Futures Higher After Japanese Gains
U.S. equity futures rose in early pre-market trade after
Japanese stocks bounced back from a bear market overnight. The
benchmark Nikkei 225 Index rose almost 5 percent overnight
following better than expected economic data which points to a
recovery being fueled by the non-traditional stimulus measures of
the new regime.
In other news around the markets:
China reported its trade balance for the month of May over the
weekend, with the trade balance rising to $20.4 billion in May from
$18.16 billion in April on expectations of a reading of $20.0
billion. An unexpected drop in imports masked slower than expected
export growth in the month. China also reported weaker than
expected inflation, lending, industrial production, and fixed asset
investment data this weekend, while retail sales growth outpaced
expectations and vehicle sales growth slowed. Japan's final reading
for first quarter GDP rose to 1.0 percent quarterly growth from the
prior estimate of 0.9 percent on expectations of a flat reading. On
an annualized basis, the economy has grown 4.1 percent, better than
expectations of 3.5 percent growth, which would have indicated a
flat reading as well. Japan's seasonally adjusted current account
surplus jumped unexpectedly in April to $8.64 billion vs. $3.85
billion expected and better than April's $3.47 billion in a sign
that the devaluation of the yen is successfully boosting exports
and leading to a recovery. S&P 500 futures rose 6.6 points to
1,645.20. The EUR/USD was marginally lower at 1.3214. Spanish
10-year government bond yields fell 3 basis points to 4.52 percent.
Italian 10-year government bond yields fell 3 basis points to 4.16
percent. Gold fell 0.37 percent to $1,377.90 per ounce.
Asian shares were mixed overnight as Japanese equities rallied
sharply despite lackluster Chinese economic data. The Japanese
Nikkei 225 Index closed higher by 4.94 percent, the largest one-day
gain since March, and the Topix Index gained 5.21 percent. Also,
the Korean Kospi gained 0.46 percent while Australian shares
declined 0.91 percent.
European shares were mixed in early trade led by German equities
which now returned to the green over the past month following the
move. The Spanish Ibex Index rose 0.1 percent and the Italian FTSE
MIB Index fell 0.16 percent. Meanwhile, the German DAX rose 0.8
percent and the French CAC 40 dropped 0.02 percent as U.K. shares
rose 0.02 percent.
Commodities were mostly lower overnight following the renewed
round of dollar strength led by declines in the yen and also on the
weak China data from over the weekend. WTI Crude futures fell 0.29
percent to $95.75 per barrel and Brent Crude futures declined 0.25
percent to $104.50 per barrel. Copper futures dropped 1.16 percent
to $323.05 per ounce. Gold was lower and silver futures fell 1.23
percent to $21.48 per ounce.
Currency markets had one theme overnight, yen weakness, as the
dollar gained over 1 percent against the Japanese currency. The
EUR/USD was marginally lower at 1.3214 and the dollar gained
against the yen to 98.70. Overall, the Dollar Index rose 0.26
percent on strength against the yen, the British pound, the Swiss
franc, and slight strength against the euro. Notably, the Aussie
dollar continued its string of declines, falling 0.76 percent
against the U.S. dollar to 0.9425 after having made a fresh low of
Earnings Reported Yesterday
Key companies that reported earnings Friday include:
JinkoSolar Holdings (NYSE:
) reported a first quarter loss of $0.56 per share vs. a loss of
$1.66 per share expected on revenue of $187.3 million vs. $168.25
Stocks moving in the pre-market included:
Cliffs Natural Resources (NYSE:
) shares slipped 0.45 percent pre-market as the natural resources
company declined weak data from China. 3M (NYSE:
) shares gained 0.8 percent, extending Friday's 2.25 percent gain
after Jefferies boosted its price target on the stock to $128 from
$120 and maintained the stock at a buy. Salesforce.com (NYSE:
) shares gained 0.48 percent pre-market, recouping some of the
losses seen after announcing the acquisition of ExactTarget (NYSE:
) for $2.5 billion in cash. Analysts were out in defense of the
stock following the drop early last week.
Notable companies expected to report earnings Monday
) is expected to report fourth quarter EPS of $0.28 vs. $0.24.
Diamond Foods (NASDAQ:
) is expected to report a third quarter loss of $0.17 per share vs.
a loss of $0.22 per share a year ago. Lululemon Athletica (NASDAQ:
) is expected to report first quarter EPS of $0.30 vs. $0.32 a year
ago. Navistar (NYSE:
) is expected to report a second quarter loss of $1.20 per share
vs. EPS of $0.67 a year ago.
On the economics calendar Monday, Canadian housing starts and
the U.S. CB Employment Trends Index are due out followed by the TD
Ameritrade Investor Movement Index. Also, the Fed's James Bullard
is set to speak and the Treasury will hold its weekly 3- and
6-month bill auctions. Overnight, the Bank of Japan will update the
markets on its current stimulus programs in its interest rate
decision and accompanying policy statement.
Good luck and good trading.
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