Futures Rise on Chinese Data
U.S. equity futures rose slightly in early Monday trade
following a slew of Chinese data over the weekend. The Chinese
Manufacturing PMI rose to 50.6 in November from 50.2 in October,
showing a continued recovery in the sector. In addition, the
official Services PMI rose to 55.6 in November, both data points
showing a continued turnaround story in China.
In other news around the markets:
- Moody's downgraded the joint European bailout funds, the
European Financial Stability Facility (EFSF) and the European
Stability Mechanism (ESM). Following the downgrade of France,
Moody's has downgraded the ratings of these funds as the
ratings are effectively a weighted average of the members'
contributions and because France has a large contribution,
forced the downgrade.
- Greece officially announced the debt buyback plan in which
it will buy back bonds between between 30.2 and 40.1 percent of
the principal amount.
- The Eurozone Manufacturing PMI rose to 46.2 in November, in
line with estimates and better than October's 45.4. In fact,
the reading was the strongest since March and was buoyed by
strength in Spain and weighed down by weakness in Italy.
- S&P 500 futures 1.4 points to 1,415.80.
- The EUR/USD was higher at 1.3036.
- Spanish 10-year government bond yields fell to 5.223
- Italian 10-year government bond yields fell to 4.427
- Gold rose 0.43 percent to $1,720.00 per ounce.
Asian shares were mixed overnight with weakness in China
overshadowed by strength in other regional bourses. The Japanese
Nikkei Index rose 0.13 percent while the Shanghai Composite Index
fell 1.03 percent and the Hang Seng Index fell 1.19 percent in
Hong Kong trading. Also, the Korean Kospi rose 0.37 percent and
Australian shares rose 0.57 percent.
European shares were higher following the release of the
manufacturing PMIs, seemingly ignoring the Moody's downgrade of
the bailout funds. The Spanish Ibex Index rose 0.26 percent and
the Italian MIB Index rose 0.77 percent in early trade.
Meanwhile, the German DAX rallied 0.43 percent while the French
CAC rose 0.5 percent and the U.K. FTSE 100 jumped 0.22
Commodities were mostly higher in early trade reacting to the
slew of data released over the weekend. WTI Crude futures fell
slightly by 0.12 percent to $88.80 per barrel and Brent Crude
futures rose 0.14 percent to $111.39 per barrel. Copper futures
were slightly weaker in early trade, falling 0.04 percent to
$364.85 per pound. Gold was higher in early trade and silver
futures rose 1.07 percent to $33.64 per ounce.
Currency markets were fairly active overnight with the dollar
weakening against a basket of currencies. The EUR/USD was higher
at 1.3039, breaking out of the 1.2960-1.3030 range seen in the
second half of last week, and the dollar fell against the yen as
the USD/JPY fell to 82.10. In addition, the pound rose 0.34
percent against the dollar and greenback was stronger against the
Canadian dollar and the Swiss franc. Lastly, the Aussie dollar
was slightly weaker to start the week as investors await the RBA
rate decision late Monday night. The Bank is expected to cut
rates seeing as no cut would ensure that the Bank would go
without a rate cut for four months (the next meeting is not until
February and the Bank did not cut rates last month).
Stocks moving in the pre-market included:
- Boston Scientific (NYSE:
) shares rose 1.08 percent pre-market as the first patients
enrolled in a new phase 2 drug trial for its Evolve
- General Mills (NYSE:
) shares rose 0.51 percent pre-market as investors clamored for
yield ahead of dividend tax hikes in the new year.
Notable companies expected to report earnings Monday
- LDK Solar (NYSE:
) is expected to report a third quarter loss of $1.24 per share
vs. a loss of $0.87 a year ago.
On the economics calendar Monday, the Markit U.S. PMI and the
ISM Manufacturing Index are expected as well as construction
spending data. In addition, James Bullard of the St. Louis Fed is
set to speak and the Treasury is to auction 4-week, 3-, and
Good luck and good trading.
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