Futures Slip on Chinese Inflation Data
U.S. equity futures were slightly lower in overnight trade as
Chinese inflation data revealed that the PBOC may have less room to
engineer a soft-landing than previously thought. Data showed that
consumer inflation accelerated in the previous month, spooking
investors and creating fears that China will have to go through
another rate hike cycle.
In other news around the markets:
Japanese authorities unveiled a $116 billion stimulus package as
part of broader efforts to stimulate the economy and devalue the
yen. Spanish industrial production plummeted in November, falling
at a 7.2 percent annualized rate in November, well below economist
expectations of a decline of 1.5 percent annualized and worse than
October's upwardly revised -3.1 percent. Moody's downgraded Cyprus
to Caa3 from B3 as the country is in bailout talks with the EU
following its exposure to Greek banks. The new rating is only two
notches above default. S&P 500 futures fell 2.4 points to
1,464.80. The EUR/USD was slightly lower at 1.3268. Spanish 10-year
government bond yields fell to 4.892 percent. Italian 10-year
government bond yields fell to 4.15 percent. Gold fell 0.54 percent
to $1,669.00 per ounce.
Asian shares were mixed overnight as Japanese shares rallied on
stimulus hopes while Chinese shares fell on inflation fears. The
Japanese Nikkei Index rose 1.4 percent while the Shanghai Composite
Index fell 1.78 percent and the Hong Seng Index fell 0.39 percent.
Also, the Korean Kospi fell 0.5 percent and Australian shares fell
European shares were lower in early trade following weak
industrial production data for various countries across the EU. The
Spanish Ibex Index fell 0.4 percent and the Italian MIB Index
slipped 0.52 percent in early European trade. Meanwhile, the German
DAX fell 0.1 percent and the French CAC fell 0.49 percent while
U.K. shares declined 0.05 percent.
Commodities were weaker overnight following the worrying Chinese
inflation data. WTI Crude futures fell 0.27 percent to $93.56 per
barrel and Brent Crude futures fell 0.6 percent to $111.22 per
barrel. Copper futures fell 0.73 percent to $368.20 per pound as
investors worried that China will not grow as fast as expected,
hampered by strong inflation. Gold was lower and silver futures
fell 0.69 percent to $30.71.
Currency markets were relatively tepid overnight with moves of
major pairs constrained to tight ranges. The EUR/USD was slightly
lower at 1.3268 and the dollar gained against the yen. Overall, the
Dollar Index rose 0.08 percent on strength against the pound, the
yen, and the Swiss franc.
Stocks moving in the pre-market included:
American Express (NYSE:
) shares fell 0.46 percent pre-market as the company announced a
new round of layoffs and other cost cutting measures Thursday. Ford
) shares rose 1.95 percent pre-market as the company increased its
dividend and Standard and Poor's said that the dividend hike did
not affect its credit rating. Yum! Brands (NYSE:
) shares fell 1.13 percent pre-market as the company released a
formal apology for mistakes made in China and also as Chinese
inflation spooked investors. Toyota Motor Corp. (NYSE:
) shares fell 1.03 percent pre-market despite stimulus talks in
Notable companies expected to report earnings Friday
Wells Fargo (NYSE:
) is expected to report fourth quarter EPS of $0.90 vs. $0.73 a
On the economics calendar Friday, trade balance data and import
and export prices are due out. Also, the Fed's Charles Plosser is
expected to speak and the Treasury is expected to release its
periodic budget statement. Early Monday, look for the French budget
statement and British inflation data to move markets.
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice.
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