Futures Modestly Lower on China Fears, Italy Downgrade
U.S. equity futures traded slightly lower in early pre-market
trade following weaker than expected industrial production and
inflation data from China.
Industrial production grew 9.9 percent in February from a year
ago, less than the forecasted 10.3 percent gain, and CPI inflation
grew faster than expected. Combined, the data raised new fears that
the PBOC would tighten policy earlier than expected even as output
indicators slow in order to cool inflation.
In other news around the markets:
Italy's economy shrank slightly more than expected in the fourth
quarter, with GDP contracting 2.8 percent from the same period a
year ago, slightly worse than the forecasted rate of 2.7 percent.
Germany's trade balance was reported as in line with forecasts
overnight, however exports and imports both grew faster than
expected, showing slight underlying strength of the German economy
in the face of a broad European recession. Chinese auto sales
dropped 13.6 percent in February from the same period a year ago.
However, taking both the January and February data together, sales
were higher by 14.7 percent, the drop in February due to the
extended 2013 Lunar New Year holiday. S&P 500 futures fell 1.7
points to 1,549.60. The EUR/USD was flat at 1.3005. Spanish 10-year
government bond yields fell to 4.73 percent from 4.77 percent.
Italian 10-year government bond yields rose to 4.64 percent from
4.61 percent. Gold rose 0.11 percent to $1,578.70 per ounce.
Asian shares were mixed overnight as Chinese shares lagged on
the weak economic data released over the weekend. The Japanese
Nikkei Index rose 0.53 percent and the Shanghai Composite Index
fell 0.34 percent while the Hang Seng Index was flat. Also, the
Korean Kospi fell 0.13 percent and Australian shares rose 0.46
European shares were mostly lower following Fitch's late-day
downgrade of Italy to BBB+ on Friday. The Spanish Ibex Index fell
0.75 percent and the Italian FTSE MIB Index declined 0.76 percent
with banks falling over 3 percent. Meanwhile, the German DAX fell
0.21 percent and the French CAC fell 0.33 percent while U.K. shares
Commodities were lower as oil fell following the Chinese data.
WTI Crude futures fell 0.39 percent to $91.59 per barrel and Brent
Crude futures fell 0.72 percent to $110.04 per barrel. Copper
futures fell 0.64 percent to $348.70 per pound also due to the
weakness in China but also on some weak manufacturing data in
Japan. Gold was higher and silver futures fell 0.06 percent to
$28.93 per ounce.
Currency markets were quiet overnight as the yen weakened
slightly. The EUR/USD was flat at 1.3005 and the dollar rose
against the yen to 96.11. Overall, the Dollar Index rose 0.03
percent on strength against the yen, the pound, and the Swedish
krone. Notably, the only real mover overnight was the yen with
other major crosses trading near flat.
Stocks moving in the pre-market included:
Genworth Financial (NYSE:
) shares rose 3.05 percent pre-market following a positive article
in Barron's this weekend which stated that the stock could double
in the next year. Ford (NYSE:
) shares fell 0.46 percent following the weaker than expected
Chinese auto sales. IBM (NYSE:
) shares fell 0.28 percent despite the company winning a new
contract to help design a smart city in Montpellier, France.
Notable companies expected to report earnings Monday
Chiquita Brands (NYSE:
) is expected to report a fourth quarter loss of $0.34 per share
vs. a loss of $0.12 per share a year ago. CVR Energy (NYSE:
) is expected to report fourth quarter EPS of $0.90 vs. $0.34 a
year ago. Dick's Sporting Goods (NYSE:
) is expected to report fourth quarter EPS of $1.06 vs. $0.76 a
year ago. Renren (NYSE:
) is expected to report a fourth quarter loss of $0.07 per share
vs. a loss of $0.01 per share a year ago. Urban Outfitters (NASDAQ:
) is expected to report fourth quarter EPS of $0.57 vs. $0.27 a
On the economics calendar Monday, the Treasury is expected to
auction 3-month and 6-month bills. Overnight, German inflation,
British industrial production, and Spanish and Italian bill
auctions could move markets.
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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