Futures Drop on Greek Uncertainty, Catalan
U.S. equity futures fell in pre-market trading as uncertainty
surrounding Greece's disbursement of its latest payment grips
markets. Greece has already agreed on the necessary cuts with the
Troika to receive the payment, however the current debate is an
internal one amongst the Troika parties on how to give Greece
more time to pay off its loans.
In other news around the markets:
- The separatist parties in the Catalan region of Spain won a
majority in the Catalan Parliament, which could lead to the
region seceding and forming its own nation. This movement has
gained popularity since the austerity measures of Mariano
Rajoy's government in Madrid have hurt growth and sent
- The Eurogroup is set to send an additional 35 billion euros
to Spain's bank bailout fund, the FROB, to aid
recapitalizations in exchange for job cuts at the banks.
Troubled Bankia Group is set to lay off an additional 6,000
employees for more funding.
- ECB Governing Council Vice President Vítor Manuel Ribeiro
Constâncio spoke overnight, stating that he expects Spain to
apply for a Troika program and activate the OMT program
launched earlier this year by President Mario Draghi.
- S&P 500 futures fell 6.3 points to 1,399.00.
- The EUR/USD was lower at 1.2960.
- Spanish 10-year government bond yields rose to 5.653
- Italian 10-year government bond yields rose to 4.788
- Gold fell 0.25 percent to $1,747.10 per ounce.
Asian shares were mixed overnight with Japanese shares
continuing to rise on increased stimulus hopes and Chinese shares
slumping. The Japanese Nikkei Index rose 0.24 percent while the
Shanghai Composite Index fell 0.49 percent and the Hang Seng
Index fell 0.24 percent in Hong Kong. Also, the Korean Kospi fell
0.15 percent while Australian shares rose 0.25 percent.
European shares were lower in early trading as European
Finance Ministers met for the third straight week in attempt to
reach an agreement on the Greek bailout. The Spanish Ibex Index
fell 0.5 percent and the Italian MIB Index fell 0.42 percent
while Greek shares dropped 0.22 percent. Meanwhile, the German
DAX fell 0.31 percent and the French CAC 40 fell 0.69 percent
while the U.K. FTSE 100 Index fell 0.47 percent.
Commodities were weaker overnight as risk sentiment faded from
the shortened Thanksgiving trading week. WTI Crude futures fell
0.6 percent to $87.75 per barrel and Brent Crude futures fell
0.38 percent to $110.96 per barrel. Copper futures slipped 0.42
percent to $352.40 per pound, following the weakness in Chinese
shares. Gold was lower and silver futures fell 0.35 percent to
$34.09 per ounce.
Currency markets were rather quiet overnight and the only
notable mover was the yen. The EUR/USD was slightly lower at
1.2960 and the dollar fell against the yen to 82.02, or 0.47
percent. Overall, the Dollar Index rose a mere 0.02 percent to
80.21, buoyed by strength against the Swedish Krone as oil prices
dropped. The EUR/JPY cross fell 0.48 percent to 106.35 and the
AUD/JPY cross fell 0.5 percent to 85.66, showing the broad yen
Stocks moving in the pre-market included:
- J.C. Penney (NYSE:
) shares rose 1.21 percent in pre-market trading in hopes that
Thanksgiving shopping was strong at the retailer.
- Yum! Brands (NYSE:
) shares fell 0.88 percent pre-market as wage hikes in China
are expected to hurt profitability at the company's large
- Apple (NASDAQ:
) shares rose 0.26 percent pre-market as Black Friday sales
appeared strong, according to Mizuho, and the
filed a new lawsuit against Samsung
- eBay (NASDAQ:
) shares rose 0.29 percent on hopes of a strong Black Friday
for the company, despite CFO Robert Holmes Swan reporting to
have sold 75,856 shares of company stock in the past week.
The earnings calendar is rather light Monday. Notable
companies expected to report earnings Wednesday include:
- Joseph A Bank (NASDAQ:
) is expected to report third quarter EPS of $0.55 vs. $0.54 a
- Teavan Holdings (NYSE:
) is expected to report a third quarter loss of $0.01 per share
vs. a profit of $0.02 a share a year ago.
On the economics calendar Monday, the Chicago Fed National
Activity Index and the Dallas Fed Manufacturing Index are due
out. Also, the Treasury is set to auction 4-week, 3-, and 6-month
bills. Overnight, the Fed's Fisher is set to speak, Spain is set
to auction 3- and 6-month bills, and revised British third
quarter GDP data is due out.
Good luck and good trading.
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