Futures Flat on Global Fears
U.S. equity futures were flat in pre-market trading Monday on
global fears as eurozone risks crept higher. Peripheral bond yields
rose overnight as former Italian Prime Minister Silvio Berlusconi
wants to undo austerity measures just two weeks before elections
and also as Spanish Prime Minister Mariano Rajoy gets swept into a
scandal surrounding his personal finances.
In other news around the markets:
China's services sector expanded in January as the
non-manufacturing PMI rose to 56.2 from 56.1 in January. French
Finance Minister Pierre Moscovici spoke over the weekend, warning
that the strong euro could derail any economic recovery. China's
futures exchanges are set to raise margins ahead of the Lunar New
Year holiday, which could hurt prices as traders have to post more
collateral per contract. S&P 500 futures were slightly lower by
1.2 points to 1,505.70. The EUR/USD was lower at 1.3588. Spanish
10-year government bond yields rose sharply to 5.21 percent, the
highest in over one month. Italian 10-year government bond yields
rose sharply to 4.42 percent. Gold was lower at $1,664.70.
Asian shares were mixed overnight with strength in the major
markets in Japan and China offset by weakness elsewhere. The
Japanese Nikkei Index rose 0.62 percent and the Shanghai Composite
Index rose 0.38 percent while the Hang Seng Index fell 0.16
percent. Also, the Korean Kospi fell 0.23 percent and Australian
shares fell 0.28 percent.
European shares were lower led by Italian shares as regulators
launched a formal investigation into Banca Monte dei Paschi di
Sienna following its bailout request resulting from a large
derivative loss. The Spanish Ibex Index fell 0.89 percent, led
lower by energy and financials companies, and the Italian MIB Index
declined 1.75 percent, hurt by financials and economically
sensitive industrial companies. Meanwhile, the German DAX fell 0.25
percent, the French CAC fell 0.32 percent, and U.K. shares lost
Commodities were weak overnight across the board as weakness was
seen in both energy and metals futures. WTI Crude futures declined
0.63 percent to $97.25 per barrel and Brent Crude futures fell 0.51
percent to $116.17 per barrel. Copper futures declined 0.22 percent
to $377.60 per pound. Gold was lower and silver futures dropped
1.07 percent to $31.62.
Currency markets were in risk-off mode overnight as the euro
sold off and the yen strengthened after early weakness. The EUR/USD
was lower at 1.3588 and the dollar rose against the yen to 92.89
after rising above 93 earlier. Overall, the Dollar Index rose 0.34
percent on strength against the euro, the yen, and the Swiss franc.
In addition, the AUD/USD rose ahead of the RBA rate decision and
the EUR/GBP declined 0.71 percent, reversing recent flows.
Notable companies expected to report earnings Monday
) is expected to report fourth quarter EPS of $1.29 vs. $0.92 a
year ago. Clorox (NYSE:
) is expected to report second quarter EPS of $0.81. vs. $0.79 a
year ago. Humana (NYSE:
) is expected to report fourth quarter EPS of $1.07 vs. $1.20 a
year ago. Simon Property Group (NYSE:
) is expected to report fourth quarter EPS of $1.08. vs. $1.24 a
year ago. Yum! Brands (NYSE:
) is expected to report fourth quarter EPS of $0.82. vs $0.75 a
On the economics calendar Monday, factory orders are the only
notable piece of economic data set to be released in the U.S. The
Treasury is also set to auction 3- and 6-month bills. Overnight,
the RBA rate decision and Eurozone services PMI's should move
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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