Futures Lower on Weak Chinese Economic Data
U.S. equity futures traded sharply lower in the pre-market
following Friday's sell off on weaker than expected economic data
from China. China reported that first quarter GDP grew at a 7.7
percent annualized rate vs. 8.0 percent expected, while industrial
production only grew 8.9 percent vs. 10.1 percent expected. Also,
retail sales for March grew 12.4 percent vs. the same period a year
ago, less than forecasts of 12.6 percent growth, and fixed asset
investment excluding rural investment grew only 20.9 percent vs.
21.3 percent expected.
In other news around the markets:
The eurozone's trade balance for February grew to 10.4 billion
euros from a downwardly revised 4.7 billion euro deficit in
January, better than forecasts of a 3 billion euro surplus.
Greece's finance minister Stournaras has reached a deal with a
Troika over the nation's bail-out review, paving the way for the
lenders to release the next 2.8 billion bailout tranche to the
country. Venezuelans elected Nicolas Maduro, the former
Vice-President under the regime of Hugo Chavez, President in a
narrow victory, restoring the previous regime to power. Maduro is
expected to keep similar policies in place as his predecessor
representing little change for multinationals operating in the
country. S&P 500 futures dropped 6.1 points to 1,575.30. The
EUR/USD was lower at 1.3074. Spanish 10-year government bond yields
rose to 4.7 percent from 4.69 percent. Italian 10-year government
bond yields rose to 4.34 percent from 4.33 percent. Gold continued
its sharp decline to $1,394.70 per ounce, losing an additional 7.1
Asian shares traded sharply lower overnight following the weaker
than expected Chinese data as well as comments from a former Japan
advisor to George Soros, Takeshi Fujimaki, who said that Japan's
new policies will fail and the market will ultimately crash as the
government defaults. The Japanese Nikkei Index declined 1.55
percent and the Shanghai Composite Index fell 1.12 percent while
the Hang Seng Index fell 1.43 percent. Also, the Korean Kospi
declined 0.2 percent while Australian shares lost 0.91 percent.
European shares also traded lower following the Asian weakness
creating global growth fears. The Spanish Ibex Index fell 0.84
percent and the Italian FTSE MIB Index declined 0.92 percent.
Meanwhile, the German DAX fell 0.66 percent and the French CAC fell
0.82 percent ahead of a 7.7 billion euro bill auction in France
while U.K. shares lost 0.94 percent.
Commodities were taking it on the proverbial chin overnight in
what can only be described as continued margin selling weighing on
prices in a clear risk-off environment. WTI Crude futures plummeted
2.87 percent to $88.98 per barrel and Brent Crude futures fell in
tandem by 2.14 percent to $101.05 per barrel. Copper futures
dropped 2.27 percent to $328.75 per pound on continued excess
supply fears and now also demand fears from China. Gold was sharply
lower and silver futures dropped an astonishing 10.05 percent to
$23.74 per ounce.
Currency markets echoed the risk-off mood from commodities
overnight as the yen and dollar gained and the euro dropped. The
EUR/USD was lower at 1.3074 and the dollar fell against the yen to
98.03. Overall, the Dollar Index gained 0.02 percent on strength
against the euro, the pound, the Canadian dollar, and the Swiss
franc. Notably, the euro lost 0.69 percent against the yen and the
Aussie dollar weakened across the board on Chinese fears.
Earnings Reported Yesterday
Key companies that reported earnings Friday include:
J.P. Morgan Chase (NYSE:
) reported first quarter EPS of $1.59 vs. $1.39 expected on revenue
of $25.12 billion, which was weaker than forecasts of $25.94
billion. Wells Fargo (NYSE:
) reported first quarter EPS of $0.92 vs. $0.88 expected on revenue
of $21.26 billion vs. $21.6 billion expected.
Stocks moving in the pre-market included:
Life Technologies (NASDAQ:
) shares gained 5.93 percent pre-market after the Wall Street
Journal reported that Thermo Fisher Scientific (NYSE:
) was close to purchasing Life for close to $13 billion, or about
$76.30 per share. Goldcorp (NYSE:
) shares fell 6.00 percent pre-market as gold prices slid below
$1,400.00 per ounce. Silver Wheaton (NYSE:
) shares fell 8.54 percent pre-market as silver prices skidded more
than 10 percent overnight. Freeport-McMoRan Copper and Gold (NYSE:
) shares fell 4.45 percent pre-market as copper prices fell and
also on fears that Chinese copper demand is slowing as growth
Notable companies expected to report earnings Monday
) is expected to report first quarter EPS of $1.19 vs. $1.11 a year
ago. American Electric Power (NYSE:
) is expected to report first quarter EPS of $0.81 vs. $0.80 a year
ago. Charles Schwab (NYSE:
) is expected to report first quarter EPS of $0.16 vs. $0.15 a year
ago. Heartland Express (NASDAQ:
) is expected to report first quarter EPS of $0.19 vs. $0.19 a year
ago. M&T Bank (NYSE:
) is expected to report first quarter EPS of $1.96 vs. $1.50 a year
On the economics calendar Monday, the Empire State Manufacturing
Index is expected to be released as well as TIC flows and the NAHB
Housing Market Index. Also, the Treasury is set to auction 3- and
6-month bills. Overnight, the German ZEW Economic Sentiment Index
and Spanish bill auctions could move markets.
Good luck and good trading.
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advice. All rights reserved.
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