rose 0.21 percent and the Shanghai Composite Index rose 1.72
percent while the Hang Seng Index rose 0.83 percent in Hong Kong
trading. The Korean Kospi fell 0.71 percent despite stronger than
expected domestic PMI data and Australian shares fell 1.31
percent on weak import price and commodity price data.
European shares were also mixed in early Thursday trading as
core stocks rose and peripheral shares fell. The Spanish Ibex
Index fell 0.49 percent and the Italian MIB Index fell 0.21
percent in Milan. Also, the German DAX rose 0.05 percent while
the French CAC fell slightly by 0.03 percent and the U.K. FTSE
rose 0.18 percent.
Commodities were mostly higher in early Thursday trading with
Brent Crude futures bucking the trend. WTI Crude futures rose 0.1
percent to $86.33 per barrel and Brent Crude futures fell 0.17
percent to $108.51 per barrel. Yesterday, OPEC countries released
production data, showing that Iranian oil output has fallen to
the lowest rate since 1990, a sign that economic sanctions are
hurting. Copper futures rose 0.54 percent to $353.65 despite weak
economic data from Australia. Gold was higher and silver futures
rose 0.41 percent to $32.45.
Currency markets were in risk-off mode as dollar strength
reigned and the euro and the Aussie dollar sold off. The EUR/USD
was lower at 1.2933 and the dollar rose against the yen to 79.78.
Overall, the Dollar Index rose 0.18 percent on strength against
the euro, the yen, the Canadian dollar and the Swiss franc.
However, the greenback was weak against the British pound. Also,
the Aussie dollar was broadly weak save for against the euro, for
against which it gained 0.15 percent.
Stocks moving in the pre-market included:
- Joy Global (NYSE:
) shares rose 0.48 percent pre-market as strength in China
boosted the company's price.
- Valero (NYSE:
) shares fell 0.48 percent in pre-market trading despite data
showing that energy inventories may have fallen in the past
week, meaning there is more demand than anticipated.
- Home Depot (NYSE:
) shares fell 0.44 percent pre-market after rising 2.23 percent
Wednesday as investors hoped that people suffering from the
effects of Sandy would have to shop at home improvement store
- Linkedin (NYSE:
) shares rose 0.3 percent pre-market ahead of its earnings
There are several notable companies expected to report
earnings Thursday, including:
- Enterprise Products Partners (NYSE:
) is expected to report third quarter EPS of $0.60 vs. $0.55 a
- HCA Holdings (NYSE:
) is expected to report third quarter EPS of $0.79 vs. $0.60 a
- Linkedin (NYSE:
) is expected to report third quarter EPS of $0.11 vs. $0.06 a
- Marathon Petroleum Corp. (NYSE:
) is expected to report third quarter EPS of $3.24 vs. $3.16 a
- ON Semiconductor (NASDAQ:
) is expected to report third quarter EPS of $0.14 vs. $0.24 a
- Priceline Inc. (NASDAQ:
) is expected to report third quarter EPS of $11.81 vs. $9.95 a
- Starbucks (NASDAQ:
) is expected to report fourth quarter EPS of $0.45 vs. $0.37 a
On the economic calendar Thursday, lots of economic data is
due out ahead of Friday's Non-Farm Payroll report. Challenger Job
Cuts, ADP Employment, Initial Jobless Claims, and the ISM
Manufacturing Index will give light on the state of the
employment market in the U.S. Also, the ISM and the Markit U.S.
PMI are due out along with construction spending and consumer
confidence which will all give insight into the state of the
broad economy. Lastly, motor vehicle sales and chain store sales
are expected. Investors will also get information on the state of
monetary policy in the U.S. as the Fed's Eric Rosengren and
Dennis Lockhart are scheduled to speak.
Good luck and good trading.
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