Futures Rise on Chinese Strength, Stimulus Hopes
U.S. equity futures rose slightly in early Monday trade
following news out of China that Chinese authorities will now allow
direct investment of foreigners in stocks, bonds, and other
financial assets. The news is just another step in China's
transformation into a more open economy. Also, comments from
Chicago Fed President Charles Evans signaled that the latest round
of QE is not ending anytime soon, especially with the latest FOMC
members seeming more dovish than last year's members.
In other news around the markets:
Industrial Production for the eurozone in November fell 0.3 percent
in the month, or at a 3.7 percent annualized rate of contraction,
worse than the forecasts of a +0.1 percent monthly gain. Former
Treasury Secretary Larry Summers spoke overnight, saying that the
Fiscal Cliff deal is not a total package, but a start at an
all-encompassing deal. Also, he is very cautious on the global
economy and sees fourth quarter U.S. GDP growth near 1 percent. The
Bank of Japan is set to accept the new 2 percent inflation target
from Prime Minister Abe and will issue a joint statement following
next week's BoJ meeting. S&P 500 futures rose 2.8 points to
1,470.00. The EUR/USD was higher at 1.3376. Spanish 10-year
government bond yields rose to 4.957 percent. Italian 10-year
government bond yields rose to 4.139 percent. Gold rose 0.45
percent to $1,668.10 per ounce.
Asian shares were higher overnight following both the news out
of China and the news out of Japan, as well as relaxed fears on the
global economy. The Japanese Nikkei Index rose 1.4 percent and the
Shanghai Composite Index rose 3.06 percent while the Hang Seng
Index rose 0.64 percent in Hong Kong trading. In addition, the
Korean Kospi rose 0.52 percent and Australian shares rose 0.22
European shares were higher in early Monday trade led by Italian
stocks despite the weaker than expected industrial production data.
The Spanish Ibex Index rose 0.55 percent and the Italian MIB Index
rose 1.00 percent, despite bond yields rising. Meanwhile, the
German DAX rose 0.77 percent and the French CAC rose 0.6 percent
while U.K. shares rose 0.13 percent.
Commodities were higher overnight in clear risk-on markets. WTI
Crude futures rose 0.64 percent to $94.16 per barrel and Brent
Crude futures rose 0.56 percent to $111.20 per barrel. Copper
futures rose 0.71 percent to $368.05 per pound on the news out of
China. Gold was higher and silver futures rose 0.35 percent to
$30.76 per ounce.
Currency markets were in clear risk-on mode as the euro
continued to rally and the yen continued to be weak. The EUR/USD
was higher at 1.3376 and the dollar rose against the yen to 89.31.
Overall, the Dollar Index fell 0.14 percent on weakness against the
euro, the Canadian dollar, and the Swedish krone, despite being
stronger against the yen, the pound, and the Swiss franc.
Stocks moving in the pre-market included:
) shares rose 1.92 percent pre-market on little news and thin
volume. Bank of America (NYSE:
) shares rose 1.29 percent pre-market as banks rallied on further
easing hopes. J.C. Penney (NYSE:
) shares fell 0.38 percent after declining 4.65 percent Friday on
analyst forecast cuts. General Electric (NYSE:
) shares rose 0.99 percent pre-market as the company received new
patents over the weekend.
Notable companies expected to report earnings Monday
Consolidated Edison (NYSE:
) is expected to report fourth quarter EPS of $0.73 vs. $0.74 a
year ago. Heartland Express (NASDAQ:
) is expected to report fourth quarter EPS of $0.16 vs. $0.20 a
year ago. PPG Industries (NYSE:
) is expected to report fourth quarter EPS of $1.52 vs. $1.31 a
On the economics calendar Monday, there are no important data
releases on the economic calendar. However, the Fed's John
Williams, Dennis Lockhart, and Ben Bernanke are set to speak.
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
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