Futures Rise Despite Weak China GDP
U.S. equity futures gained in early pre-market trade despite
weak GDP data from China. China reported second quarter GDP grew
1.7 percent in the quarter, worse than the expected 1.8 percent
growth rate. However, the annualized figure posted at 7.5 percent
growth, in line with forecasts.
In other news around the markets:
Other Chinese data released overnight included the industrial
production, retail sales, and fixed asset investment reports.
Industrial production and fixed asset investment both grew less
than expected in June while retail sales outpaced expectations.
Barclays issued a note overnight and now sees the Fed tapering
asset purchases in September, which is in line with market
expectations. They did note that they expect uncertainty over the
Fed to continue to mount but note that rate hikes are still very
far off on the horizon. After the close Friday, AT&T (NYSE:
) announced its intention to acquire Leap Wireless (NYSE:
) for $15 per share in cash plus the proceeds of the sale of
bandwidth in Chicago. S&P 500 futures gained 3.5 points to
1,673.80. The EUR/USD was lower at 1.3033. Spanish 10-year
government bond yields rose 4 basis points to 4.82 percent. Italian
10-year government bond yields rose 4 basis points to 4.53 percent.
Gold rose 0.25 percent to $1,280.80 per ounce.
Asian shares were higher overnight on the back of the China data
despite Japanese markets being closed for a holiday. Chinese shares
were higher as the Shanghai Composite Index rose 0.98 percent and
the CSI 300 Index gained 1.4 percent while the Hang Seng Index in
Hong Kong rose 0.12 percent. Also, the Korean Kospi gained 0.28
percent and Australian shares gained 0.15 percent.
European shares were higher overnight on little news. The
Spanish Ibex Index rose 0.12 percent and the Italian FTSE MIB Index
gained 0.73 percent. Meanwhile, the German DAX rose 0.5 percent and
the French CAC 40 Index gained 0.71 percent while U.K. shares added
Commodities were mixed overnight as oil prices dropped. WTI
Crude futures fell 0.24 percent to $105.70 per barrel and Brent
Crude futures declined 0.02 percent to $108.79 per barrel. Copper
futures fell 0.63 percent to $313.50. Gold was higher and silver
futures were flat.
Currency markets were on the move as dollar strength was seen
nearly across the board. The EUR/USD was lower at 1.3033 and the
dollar gained against the yen to 99.79. Overall, the Dollar Index
rose 0.25 percent on strength against the yen, the Swiss franc, the
pound, the euro, and the Canadian dollar.
Earnings Reported Yesterday
Key companies that reported earnings Friday include:
) reported first quarter EPS of $0.73 vs. $0.70 a expected on
revenue of $1.99 billion vs. $1.95 billion. J.P. Morgan Chase &
) reported adjusted second quarter EPS of $1.45, in line, on
revenue of $25.12 billion vs. $25.73 billion expected. Wells Fargo
) reported second quarter EPS of $0.98 vs. $0.93 on revenue of
$21.4 billion vs. $21.16 billion. United Parcel Service (NYSE:
) pre-reported second quarter EPS of $1.13 vs. $1.20 expected.
Stocks moving in the pre-market included:
Leap Wireless (NASDAQ:
) shares gained 116.92 percent pre-market to $17.31 per share as
the market tries to value the bandwidth that is to be sold to
estimate the total takeover price. Citigroup (NYSE:
) shares gained 0.33 percent heading into its earnings report after
a positive mention in Barron's. Boeing (NYSE:
) shares gained 1.72 percent pre-market as markets believe that the
Ethiopian Air incident that saw a 787 catch fire was most likely an
accident and not the company's fault.
Notable companies expected to report earnings Monday
) is expected to report second quarter EPS of $1.18 vs. $1.00 a
year ago on revenue of $19.79 billion vs. $18.64 billion a year
ago. Gardner Denver (NYSE:
) is expected to report second quarter EPS of $1.28 vs. $1.53 a
year ago on revenue of $561.49 million vs. $613.01 million a year
ago. Wynn Resorts (NASDAQ:
) is expected to report second quarter EPS of $1.58 vs. $1.38 a
year ago on revenue of $1.34 billion vs. $1.25 billion a year ago.
On the economics calendar Monday, the monthly retail sales
report and the Empire State Manufacturing Index are due out as well
as the business inventories report. Also, the Treasury is set to
hold the weekly auction of 3- and 6-month bills. Overnight, the RBA
minutes and the German ZEW Economic Sentiment Index are expected to
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and
For a recap of Friday's market action, read Benzinga's daily
market wrap .
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