Futures rise on stimulus hopes.
U.S. equity futures rose in early Thursday trading as the Fed
signaled that it may be forced to do more easing under its third
quantitative easing program to stimulate the economy. Should the
U.S. go over the fiscal cliff, the Fed, in its minutes of its
latest meeting of the FOMC, said that members discussed
increasing the size of asset purchases once Operation Twist
expires at the year end.
In other news around the markets:
- Eurozone GDP fell 0.1 percent in the third quarter as
compared to the previous quarter, better than economist
expectations of a drop of 0.2 percent but still showing that
the Eurozone is still in a recession. Strength in France and a
slower than expected rate of contraction in Italy were offset
by weakness in Spain and the Netherlands, which saw GDP drop
1.1 percent in the quarter while Germany was in line.
- EU Commissioner for Economic and Monetary Affairs Olli Rehn
spoke overnight, stating that he believes that the economy in
Europe is bottoming, that the ECB has helped to lower yields on
peripheral debt, and that continued credit contraction weighs
- As European leaders mull creating a banking union, it
appears as though leaders will attempt to attract Swedish and
Danish banks into the union.
- S&P 500 futures rose 4.9 points to 1,357.90.
- The EUR/USD was higher at 1.2758.
- Spanish 10-year government bond yields fell to 5.924
- Italian 10-year government bond yields fell to 4.941
- Gold futures fell 0.39 percent to $1,723.40 per ounce.
Asian shares were lower overnight except for Japan on fears
that fiscal cliff will have negative effects on global trade and
affect Asian exporters. The Japanese Nikkei Index rose 1.9
percent and the Shanghai Composite Index fell 1.22 percent while
the Hang Seng Index dropped 1.55 percent in Hong Kong trading.
Also, the Korean Kospi dropped 1.32 percent and Australian shares
fell 0.89 percent.
European shares were mostly lower following the GDP data and
fears over the finances of Greece, Italy and Spain. The Spanish
Ibex Index rose 0.1 percent while the Italian MIB Index fell 0.48
percent while Greek shares dropped 1.14 percent. Meanwhile, the
German DAX slipped 0.54 percent and the French CAC dropped 0.34
percent while U.K. shares fell 0.39 percent.
Commodities were mostly weaker in overnight trade led lower by
metals. WTI Crude futures fell 0.01 percent to $86.31 per barrel
and Brent Crude futures rose 0.43 percent to $110.08 per barrel.
Copper futures rose 0.46 percent to $346.95 per pound while gold
was lower and silver futures dropped 0.7 percent to $32.65 per
Currency markets were mixed overnight as the euro gained
against most trading partners. The EUR/USD was higher and the
dollar rose against the yen to 81.19. Overall, the Dollar Index
rose 0.07 percent on strength against the yen, the Canadian
dollar, and the Swiss franc. Also, the Aussie dollar was slightly
weaker overnight, falling against the euro and the U.S.
Stocks moving in the pre-market included:
- Bank of America (NYSE:
) shares rose 1.11 percent as the company is set to purchase
notes issued by MBIA to block an amendment to a lawsuit against
- BP (NYSE:
) shares rose 0.32 percent pre-market as the company is close
to settling claims with the government over the oil spill
despite hints that the firm could face criminal charges.
- Pepsi (NYSE:
) shares rose 0.63 percent in pre-market trading despite
breaking below its 200-day moving average yesterday.
- NetApp (NASDAQ:
) shares rose 10.21 percent pre-market as the company reported
Notable companies expected to report earnings Thursday
- Aruba Networks (NASDAQ:
) is expected to report first quarter EPS of $0.17 vs. $0.14 a
- Buckle Inc. (NYSE:
) is expected to report third quarter EPS of $0.84 vs. $0.81 a
- Autodesk (NASDAQ:
) is expected to report third quarter EPS of $0.44 vs. $0.44 a
- Gamestop (NYSE:
) is expected to report third quarter EPS of $0.33 vs. $0.39 a
year ago. Look for comments on the launch of
) Call of Duty: Black Ops 2 and Microsoft's (NASDAQ:
) Halo 4.
- Marvell Technology Group (NASDAQ:
) is expected to report third quarter EPS of $0.20 vs. $0.40 a
- Sears Holdings (NASDAQ:
) is expected to report a third quarter loss of $2.18 per share
vs. a $2.57 per share loss a year ago.
- Target (NYSE:
) is expected to report third quarter EPS of $0.77 vs. $0.82 a
- Viacom (NASDAQ:
) is expected to report third quarter EPS of $1.16 vs. $1.06 a
- Wal-Mart (NYSE:
) is expected to report third quarter EPS of $1.07 vs. $0.97 a
On the economics calendar Thursday, weekly jobless claims and
continuing claims are due out. Also, inflation data in the CPI is
set to be released alongside the Empire State Manufacturing Index
and the Philly Fed Index is due out as well. Fed Chairman
Bernanke is set speak on the housing market and Richmond Fed
President Lacker is set to speak on the economic outlook in West
Virginia. In addition, Dallas Fed President Richard Fisher is set
to speak at Stanford University, Philly Fed President Plosser is
set to speak at the Cato Institute, and New York Fed President
Dudley is to speak in New York. Also, the Chicago Fed's
International Banking Conference kicks off.
Good luck and good trading.
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