Futures Lower on Weak Chinese Data, Italy Fears
U.S. equity futures fell in early pre-market trade Monday
following weaker than expected data from China and also on
continued fears surrounding the state of Italian politics. New data
showed that China's services sector grew faster than expected in
February, days after the official manufacturing PMI also showed
slower than expected growth in the month. Also, markets feared the
need for another round of elections in Italy, creating more
uncertainty in world politics.
In other news around the markets:
Warren Buffett, in his annual letter to Berkshire Hathaway (NYSE:
BRK-A)(NYSE: BRK-B) shareholders, noted that the firms performance
in 2012 was lackluster as he failed to hunt an "elephant" to
acquire until January 2013. He expects to continue making
acquisitions to drive book value growth. Spain's unemployment rate
rose to a massive 27 percent in February as more than 59 thousand
workers filed for new unemployment claims in Spain. The increase
was actual the slowest rise in unemployment in Spain for the month
of February in five years, potentially showing that a bottom to
Spain's economy is near. Fed Chairman Ben Bernanke spoke over the
weekend dismissing fears of an early Fed exit or "Fexit" as he
noted that the risks of the Fed taking away liquidity too early far
outweigh the risks of not taking it away soon enough, in his view.
S&P 500 futures fell 4.3 points to 1,512.40. The EUR/USD was
fell 0.19 percent to 1.2993, breaking below the psychological 1.30
level for the second consecutive trading day. Spanish 10-year
government bond yields fell to 5.06 percent. Italian 10-year
government bond yields rose to 4.81 percent. Gold rose 0.29 percent
Asian shares were mostly lower except for Japan, led lower by
China following the weaker than expected manufacturing and service
sector PMI's. The Japanese Nikkei Index rose 0.4 percent and the
Shanghai Composite Index fell 3.65 percent while the Hang Seng
Index slipped 1.5 percent. Also, the Korean Kospi fell fell 0.66
percent and Australian shares declined 1.49 percent.
European shares were mostly lower save for Spain in early trade
on fears of a global slowdown led by China and on Italian political
fears. The Spanish Ibex Index rose 0.23 percent on the better than
expected employment data and the Italian FTSE MIB Index fell 0.92
percent. Meanwhile, the German DAX fell 0.47 percent and the French
CAC fell 0.04 percent while U.K. shares declined 0.42 percent.
Commodities were mixed overnight as energy futures were mostly
lower and metals futures rose. WTI Crude futures fell 0.19 percent
to $90.51 per barrel and Brent Crude futures rose 0.05 percent to
$110.46 per barrel. Copper futures rose rose 0.1 percent to $350.50
per pound despite weakness in China and Australia. Gold was higher
and silver futures rose 0.84 percent to $28.73 per ounce.
Currency markets were in clear risk-off mode as the dollar and
the yen reigned and the euro fell. The EUR/USD was lower at 1.2993
and the dollar fell against the yen to 93.57. Overall, the Dollar
Index rose 0.08 percent on strength against the euro, the pound,
the Canadian dollar, and the Swiss franc. Notably, the Australian
dollar was weak on fears of a Chinese slowdown and also on negative
comments from Moody's on the nations sovereign debt rating, saying
that the strong currency is a risk to debt payments should it
Stocks moving in the pre-market included:
Best Buy (NYSE:
) shares rose 1.92 percent pre-market after beating earnings last
Friday. Joy Global (NYSE:
) shares fell 1.97 percent pre-market on fears that new orders from
China and Asia could slow if the broad economy slows.
) shares fell 0.74 percent pre-market after the company rolled out
a slew of new services over the weekend. Pfizer (NYSE:
) shares fell 0.66 percent pre-market as the FDA approved a drug
made by Bayer to compete with its intestine cancer drug.
Notable companies expected to report earnings Monday
Arena Pharmaceuticals (NASDAQ:
) is expected to report a fourth quarter loss of $0.03 per share
vs. a loss of $0.16 per share a year ago. Boyd Gaming (NYSE:
) is expected to report a fourth quarter loss $0.13 per share vs. a
loss of $0.03 per share a year ago. Navistar (NYSE:
) is expected to report a first quarter loss of $1.73 per share vs.
a loss of $0.91 per share a year ago. Transocean (NYSE:
) is expected to report fourth quarter EPS of $0.82 vs. $0.24 a
On the economics calendar Monday, the Treasury is set to auction
3- and 6-month bills. Also, the TD Ameritrade Investor Movement
Index should shed light on retail flows in February. Overnight, the
RBA rate decision is expected followed by the European service
PMI's for both the broad eurozone and for individual countries.
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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