U.S. equity futures fell in early Friday trading as large
companies including Apple (NASDAQ:
) and Amazon (NASDAQ:
) reported earnings Thursday that missed analyst estimates. Apple
reported sales that beat expectations but earnings missed and
Amazon reported its first quarterly loss in years. S&P 500
futures fell below 1,400 on the recent string of weak
In other news around the markets:
- The Japanese government announced a new round of stimulus
measures totaling 422.6 billion yen, or $5.3 billion, as the
country looks to boost growth from its decades-long stagnation.
Economists are looking for the Bank of Japan to act next week
in tandem with the fiscal authorities.
- Spain's unemployment rate rose to 25.0 percent in the third
quarter, up from 24.6 percent in the third quarter and slightly
below economist expectations of 25.1 percent.
- The IMF has finally admitted that Greece cannot meet its
targets as set under the current bailout agreement and it
appears that Greece will get an extra two years to pay back the
- ECB Governor Jorg Asmussen spoke overnight, saying that the
new OMT program is not inflationary and that the aid request
does not automatically trigger bond purchases, rather it is
just one condition. Also, on China, he said that some local
governments are effectively bankrupt and that the rich-poor
divide continues to grow, not shrink.
- Standard and Poor's downgraded BNP Paribas to A+ from AA-
and lowered its outlook on Credit Agricole and Societe
Generale, the other two French mega-banks.
- S&P 500 futures fell 10.3 points to 1,397.90.
- The EUR/USD was slightly higher at 1.2939.
- Spanish 10-year government bond yields rose to 5.672
- Italian 10-year government bond yields rose to 4.907
- Gold fell 0.47 percent to $1,705.00 per ounce.
Asian shares were weaker overnight despite the new stimulus
measures in China, weighed down by weak earnings from U.S.
mega-companies such as Apple. The Japanese Nikkei Index fell 1.35
percent and the Shanghai Composite Index fell 1.68 percent. In
addition, the Hang Seng Index fell 1.21 percent in Hong Kong and
the Korean Kospi fell 1.72 percent as the Korean government
announced weak third quarter GDP. Australian shares also fell
European shares were lower in early Friday trading, weighed
down by fears over the finances of Greece and Spain. The Spanish
Ibex Index fell 0.85 percent while the Italian MIB Index fell
0.55 percent. Also, the German DAX fell 0.37 percent and the
French CAC fell 0.47 percent, weighed down by the bank
downgrades. U.K. shares also fell 0.56 percent just one day after
the strong GDP report.
Commodities were weak overnight on global growth fears. WTI
Crude futures fell 0.72 percent to $85.43 per barrel and Brent
Crude futures slipped 0.44 percent to $108.10 per barrel. Copper
futures also fell on global weakness with futures falling 0.44
percent to $353.50 per pound. Gold was lower and silver futures
fell 0.93 percent to $31.78 per ounce.
Currency markets did not echo the strong risk-off tone seen in
other markets overnight, as the dollar was effectively flat in
overnight trading and moves remained tepid. The EUR/USD was
slightly higher and the dollar fell against the yen, sending the
pair back below 80. Overall, the Dollar Index was flat at 80.04
with the dollar gaining against its Canadian counterpart and the
Swedish krona and falling against the euro and the yen. The
Aussie dollar was slightly weak against a basket of currencies,
the only risk-off sign in currency markets.
Stocks moving in the pre-market included:
- Amazon shares fell 1.4 percent pre-marekt following weak
- Boston Scientific (NYSE:
) shares rose 0.78 percent in pre-market trading after positive
comments from Seeking Alpha.
- Yum! Brands (NYSE:
) fell 1.7 percent pre-market as investors fear that one of its
strongest units, its Asian arm, is set to see growth rates
continue to slow.
- Freeport-McMoRan (NYSE:
) fell 1.33 percent pre-market as analysts warned on its
There are several notable companies reporting earnings Friday,
- Coventry Health (NYSE:
) is expected to report third quarter EPS of $0.73 vs. $0.82 a
- Lear Corp (NYSE:
) is expected to report third quarter EPS of $1.19 vs.
- Merck and Co. (NYSE:
) is expected to report third quarter EPS of $0.93 vs. $0.94 a
- Weyerhaeuser (NYSE:
) is expected to report third quarter EPS of $0.18 vs. $0.12 a
On the economic calendar Friday, the initial estimate of third
quarter GDP for the U.S. is due out as well as consumer sentiment
Good luck and good trading.
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