Futures Rise Ahead of Central Banks, Jobless Claims as Nikkei
Approaches Bear Market Territory
U.S. equity futures rose in early pre-market trade ahead of key
interest rate decision from both the European Central Bank and the
Bank of England. Also, the initial jobless claims report in the
U.S. and the Challenger job cuts estimate set up the stage for
Friday's much anticipated Employment Situation Report.
In other news around the markets:
The Japanese Nikkei 225 Index closed below 13,000 for the first
time in two months overnight and is down 19 percent from the high
reached back on May 22. If the index declines one more percent, it
officially enters bear market territory after rising over 60
percent from 2012's low. France's unemployment rate rose to 10.8
percent in the first quarter but was better than the expected 10.9
percent. Further, the fourth quarter's reading was revised lower to
10.5 percent from 10.6 percent, although the numbers still remain
high in absolute terms. Spain had a strong bond auction of 2-, 3-,
and 10-year bonds overnight with demand outpacing the targeted 3-4
billion euros. Spain has now raised over 60 percent of its targeted
debt funding for the year with more than half of the year
remaining. S&P 500 futures rose 5.8 points to 1,613.80. The
EUR/USD was higher at 1.3118 after posting a 4-week high overnight
above 1.3120. Spanish 10-year government bond yields rose 1 basis
point to 4.45 percent. Italian 10-year government bond yields were
flat at 4.14 percent. Gold rose 0.31 percent to $1,402.90 per
Asian shares were lower overnight as the Nikkei dropped to a two
and a half week low. The Japanese Nikkei 225 Index declined 0.85
percent and the broad Topix Index declined 1.77 percent. The
Shanghai Composite Index shed 1.12 percent as the Hang Seng Index
lost 1.05 percent. Also, the Korean Kospi declined 1.52 percent and
Australian shares fell 1.12 percent.
European shares were less pessimistic in early trade ahead of
the central bank decisions as Spanish shares following the strong
debt auction and other data earlier this week. The Spanish Ibex
Index gained 0.77 percent while Italian shares dipped 0.12 percent.
Meanwhile, the German DAX rose 0.13 percent and the French CAC 40
Index gained 0.28 percent as U.K. shares eked out a gain of 0.03
Commodities were mixed overnight as energy futures gained
following the crude inventory report Wednesday which showed crude
inventories declined nearly eight times the expected drop in the
week. WTI Crude futures rose 0.63 percent to $94.33 per barrel and
Brent Crude futures gained 0.36 percent to $103.41 per barrel.
Copper futures declined 0.86 percent to $334.25 per pound as global
growth fears weighed. Gold was higher and silver futures fell 0.03
percent to $22.47 per ounce.
Currency markets saw good action overnight as the euro and the
pound set up nicely ahead of their respective central banks. The
EUR/USD was higher at 1.3118 and the dollar gained slightly against
the yen to 99.15. Overall, the Dollar Index fell 0.2 percent on
weakness against the pound, the euro, the Canadian dollar, and the
Earnings Reported Yesterday
Key companies that reported earnings Wednesday include:
Brown Forman (NYSE:
) reported fourth quarter EPS of $0.52 vs. $0.46 expected on
revenue of $866.00 million vs. $861.73 million expected. Hovnanian
) reported second quarter EPS of $0.01 vs. an expected loss of
$0.05 per share. Joseph A Bank (NASDAQ:
) reported first quarter EPS of $0.29 vs. $0.29 expected on revenue
of $196.1 million vs. $195.4 million expected. Francesca's Holdings
) reported first quarter EPS of $0.26 vs. $0.26 expected on revenue
of $79.0 million vs. $79.56 million expected. Verifone Systems
) reported second quarter EPS of $0.42 vs. $0.47 on revenue of
$426.3 vs. $440.3 million expected. The company also lowered
Stocks moving in the pre-market included:
Verifone Systems (NYSE:
) shares declined a whopping 18 percent pre-market after the
company reported weak earnings and cut guidance again. Vera Bradley
) shares declined 10.95 percent pre-market after the company also
cut guidance. Thermo Fischer Scientific (NYSE:
) shares declined 1.39 percent pre-market as the company amended
the terms of its deal to purchase Life Technologies (NASDAQ:
). Thermo announced a $2 billion secondary offering as part of the
terms. Tesla (NASDAQ:
) shares rose 0.56 percent pre-market after staging a late intraday
rally Wednesday on a technical bounce.
Notable companies expected to report earnings Thursday
Thor Industries (NASDAQ:
) is expected to report third quarter EPS of $0.88 vs. $0.78 a year
ago. Vail Resorts (NYSE:
) is expected to report third quarter EPS of $2.74 vs. $2.17 a year
ago. CIENA Corp. (NASDAQ:
) is expected to report a second quarter loss of $0.01 vs. EPS of
$0.04 a year ago. Titan Machinery (NASDAQ:
) is expected to report first quarter EPS of $0.19 vs. $0.36 a year
On the economics calendar Thursday, the Bank of England and the
European Central Bank are both expected to release their interest
rate decisions early this morning. Later, the Challenger job cuts
report is due out with the weekly jobless claims report and the
Canadian Ivey PMI is expected to be released. Overnight, German
industrial production data is due out.
Good luck and good trading.
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