U.S. equity futures slipped in pre-market trading as mixed
economic data with a slight positive bias was weighed down by
fears over Europe's debt crisis. Positive industrial production
and retail sales data in China were offset by weak trade data.
Meanwhile, the return of former Prime Minister Silvio Berlusconi
to Italian politics has created a new political crisis in the
country and caretaker Prime Minister Monti said he would not seek
a new term amidst the crisis.
In other news around the markets:
- Recent developments on the Fiscal Cliff may be indicating
that leaders are closer than previously thought to a deal, as
top Senate Republicans are seemingly giving up on their no
tax-hikes pledge to reach a deal, but the House still remains
- Due to its recent success, Greece has extended the debt
buyback offer that it launched last week in hopes of buying
back more debt to aid its finances.
- The Bank for International Settlements (
) has warned economies around the world to be careful of
sparking a new credit bubble with extended low rates. The
warning comes as Central Banks are internally debating the
exact effects of non-traditional policy on inflation.
- S&P 500 futures fell 4.5 points to 1,411.50.
- The EUR/USD was slightly higher at 1.2903.
- Spanish 10-year government bond yields rose to 5.648
- Italian 10-year government bond yields rose to 4.684
- Gold rose 0.28 percent to $1,710.28 per ounce.
Asian shares initially traded strongly but gave back some
gains upon the release of the weak Chinese trade data. The
Japanese Nikkei Index rose 0.07 percent and the Shanghai
Composite Index rose 1.07 percent while the Hang Seng Index
gained 0.39 percent. In addition, the Korean Kospi was flat and
Australian shares rose 0.14 percent.
European shares fell sharply in early trade with notable
weakness seen in Italian stocks as fears over Italy's new
political crisis have caused investors to fear that economic
reforms will be ignored for the sake of politics. The Spanish
Ibex Index fell 1.98 percent and the Italian MIB Index fell a
whopping 3.47 percent on these fears. Meanwhile, the German DAX
fell 0.62 percent on poor domestic trade data, the French CAC
slipped 0.67 percent, and U.K. shares fell 0.31 percent.
Commodities were slightly stronger overnight, shrugging off
much of the bad news emanating both from China and Europe and
rising on hopes of a Fiscal Cliff deal. WTI Crude futures rose
0.47 percent to $86.33 per barrel and Brent Crude futures rose
0.74 percent to $107.81. Copper futures rose 1.11 percent to
$370.75 per pound because, although the headline Chinese trade
data was weak, metals imports remained strong, especially iron
ore demand. Gold was higher and silver futures rose 0.69 percent
to $33.36 per ounce.
Currency markets were in clear risk-off mode overnight as the
yen reigned and the euro was little changed. The EUR/USD was
basically flat at 1.2903 and the dollar fell against the yen to
82.16. Overall, the Dollar Index rose 0.05 percent to $80.451 on
strength against the Swiss franc and the Swedish krone. Except
for yen crosses, forex markets were pretty quiet overnight with
moves limited. The AUD/JPY fell 0.28 percent to 86.09 and the
EUR/JPY fell to 106.06.
Stocks moving in the pre-market included:
- Freeport-McMoRan Copper and Gold (NYSE:
) shares rose 0.91 percent pre-market following its massive
acquisitions last week where the company shelled out nearly $20
billion to purchase McMoRan Exploration (NYSE:
) and Plains Exploration (NYSE:
- United States Steel (NYSE:
) shares fell 0.55 percent pre-market as weak Chinese trade
data overshadowed the subtly positive iron ore import
- Advanced Micro Devices (NYSE:
) shares rose 0.42 percent pre-market as the company has
started to attract new bullish speculation, according to
- Bank of America (NYSE:
) shares fell 0.7 percent pre-market as financials as a sector
Notable companies expected to report earnings Monday
- Stein Mart (NASDAQ:
) is expected to report a third quarter loss of $0.09 vs. a
loss of $0.08 a year ago.
- Winnebago Industries (NYSE:
) is expected to report first quarter EPS of $0.10 vs. $0.04 a
On the economics calendar Monday, the Treasury is set to
auction 3- and 6-month bills. Overnight, French Non-Farm Payrolls
are due out and the German Zew Economic Survey is expected to be
Good luck and good trading.
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