Futures Higher On Japan, Eurozone
U.S. equity futures traded higher overnight on reports out of
Japan and the eurozone. Japan may look to cut corporate taxes
following the weak GDP print Monday and eurozone data showed
improvement early Tuesday, both acting as factors in the early
In other news around the markets:
Nikkei reported that Japanese Prime Minister Shinzo Abe is
considering cutting the corporate tax rate. The move would be a way
to ease the economic burden of the sales tax increase and PM Abe
will look for businesses to begin raising wages in response to the
tax cut. The German ZEW Economic Sentiment Index rose to 42.0 in
August from 36.3 in July on expectations of a reading of 40.0, the
highest reading since March. The reading shows that Germans are
becoming more confident about the economy and the survey tends to
act as a leading indicator for European growth. British inflation
data was released overnight and revealed that CPI inflation rose at
a 2.8 percent annualized rate in July, slowing from the 2.9 percent
rate in June. Core Producer Prices rose 1.1 percent, slower than
the expected 1.2 percent. S&P 500 futures rose 6.1 points to
1,693.20. The EUR/USD was higher at 1.3309. Spanish 10-year
government bond yields fell 1 basis point to 4.47 percent. Italian
10-year government bond yields fell 1 basis point to 4.16 percent.
Gold rose 0.12 percent to $1,335.80.
Asian shares were higher overnight with Japanese stocks leading
gains on the proposed tax cut plan. The Japanese Nikkei 225 Index
rose 2.57 percent and the Topix Index gained 1.99 percent. In Hong
Kong, the Hang Seng Index rose 1.21 percent and the Shanghai
Composite Index rose 0.23 percent in China. Also, the Korean Kospi
gained 1.5 percent and Australian shares rose 0.96 percent.
European shares were higher on the stronger than expected ZEW
survey. The Spanish Ibex Index rose 0.62 percent and the Italian
FTSE MIB Index gained 0.74 percent. Meanwhile, the German DAX rose
0.87 percent and the French CAC 40 Index gained 0.44 percent while
U.K. shares rose 0.65 percent.
Commodities were were higher overnight on broad risk-on
sentiment. WTI Crude futures rose 0.69 percent to $106.84 per
barrel and Brent Crude futures rose 0.64 percent to $109.67 per
barrel. Copper futures rose 0.85 percent. Gold was higher and
silver futures rose 1.62 percent to $21.69 per ounce.
Currency markets were on the move as the dollar gained and the
yen sold off sharply on the tax cut proposal. The EUR/USD was
higher at 1.3309 and the dollar rose against the yen to 97.92.
Overall, the Dollar Index rose 0.24 percent on strength against the
yen, the Canadian dollar, and the Swiss franc.
Earnings Reported Yesterday
Key companies that reported earnings Monday include:
) reported fourth quarter EPS of $0.50 vs. $0.55 expected on
revenue of $11.6 billion vs. $11.62 billion expected. Buckeye
) reported fourth quarter EPS of $0.58 vs. $0.56 a year ago. NQ
) reported second quarter EPS of $0.26 vs. $0.20 expected on
revenue of $41.4 million vs. $39.34 million expected. Sina (NASDAQ:
) reported second quarter EPS of $0.21 vs. $0.12 expected on
revenue of $152.8 million vs. $145.18 million expected.
Stocks moving in the pre-market included:
) shares rose 7.28 percent after the company beat earnings
estimates and raised sales guidance. NQ Mobile (NYSE:
) shares rose 6.92 percent pre-market after the company also beat
earnings estimates and raised sales guidance. J.C. Penney (NYSE:
) shares rose 0.99 percent pre-market after CNBC's Scott Wapner
reported that Glenview Asset Management had not taken a side in the
boardroom debate. Then, Reuters reported that Pershing Square's
Bill Ackman was set to resume amicable talks with the board as soon
as last night. Yum! Brands (NYSE:
) shares fell 3.99 percent pre-market after the company reported
worse than expected China same store sales data. The company
reported China SSS fell 13 percent with sales at KFC restaurants
falling 16 percent and Pizza Hut sales rising 3 percent. The
company also said it expects SSS to recover and turn positive in
the fourth quarter in China.
Notable companies expected to report earnings Tuesday
Brocade Communications (NASDAQ:
) is expected to report third quarter EPS of $0.12 vs. $0.14 a year
ago on revenue of $518.85 million vs. $555.33 million a year ago.
) is expected to report fourth quarter EPS of $0.38 vs. $0.25 a
year ago on revenue of $377.21 million vs. $306.76 million
expected. JDS Uniphase (NASDAQ:
) is expected to report fourth quarter EPS of $0.13 vs. $0.15 a
year ago on revenue of $430.64 million vs. $439.3 million a year
On the economics calendar Tuesday, the NFIB Small Business
Optimism Index is due out followed by the retail sales report and
the weekly Redbook. The Fed's Dennis Lockhart is also expected to
speak and the Treasury will auction 4-week bills. Overnight, the
German, French, and eurozone GDP reports are due out as well as the
British employment report and Bank of England Monetary Policy
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and
For a recap of Monday's market action, read Benzinga's daily
market wrap .
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