Futures Lower Ahead of Non-Farm Payrolls, Lower EU Outlook
U.S. equity futures traded lower in early pre-market trade ahead
of the Non-Farm Payrolls report for April and following the EU
Commission cutting its growth forecasts. Looking at Non-Farm
Payrolls, economists surveyed by Bloomberg are expecting the
economy to have added 153 thousand jobs, with the range of
estimates wide between 100 and 200 thousand jobs. The private
sector is expected to have added 175 thousand jobs and the
unemployment rate is expected to remain flat at 7.6 percent.
In other news around the markets:
The European Commission has released its revised growth forecasts
for 2013 and 2014 and now expects the eurozone to contract 0.4
percent this year before expanding 1.2 percent next year. Notably,
France, Italy, and Spain are all expected to contract this year
before returning to growth in 2014. France and Spain will also miss
deficit targets this year. European Central Bank President Mario
Draghi announced new easing measures Thursday, including a 25 basis
point cut to the main refi rate to 0.5 percent as well as a 50
basis point cut to the Marginal Lending Rate to 1.00 percent. Also,
Draghi announced that the bank will extend its overnight lending
program to banks by a full year through 2014 and would consider
negative deposit rates should the economy worsen. China's official
services PMI dropped to 54.5 in April from 55.6 in March. However,
the British services PMI rose unexpectedly to 52.9 from 52.4 in
March on expectations of a flat reading. The Bank of Canada
announced that Stephen Poloz has been named the new central bank
chief. He is currently the head of a government finance agency
responsible for export controls and has usurped the likely favorite
and out-going Governor Mark Carney's right-hand man Tim Macklem for
the post. S&P 500 futures fell 2.1 points to 1,590.20. The
EUR/USD was higher at 1.3121 after plummeting post-Draghi Thursday.
Spanish 10-year government bond yields fell 5 basis points to 4.01
percent. Italian 10-year government bond yields fell 3 basis points
to 3.73 percent. Gold rose 0.57 percent to $1,476.00 per ounce.
Asian shares were mostly higher overnight as Chinese shares
rallied following the ECB easing efforts, as the eurozone is
China's largest trade partner, and Japanese markets were closed for
a holiday. The Shanghai Composite Index rose 1.45 percent and the
CSI 300 Index rose 1.77 percent while the Hang Seng Index gained
0.1 percent. Also, the Korean Kospi rose 0.43 percent and
Australian shares were flat.
European shares were mixed following the revised EC growth
forecasts. The Spanish Ibex Index rose 0.29 percent and the FTSE
MIB Index fell 0.31 percent. Meanwhile, the German DAX gained 0.07
percent and the French CAC 40 fell 0.17 percent while U.K. shares
rose 0.08 percent.
Commodities were mixed as energy futures lagged and metals rose.
WTI Crude futures fell 0.28 percent to $93.73 per barrel and Brent
Crude futures fell 0.31 percent to $102.53 per barrel. Copper
futures rallied sharply by 2.72 percent to $318.90 per pound on
easing efforts globally. Gold was higher and silver futures rose
0.94 percent to $24.06.
Currency markets were on the move overnight ahead of the
Non-Farm Payrolls report with the euro bouncing post-Draghi and the
yen sliding despite Japanese markets being closed overnight. The
EUR/USD was higher at 1.3121 and the dollar rose against the yen to
98.17. Overall, the Dollar Index fell 0.26 percent on weakness
against the euro, the yen, and the Swiss franc.
Earnings Reported Yesterday
Key companies that reported earnings Thursday include:
American International Group(NYSE:
) reported first quarter EPS of $1.34 vs. $0.87 expected. Fortress
Investment Group (NYSE:
) reported first quarter EPS of $0.05 vs. $0.15 on revenue of
$244.0 million vs. $218.79 million expected. General Motors (NYSE:
) reported first quarter EPS of $0.67 vs. $0.54 on revenue of $36.9
billion vs. $36.0 billion expected. Kraft Foods (NASDAQ:
) reported first quarter EPS of $0.76 vs. $0.64 on revenue of 4.5
billion vs. $4.49 billion expected. LinkedIn (NYSE:
) reported first quarter EPS of $0.45 vs. $0.31 on revenue of
$324.7 million vs. $317.08 million and lowered guidance. Teva
) reported first quarter EPS of $1.11 vs. $1.10 on revenue of $4.9
billion vs. $4.85 billion expected.
Stocks moving in the pre-market included:
American International Group (NYSE:
) shares rose 2.78 percent pre-market following its stronger than
expected earnings report. Freeport-McMoRan Copper and Gold (NYSE:
) shares rallied 0.69 percent pre-market on stronger copper prices.
) shares declined 9.98 percent pre-market following the company's
lowered guidance. Kraft (NASDAQ:
) shares rose 1.98 percent pre-market following the stronger than
expected earnings report.
Notable companies expected to report earnings Friday
CBOE Holdings (NASDAQ:
) is expected to report first quarter EPS of $0.44 vs. $0.37 a year
ago. Duke Energy (NYSE:
) is expected to report first quarter EPS of $1.04 vs. $1.14 a year
ago. Moody's Corporation (NYSE:
) is expected to report first quarter EPS of $0.85 vs. $0.76 a year
ago. Madison Square Garden (NYSE:
) is expected to report third quarter EPS of $0.33 vs. $0.40 a year
On the economics calendar Friday, aside from the Employment
Situation Report, factory orders and the ISM Non-Manufacturing
Index are set to be released as well as the ECRI Weekly Index.
Also, the Fed's Daniel Tarullo and Jeffery Lacker are set to
Good luck and good trading.
to view the market wrap for Thursday, May 2.
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