Futures Flat on Budget Negotiations
U.S. equity futures were flat in pre-market trading Friday as
Congressional leaders continue to search for a resolution to the
fiscal cliff. Republican leaders rejected a plan submitted by
President Obama, citing it as a rehash of former plans, but
Treasury Secretary Geithner is said to be discussing a deal with
leaders that encapsulates both tax increases and entitlement
In other news around the markets:
- Eurozone unemployment rose again in October to 11.7 percent
from 11.6 percent. The reading was in line with economist
- The massive drop in gold futures Wednesday morning,
according to Commerzbank, is to blame on a flash crash.
According to the Financial Times, over 430,000 gold futures
contracts traded Wednesday, equivalent to nearly half of the
world's annual production of gold.
- The German Parliament, the Bundestag, approved the revised
Greek aid bill Friday morning, clearing the way for the
disbursement of the next set of funds.
- S&P 500 futures were flat at 1,415.7.
- The EUR/USD was was higher at 1.3005.
- Spanish 10-year government bond yields rose to 5.401
- Italian 10-year government bond yields fell to 4.561
- Gold rose 0.03 percent to $1,730.20 per ounce.
Asian shares were mostly higher overnight on hopes of a U.S.
budget deal and stronger than expected industrial production in
Japan. The Japanese Nikkei Index rose 0.48 percent and the
Shanghai Composite Index rose 0.85 percent while the Hang Seng
Index rose 0.49 percent. According to Sarah Eisen of Bloomberg,
the Shanghai Composite Index is trading at its lowest valuation
ever. Also, the Korean Kospi slipped 0.1 percent and Australian
shares rose 0.63 percent.
European shares were mixed with weakness in the periphery
offset by strength in the core nations. The Spanish Ibex Index
fell 0.29 percent and the Italian MIB Index fell 0.22 percent.
Meanwhile, the German DAX rose 0.26 percent and the French CAC 40
rose 0.17 percent while U.K. shares rose 0.08 percent.
Commodities were mixed overnight with weakness seen in energy
futures. WTI Crude futures fell 0.25 percent to $87.85 per barrel
and Brent Crude futures fell 0.15 percent to $110.60 per barrel.
Copper futures rose 0.51 percent to $362.40 per pound. Gold was
higher and silver futures fell 0.39 percent to $34.31 per
Currency markets saw strong moves overnight, with the euro
strengthening and the yen weakening. The EUR/USD was higher at
1.3005 and the dollar rose against the yen to 82.64, a gain of 52
pips or 0.63 percent. Overall, the Dollar Index fell 0.07 percent
on weakness against the euro, the Swedish Krone, and the Swiss
franc despite the strength against the yen. Overall, the euro was
stronger, rising against most other currencies, and the yen was
also broadly weaker. The yen weakness can partially be attributed
to month-end flows being affected by M&A activity, including
the Softbank deal for Sprint (NYSE:
). The yen is also weakening following the announcement of a
small, $11 billion fiscal stimulus in Japan.
Stocks moving in the pre-market included:
- St. Jude Medical (NYSE:
) shares rose 2.34 percent overnight as the company authorized
a $10 billion share buyback program.
- Zynga (NASDAQ:
) shares fell over 10 percent pre-market as Facebook (NASDAQ:
) changed its agreement with ap developers, opening the way for
more competition for Zynga.
- Groupon (NASDAQ:
) shares fell 4.41 percent pre-market as investors feel that
CEO Andrew Mason will not be able to deliver on promises and
statements made earlier this week. Also, the Board of Directors
voted to keep Mason in his position as CEO.
- Green Mountain Coffee Roasters (NASDAQ:
) shares fell 0.44 percent after popping more than 25 percent
Wednesday on an earnings beat.
Notable companies expected to report earnings Friday
- Genesco (NYSE:
) is expected to report third quarter EPS of $1.33 vs. $1.21 a
- Patriot Transportation (NASDAQ:
) is expected to report fourth quarter EPS of $0.25 vs. $0.18 a
On the economics calendar Friday, the Personal Income and
Outlays report is expected to be released and the Chicago PMI is
to be released. In addition, Naryana Kocherlakota of the
Minneapolis Fed is set to speak.
Good luck and good trading.
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