Futures Flat On Draghi Stimulus Comments
U.S. equity futures were relatively flat in early trade
following comments from ECB President Mario Draghi. Draghi said
that the bank has no intention of tightening policy anytime soon as
inflation runs below target and that the bank is far from
implementing an exit strategy.
In other news around the markets:
Chairman Ben Bernanke finished his two-day testimony in Washington
Wednesday, dismissing fears over an exit strategy and reiterated
his comment to loose monetary policy. Germany's unemployment rate
in February was flat at 6.9 percent from an upwardly revised 6.9
percent in January, weaker than forecasts of a 6.8 percent rate.
Spanish fourth quarter GDP fell 0.8 percent from the previous
quarter, worse than expectations of a drop of 0.7 percent. S&P
500 futures were flat at 1,515.80. The EUR/USD was lower at 1.3108.
Spanish 10-year government bond yields fell to 5.13 percent.
Italian 10-year government bond yields fell to 4.75 percent. Gold
fell 0.38 percent to $1,589.60.
Asian shares were higher led by Chinese and Japanese stocks on
global monetary stimulus, including from Japan. The Japanese Nikkei
Index rose 2.71 percent and the Shanghai Composite Index rose 2.26
percent while the Hang Seng Index rose 1.96 percent. Also, the
Korean Kospi rose 1.12 percent and Australian shares rose 1.34
European shares were mostly higher save for Italy on
post-election fears. The Spanish Ibex Index rose 0.46 percent
despite Bankia reporting a massive $27.6 billion loss for 2012 and
the Italian FTSE MIB Index fell 0.21 percent. Meanwhile, the German
DAX rose 0.54 percent and the French CAC gained 0.35 percent while
U.K. shares rose 0.27 percent.
Commodities were mixed overnight with precious metals especially
weak. WTI Crude futures fell 0.29 percent to $92.49 per barrel and
Brent Crude futures rose 0.09 percent to $111.97 per barrel. Copper
futures rose 0.08 percent to $357.00 per pound on Chinese strength.
Gold was lower and silver futures declined 0.16 percent to $28.94
Currency markets were rather quiet as the euro weakened on
increased monetary stimulus talk from Draghi. The EUR/USD was lower
at 1.3108 and the dollar fell against the yen to 92.14. Overall,
the Dollar Index rose 0.04 percent on strength against the euro,
the Swiss franc, the Canadian dollar, and the Swedish krone.
Stocks moving in the pre-market included:
) fell 24.78 percent pre-market after the company reported weaker
than expected earnings. J.C. Penney (NYSE:
) shares fell 13.75 percent after the company reported earnings
that missed estimates on multiple items including restructuring
charges and other one-time items. Mylan (NASDAQ:
) shares rose 2.38 percent after the company boosted its share
buyback by $500 million and announced the acquisition of Agila from
Strides for $1.6 billion in cash. Universal Display (NASDAQ:
) rose 2.51 percent after reporting earnings that were in line with
estimates on stronger than expected sales and kept guidance
Notable companies expected to report earnings Thursday
Cablevision Systems Corp (NYSE:
) is expected to report fourth quarter EPS of $0.09 vs. $0.22 a
year ago. Domino's Pizza (NYSE:
) is expected to report fourth quarter EPS of $0.60 vs. $0.52 a
year ago. The Gap Inc. (NYSE:
) is expected to report fourth quarter EPS of $0.71 vs. $0.44 a
year ago. Salesforce.com (NYSE:
) is expected to report fourth quarter EPS of $0.40 vs. $0.43 a
year ago. Sears Holding (NASDAQ:
) is expected to report fourth quarter EPS of $0.98 vs. $0.54 a
On the economics calendar Thursday, the latest U.S. GDP update
for the fourth quarter is to be released as well as initial jobless
claims. Also, the Chicago PMI and the Kansas City Fed Manufacturing
Index are to be released. In addition, the Fed's Sarah Bloom
Raskin, Richard Fisher, and Charles Evans are set to speak.
Good luck and good trading.
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