Futures Lower After New Record Highs
U.S. equity futures traded lower in early pre-market trade after
the S&P 500 made new record highs again Wednesday. However,
strength in bonds and the yen could have been precursors to a
pull-back, which many analysts would see as healthy at these
In other news around the markets:
Industrial production in the U.K. rose faster than expected in
March, growing 0.7 percent compared to forecasts of a rise of 0.2
percent. The European Central Bank slashed its growth forecasts for
the eurozone, cutting its 2013 growth forecast to -0.4 percent from
0.0 percent and its 2014 forecast to 1.0 percent from 1.1 percent.
Australia added a whopping 50,100 new jobs in April compared to
forecasts of just 11,000 jobs added with the unemployment rate
falling to 5.5 percent from 5.6 percent. S&P 500 futures fell 2
points to 1,626.70. The EUR/USD was lower at 1.3140. Spanish
10-year government bond yields were flat at 4.09 percent. Italian
10-year government bond yields fell 1 basis point to 3.83 percent.
Gold fell 0.33 percent to $1,468.60.
Asian shares were mostly lower overnight following mixed Chinese
inflation data. The Japanese Nikkei Index fell 0.66 percent and the
Shanghai Composite Index declined 0.59 percent while the Hang Seng
Index lost 0.14 percent. Also, the Korean Kospi rose 1.18 percent
as the Bank of Korea cuts its key lending rate by 25 basis points
and Australian shares fell 0.03 percent.
European shares were lower in early trade following the
downgraded forecasts from the European Central Bank and ahead of
the Bank of England's interest rate decision. The Spanish Ibex
Index fell 0.67 percent while the Italian FTSE MIB Index declined
1.2 percent. Meanwhile, the German DAX fell 0.18 percent and the
French CAC 40 declined 0.99 percent while U.K. shares lost 0.08
Commodities were mostly lower overnight following the slightly
softer than expected wholesale inflation data from China. WTI Crude
futures fell 0.56 percent to $96.08 per barrel and Brent Crude
futures declined 0.48 percent to $103.84 per barrel. Copper futures
fell 1.23 percent to $332.90 per pound. Gold was lower and silver
futures gained 0.14 percent to $23.96 per ounce.
Currency markets were relatively quiet overnight as the
Australian dollar and the yen led gainers while the euro slumped.
The EUR/USD was lower at 1.3140 and the dollar fell against the yen
to 98.68. Overall, the Dollar Index rose 0.06 percent on strength
against the euro, the Swiss franc, and the Canadian dollar.
Notably, the Australian dollar was strong across the board
following the employment data and the cable rose ahead of the Bank
of England's interest rate decision.
Earnings Reported Yesterday
Key companies that reported earnings Wednesday include:
) reported first quarter EPS of $0.12 vs. $0.04 expected on revenue
of $562.0 million vs. $492.02 million expected. CEO Elon Musk said
that better pricing from suppliers helped margins. Monster Beverage
) reported first quarter EPS of $0.37 vs. $0.46 on revenue of
$484.2 million vs. $501.74 million expected. AOL (NYSE:
) reported first quarter EPS of $0.41 vs. $0.35 on revenue of
$538.3 million vs. $537.15 million expected. Groupon (NASDAQ:
) reported first quarter adjusted EPS of $0.03, in-line with
forecasts, on revenue of $601.4 million vs. $588.92 million. News
) reported third quarter EPS of $0.36, in-line with forecasts, on
revenue of $9.54 billion vs. $9.14 billion expected.
Stocks moving in the pre-market included:
) shares rose over 18 percent pre-market following the better than
expected earnings report and comments from CEO Elon Musk. Groupon
) shares rose rose 11.27 percent pre-market following its better
than expected earnings report. Monster Beverage (NASDAQ:
) shares declined 12.41 percent pre-market following its weaker
earnings report. Yum! Brands (NYSE:
) shares rose 1.4 percent pre-market as inflation in China slows,
easing pressure on margins.
Notable companies expected to report earnings Thursday
The Carlyle Group (NASDAQ:
) is expected to report first quarter EPS of $0.94 on revenue of
$795.65 million. DISH Network (NASDAQ:
) is expected to report first quarter EPS of $0.53 vs. $0.80 a year
ago. Molycorp (NYSE:
) is expected to report a first quarter loss of $0.27 vs. EPS of
$0.18 a year ago. Priceline.com (NASDAQ:
) is expected to report first quarter EPS of $5.27 vs. $4.28 a year
On the economics calendar Thursday, initial jobless claims are
due out followed by wholesale trade data. Also, Fed members Jeffrey
Lacker and Charles Plosser are expected to speak. In addition, the
Treasury is set to auction 30-year bonds. Across the pond, the Bank
of England interest rate decision is due out at 7 am. Overnight,
Russia's interest rate decision and an Italian bill auction are
Good luck and good trading.
to view the Market Wrap for Wednesday, May 8.
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