Futures Lower On Chinese Growth, Italian Political Fears
U.S. equity futures slipped in early pre-market trade Monday as
China's economy took a setback in March and Italy's political
crisis flared over the weekend. China's manufacturing sector grew
slower than expected in March, with the official China
Manufacturing PMI rising to 50.9 in March from 50.1 in February on
expectations of a reading of 52. Also, the HSBC China Manufacturing
PMI for March slipped to 51.6 from 51.7 in February on expectations
of a reading of 51.7.
In other news around the markets:
Italy's political crisis flared over the weekend as President
Napolitano threatened to step down from office early, only to later
backtrack on the comments. Should he resign early, it could disrupt
the most likely needed next round of elections in Italy. Cyprus'
President Anastasiades could be thrust to the center of the crisis
in the near future as new reports surfaced that his in-laws
transferred out of the country 21 million euros just days before
the country's banks were shuttered. HSBC's Chief Economist Paul
Bloxham, in comments on Australia, says that he sees the easing
cycle as over and even says that markets could see rate hikes from
the RBA as early as Q4 2013. This would be bullish for the
Australian dollar and is a bullish signal for the global economy
considering Australia's ties to China economically. S&P 500
futures fell 2.5 points to 1,560.00. The EUR/USD was lower at
1.2816. Spanish 10-year government bond yields were flat at 5.06
percent. Italian 10-year government bond yields were flat at 4.76
percent. Gold rose 0.12 percent to $1,598.00 per ounce.
Asian shares were lower overnight on weak economic data from
both China, with the weaker than expected manufacturing PMI's, and
Japan, with the Tanken Industry Surveys showing weakness as well.
The Japanese Nikkei Index fell 2.12 percent and the Shanghai
Composite Index declined 0.1 percent. Also, the Korean Kospi lost
European shares were closed Monday for the Easter Monday
Commodities were lower overnight on global growth fears
following the weak Asian data. WTI Crude futures declined 0.46
percent to $96.75 per barrel and Brent Crude futures fell 0.33
percent to $109.66 per barrel. Copper futures fell 1.43 percent
overnight to $334.95 per pound following weakness in Chinese
equities. Gold was higher and silver futures fell 1.14 percent to
$27.98 per ounce.
Currency markets were mostly flat overnight save for the yen
crosses which saw massive yen strength overnight on fears that
easing hopes may not be producing results. The EUR/USD was lower at
1.2816 and the dollar fell against the yen to 93.55. Overall, the
Dollar Index declined 0.07 percent on weakness against the yen, the
pound, and the Canadian dollar. Notably, the major yen crosses all
fell below 0.7 percent, showing massive yen strength in an
otherwise quiet market.
Stocks moving in the pre-market included:
) shares rose 0.4 percent pre-market on positive comments from a
Motley Fool post highlighting the stock as a favorite of Warren
Buffett. General Mills (NYSE:
) shares fell 0.63 percent on fears of inflating input costs as
commodities guru Jim Rodgers sees strong inflation in the near
future in grains and agricultural commodities. Pfizer (NYSE:
) shares rose 0.14 percent pre-market after last week's European
Commission approval of a new leukemia drug called BOSULIF.
Notable companies expected to report earnings Monday
Cal-Maine Foods (NASDAQ:
) is expected to report third quarter EPS of $1.40 vs. $1.09 a year
On the economics calendar Monday, Motor Vehicle Sales data will
be released throughout the day as well as the Markit U.S. PMI this
morning. Also, the ISM Manufacturing PMI is expected to be released
and Construction Spending data will also be released. In addition,
the Treasury is set to auction 4-week, 3-month, and 6-month bills.
Overnight, the RBA will release its interest rate decision, Spanish
unemployment, and Eurozone Manufacturing PMIs in Europe will be
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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