Futures Slip on Greek Woes
U.S. equity futures slipped in early Wednesday trade as the
Troika of Greek lenders could not agree on a deal to cut Greek
debt further. Specifically, the IMF refused to concede any
further debt relief to Greece and conservative leaders such as
German ministers were unwilling to front any more funds. The
reports follow last week, where it appeared that leaders were
close to a deal.
In other news around the markets:
- The minutes of the recent Bank of England's Monetary Policy
Committee were released showing that the Bank is no where near
expanding its asset purchase program nor cutting rates despite
- Bank of Spain Governor Linde warned overnight that growth
is key to meeting Spain's deficit targets. Linde warns that
missing growth targets will lead to missed deficits and an
increase in the fiscal crisis.
- Germany auctioned 10-year bonds at a low yield of 1.4
percent, below the 1.56 percent yield of the previous auction.
The drop in yields follows France losing its Aaa rating with
- S&P 500 futures fell 2.6 points to 1,383.70.
- The EUR/USD was lower at 1.2780.
- Spanish 10-year government bond yields fell to 5.872
- Italian 10-year government bond yields rose to 4.868
- Gold rose 0.16 percent to $1,726.40.
Asian shares were mixed overnight in what appeared to be a
reversal of Tuesday's trading. The Japanese Nikkei Index rose
0.87 percent and the Shanghai Composite Index rose 1.07 percent
while the Hang Seng Index rose 1.39 percent in Hong Kong trading.
Also, the Korean Kospi fell 0.32 percent and Australian shares
dropped 0.37 percent.
European shares were lower in early Wednesday trade as leaders
failed to reach an agreement on Greece. The Spanish Ibex Index
fell 0.35 percent and the Italian MIB Index fell 0.12 percent
while Greek shares fell 0.07 percent. Meanwhile, the German DAX
fell 0.01 percent and the French CAC fell 0.09 percent while U.K.
shares dropped 0.11 percent.
Commodities were mixed overnight as positive growth signs in
Asia were weighed on by fears over Greece's finances. WTI Crude
futures rose 0.81 percent to $87.45 per barrel and Brent Crude
futures rose 1.02 percent to $110.95 per barrel. Copper futures
slipped 0.58 percent to $350.60 per pound, Gold was higher, and
silver futures rose 0.39 percent to $33.06 per ounce.
The U.S. dollar reigned overnight in currency markets, as
investors sold riskier currencies in exchange for the greenback,
signaling a clear risk-off tone. The EUR/USD was lower at 1.2780
and the dollar gained against the yen to 82.28, a 0.76 percent
gain. Overall, the Dollar Index rose 0.2 percent to 81.11 on
strength against the yen, the euro, the Swiss franc and the
pound. In addition, the Aussie dollar fell against the greenback
but did rise against the euro and the yen.
Stocks moving in the pre-market included:
- Hewlett-Packard (NYSE:
) shares rose 0.51 percent after dropping 11.95 percent Tuesday
as the company reported earnings, lowered guidance, and wrote
down nearly the entire purchase of software company Autonomy,
claiming the company was fraudulently misrepresenting its
financial statements prior to the purchase.
- News Corp (NASDAQ:
) shares rose 0.46 percent in pre-market trading as the company
agreed to purchase 49 percent of the YES Network, which carries
Yankees games and other sports content.
- Nike (NYSE:
) shares fell 0.59 percent pre-market after dropping 0.74
percent as the company announced that it is selling its Cole
Haan brand to Apax.
- Kripsy Kreme Doughnuts (NYSE:
) shares fell 0.54 percent after rising 23.47 percent Tuesday
on strong earnings and guidance.
The earnings calendar is rather light Wednesday. Notable
companies expected to report earnings Wednesday include:
- Deere and Company (NYSE:
) is expected to report fourth quarter EPS of $1.88 vs. $1.62 a
On the economics calendar Wednesday, the data docket is rather
full as some data normally released on Thursdays has been moved
up due to the Thanksgiving holiday. MBA Purchase Applications and
Initial Jobless Claims kick off the data, followed by the Markit
Initial U.S. PMI and consumer sentiment. Also, the Conference
Board's Leading Indicators are due out and the EIA Petroleum
Status Report is expected. The Treasury is also set to issue
benchmark 10-year TIPS.
Good luck and good trading.
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