Futures Higher On Central Banks
U.S. equity futures rose slightly in early pre-market trade
following the FOMC saying that it is prepared to increase or
decrease asset purchases depending on the state of the economy.
Today, the European Central Bank is set to release its interest
rate decision and is expected to cut rates by 25 basis points to
In other news around the markets:
The FOMC said that it was prepared to increase or decrease asset
purchases depending on the economy and that inflation is running
below the long-term objective. Also, the FOMC said that fiscal
policy is restraining growth and that labor markets are improving
but the unemployment rate is still elevated. Japan's monetary base
expanded at a 23.1 percent annualized rate in April, much faster
than March's rate of 19.8 percent, showing that the new BoJ
policies are already having an effect. The Chinese HSBC
Manufacturing PMI slipped to 50.4 in April from 50.6 in March on
expectations of a reading of 50.5, confirming the official PMI
released Wednesday which showed a very modest downtrend in growth
in April form March. Also, the Eurozone Manufacturing Index rose to
46.7 in April from 46.5 in March on expectations of a flat reading.
S&P 500 futures rose 2.2 points to 1,579.50. The EUR/USD was
lower at 1.3166. Spanish 10-year government bond yields fell 1
basis point to 4.13 percent. Italian 10-year government bond yields
fell 1 basis point to 3.9 percent. Gold rose 0.56 percent to
$1,454.30 per ounce.
Asian shares were lower overnight following the weaker than
expected Chinese manufacturing data as well as reports from the
Chinese Securities Journal saying that inflation could increase in
the second quarter (leading to tightening of monetary policy).
Also, unconfirmed rumors were circulating that China will downgrade
its official growth forecast to closer to 7 percent growth. The
Japanese Nikkei Index fell 0.76 percent and the Shanghai Composite
Index fell 0.17 percent and the Hang Seng Index dropped 0.3
percent. Also, the Korean Kospi lost 0.34 percent while Australian
shares fell 0.7 percent.
European shares were mixed ahead of the ECB decision despite the
better than expected manufacturing data. The Spanish Ibex Index
rose 0.39 percent while the Italian FTSE MIB Index fell 0.35
percent. Meanwhile, the German DAX rose 0.15 percent while the
French CAC 40 fell 0.25 percent and U.K. shares slipped 0.28
Commodities were mostly higher overnight following hopes that
the Fed will not halt purchases as soon as originally thought and
could even increase the rate of purchases. WTI Crude futures rose
0.15 percent to $91.17 per barrel and Brent Crude futures rose 0.46
percent to $100.41 per barrel. Copper futures bounced from new 2013
lows by 0.97 percent to $311.00 per pound. Gold was higher and
silver futures rose 0.95 percent to $23.57 per ounce.
Currency markets were rather quiet overnight except for the
Australian dollar which saw massive weakness against many trading
partners. The EUR/USD was lower at 1.3166 and the dollar fell
against the yen to 97.27. Overall, the Dollar Index rose 0.26
percent on strength against the euro and the Swiss franc. Notably,
the Australian dollar lost 0.54 percent against the greenback to
1.0223 and fell 0.65 percent against the yen while losing 0.35
percent against the euro.
Earnings Reported Yesterday
Key companies that reported earnings Wednesday include:
) reported first quarter EPS of $0.12 vs. $0.13 expected on revenue
of $1.46 billion vs. $1.44 billion expected. CVS Caremark (NYSE:
) reported first quarter EPS of $0.83 vs. $0.79 on revenue of
$30.76 billion vs. $30.36 billion expected. Humana (NYSE:
) reported first quarter EPS of $2.95 vs. $1.81 on revenue of
$10.49 billion vs. $10.25 billion expected. MasterCard (NYSE:
) reported first quarter EPS of $6.23 vs. $6.17 on revenue of $1.9
billion vs. $1.93 billion expected. Visa (NYSE:
) reported second quarter EPS of $1.92 vs. $1.81 on revenue of
$2.96 billion vs. $2.85 billion.
Stocks moving in the pre-market included:
) shares rose 1.17 percent pre-market after releasing first quarter
results. Visa (NYSE:
) shares rose 2.13 percent pre-market following its strong second
Notable companies expected to report earnings Thursday
Fortress Investment Group (NYSE:
) is expected to report first quarter EPS of $0.15 vs. $0.11 a year
ago. American International Group (NYSE:
) is expected to report first quarter EPS of $0.87 vs. $1.65 a year
ago. Gilead Pharmaceuticals (NASDAQ:
) is expected to report first quarter EPS of $0.50 vs. $0.46 a year
ago. General Motors (NYSE:
) is expected to report first quarter EPS of $0.54 vs. $0.93 a year
ago. Kraft Foods (NASDAQ:
) is expected to report first quarter EPS of $0.64. LinkedIn (NYSE:
) is expected to report first quarter EPS of $0.31 vs. $0.15 a year
ago. Teva Pharmaceuticals (NYSE:
) is expected to report first quarter EPS of $1.10 vs. $1.47 a year
On the economics calendar Thursday, the European Central Bank
decision is due out at 7:45 am eastern. Also, the Challenger Job
Cut Report is expected as well as initial jobless claims,
international trade data, and productivity and costs data.
Overnight, the Chinese Non-Manufacturing PMI is set to be released
as well as the British Services PMI.
Good luck and good trading.
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advice. All rights reserved.
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