Futures Rise on German Business Confidence
U.S. equity futures rose in pre-market trading following the
release of the German IFO Business Confidence Survey. The Survey
showed that German business leaders were more confident about the
future of the Eurozone economy than expected, with the index rising
to 107.4, beating expectations of a reading of 105 and better than
last month's 104.3.
In other news around the markets:
The European Union has cut its growth forecasts for 2013, slashing
estimates to a contraction of 0.3 percent from a previously
projected growth of 0.1 percent. German growth forecasts were cut
to 0.5 percent from 2 percent previously, French growth forecasts
were cut to 0.1 percent from 1.2 percent, and U.K. growth forecasts
were cut to 0.9 percent from 1.9 percent previously. The Bank of
England and the People's bank of China have confirmed that they are
in talks to set up 3-year swap lines aimed at financing trade and
direct investment and supporting financial stability. German fourth
quarter GDP was reported as contracting 0.6 percent in the fourth
quarter, in line with expectations, and growing 0.1 percent on an
annualized basis, also in line with expectations. S&P 500
futures rose 3.6 points to 1,504.80. The EUR/USD was was higher at
1.3208 following the German IFO data. Spanish 10-year government
bond yields fell to 5.17 percent after Spain reported that its
deficit widened to 10.2 percent in 2012. Italian 10-year government
bond yields fell to 4.46 percent. Gold rose 0.03 percent to
$1,579.30 per ounce.
Asian shares were mixed overnight as Chinese shares fell on
fears that the property market is overheating, which could lead to
the PBOC entering an earlier than anticipated tightening cycle. The
Japanese Nikkei Index rose 0.68 percent and the Shanghai Composite
Index fell 0.51 percent while the Hang Seng Index declined 0.54
percent. Notably, Chinese shares closed down almost 5 percent on
the week. Also, the Korean Kospi gained 0.18 percent and Australian
shares rose 0.76 percent.
European shares were higher following the strong IFO survey but
have given back some gains following the EU growth forecast cut.
The Spanish Ibex Index rose 0.96 percent and the Italian FTSE MIB
Index rose 0.7 percent. Meanwhile, the German DAX gained 0.42
percent while the French CAC rose 1.11 percent and U.K. shares
rallied 0.58 percent.
Commodities were slightly higher in early Friday trade after
taking a beating all week across the commodity complex. WTI Crude
futures rose 0.16 percent to $92.99 per barrel and Brent Crude
futures rose 0.68 percent to $114.29 per barrel. Copper futures
rose 0.15 percent to $357.55 per barrel. Gold was higher and silver
futures rose 0.26 percent to $28.78 per ounce.
Currency markets were rather quiet overnight as the Australian
dollar popped on a technical bounce. The EUR/USD was higher at
1.3208 and the dollar rose against the yen to 93.28 while the pound
sterling gained back against the dollar to 1.5258. Overall, the
Dollar Index fell 0.16 percent on weakness against the euro, the
pound, and the Swiss franc despite strength against the yen and the
Canadian dollar. Notably, the Australian dollar rose 0.69 percent
against the greenback on a technical bounce to 1.0316 and rose even
more against the yen.
Stocks moving in the pre-market included:
Hewlett Packard (NYSE:
) shares rose 5.61 percent after the company reported better than
expected earnings and disclosed no plans to break up the company.
American International Group (NYSE:
) shares rose 4.64 percent as the company also reported operating
earnings that beat analyst estimates but the company still reported
a loss due to claims resulting from Hurricane Sandy. Berkshire
Hathaway (NYSE: BRK-A)(NYSE: BRK-B) shares rose 1.28 percent
pre-market and remain just shy of the stock's all-time high as
investors see a wave of new acquisitions boosting Buffett's war
chest. Caterpillar (NYSE:
) shares rose 0.62 percent pre-market after declining 1.81 percent
Thursday as the company warned that comparable sales in January
slowed from a year ago.
Notable companies expected to report earnings Friday
Abercrombie & Fitch (NYSE:
) is expected to report fourth quarter EPS of $1.95 vs. $1.12 a
On the economics calendar Friday, Fed member Jerome Powell is
set to speak. Also, the ECRI weekly index is expected and Canadian
CPI is due out. Over the weekend, the Italian elections begin on
Sunday and polls close Monday with the first exit polls coming in
the afternoon following the closing of the polls. Momentum has been
on the side of former Prime Minister Silvio Berlusconi retaking
power, however there is a fear that the election could produce no
majority and a stalemate similar to the one seen in Greece over the
summer, only eight times larger.
Good luck and good trading.
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