Futures Rise After Losses, Italian Elections
U.S. equity futures gained in the pre-market after massive
losses Monday following the turmoil over the Italian elections. It
appears as though no majority will be formed and that Italians will
need to go back to the polls to try to elect a majority
In other news around the markets:
Federal Reserve Bank of Atlanta President Dennis Lockhart sees
asset purchases continuing at least into mid-2013 in a speech given
overnight. To recap the Italian elections, market favorite Bersani
has won a majority in the lower house of Parliament but opposition
parties led by Berlusconi and Grillo have won enough seats to block
a majority in the senate. Japan is set to vote on the new Bank of
Japan appointments on March 14 and 15 and should have a new
Governor at that time. S&P 500 futures rose 3.8 points to
1,490.80. The EUR/USD was higher at 1.3096. Spanish 10-year
government bond yields rose to 5.32 percent. Italian 10-year
government bond yields rose 33 basis points to 4.81 percent. Gold
rose 0.67 percent to $1,597.10.
Asian shares were lower overnight in reaction to the poor
Italian election results. The Japanese Nikkei fell 2.26 percent as
the yen strengthened and the Shanghai Composite Index fell 1.4
percent while the Hang Seng Index fell 1.32 percent. Also, the
Korean Kospi declined 0.47 percent and Australian shares fell 1.03
European shares were also lower overnight led lower by Italian
banks following the election results. The Spanish Ibex Index fell
2.84 percent and the Italian FTSE MIB Index declined 4.52 percent
led by the big Italian banks. Meanwhile, the German DAX fell 1.8
percent and the French CAC fell 2.07 percent while U.K. shares
declined 1.28 percent.
Commodities were weak overnight as the market had a broad
risk-off tone after the election results. WTI Crude futures fell
0.84 percent to $92.23 per barrel and Brent Crude futures fell 0.99
percent to $113.32 per barrel. Copper futures fell 0.32 percent
overnight as Australian stocks fell and RBA members warned on
further rate cuts. Gold was higher and silver futures fell 0.25
percent to $28.98 per ounce.
Currency markets were more stable overnight after the massive
volatility of Monday which saw major pairs trade in massive ranges.
The EUR/USD was higher at 1.3096 and the dollar rose against the
yen to 92.02. Overall, the Dollar Index rose 0.05 percent on
strength against the yen, the Swiss franc, and the Canadian dollar.
It is important to note that the EUR/JPY traded in an astounding 6
big figure range Monday, seemingly flushing out the levered
Stocks moving in the pre-market included:
) shares fell 2.24 percent pre-market after the company reported
earnings and lowered guidance. McDonald's (NYSE:
) shares rose 1.29 percent as the company ramps up operations in
Russia. Dow Chemical (NYSE:
) shares rose 3.17 percent pre-market as the company spoke of
benefits from America becoming energy independent. General Motors
) shares rose 2.54 percent pre-market as the government looks to
sell the last of its stake in the automaker.
Notable companies expected to report earnings Tuesday
) is expected to report second quarter EPS of $4.75 vs. $4.15 a
year ago. Bank of Montreal (NYSE:
) is expected to report fourth quarter EPS of $1.47 vs. $1.42 a
year ago. First Solar (NASDAQ:
) is expected to report fourth quarter EPS of $1.76 vs. $1.26 a
year ago. Home Depot (NYSE:
) is expected to report fourth quarter EPS of $0.64 vs. $0.50 a
year ago. Macy's (NYSE:
) is expected to report fourth quarter EPS of $1.99 vs. $1.70 a
year ago. Priceline.com (NASDAQ:
) is expected to report fourth quarter EPS of $6.54 vs. $5.37 a
year ago. RadioShack (NYSE:
) is expected to report a fourth quarter loss of $0.05 vs. EPS of
$0.12 a year ago. TiVo (NASDAQ:
) is expected to report a fourth quarter loss of $0.11 vs. EPS of
$0.06 a year ago.
On the economics calendar Tuesday, Chairman Bernanke begins his
two-day testimony in Washington. Also, Chain Store Sales and the
Redbook are due out followed by the FHFA House Price Index, the
Case-Shiller Home Price Index, and New Home Sales. In addition,
consumer confidence data and the Richmond Fed Manufacturing Index
are expected. Lastly, the Treasury is set to auction 4-week bills
and 5-year notes. Overnight, British GDP data and Italian auctions
should move markets.
Good luck and good trading.
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