Futures Rise After Monday Losses
U.S. equity futures rose in pre-market trading after U.S. and
global markets suffered losses Monday on the back of renewed
sovereign stresses in the eurozone. However, the repricing of the
sovereign and geopolitical risk halted Tuesday and shares rose.
In other news around the markets:
Retail sales in the eurozone fell 0.8 percent in December, worse
than forecasts of a decline of 0.5 percent, and the November
reading was revised lower. The Eurozone Non-Manufacturing PMI was
reported as expanding in January to 48.6 from 47.8 in December and
was better than the initial estimate of 48.3. OECD Chief Angel
Guerria spoke overnight, saying that the recent moves were a
reversal of the normalization of yields for Spain and Italy and
that politics are responsible for the recent uptick in yields.
S&P 500 futures rose 5.4 points to 1,498.80. The EUR/USD was
was higher at 1.3539. Spanish 10-year government bond yields fell
slightly to 5.44 percent. Italian 10-year government bond yields
fell slightly to 4.47 percent. Gold rose 0.11 percent to $1,678.20
Asian shares were weak on the back of European and American
weakness as the increased political risk in Spain and Italy weighed
on markets. The Japanese Nikkei Index fell 1.9 percent and the
Shanghai Composite Index rose 0.2 percent while the Hang Seng Index
declined 2.27 percent. Also, the Korean Kospi fell 0.77 percent and
Australian shares fell 0.51 percent as the RBA kept rates on hold
at 3.00 percent overnight.
European shares were mostly higher in apparent reversals of
Monday's flows. The Spanish Ibex Index rose 1.02 percent, led by
tech stocks and financials, and the Italian FTSE MIB Index rose
0.57 percent on strength in financials. Meanwhile, the German DAX
rose was flat and the French CAC rose 0.55 percent while U.K.
shares rose 0.36 percent.
Commodities were mostly higher overnight following weakness
Monday. WTI Crude futures rose 0.44 percent to $96.59 per barrel
and Brent Crude futures rose 0.45 percent to $116.11 per barrel.
Copper futures declined 0.07 percent to $376.60 per pound after the
RBA decision. Gold was higher and silver futures rose 0.67 percent
to $31.94 per ounce.
Currency markets had a slight risk-on bias over the past few
hours as the euro rallied and the yen fell. The EUR/USD was higher
at 1.3539 and the dollar rose against the yen to 92.96. Overall,
the Dollar Index fell 0.04 percent on weakness against the euro,
the pound, and the Swedish Krone, which rallied on stronger Brent
prices. Also, the Aussie dollar was weak following inaction from
the RBA, with the AUD/USD falling and the AUD/JPY lagging other yen
crosses while the EUR/AUD rose.
Stocks moving in the pre-market included:
) shares rose 0.6 percent pre-market as Bloomberg reports that a
deal could be announced today to take the company private in a LBO,
with Silverlake owning $1 billion of the equity and Microsoft
) investing $2 billion. Yum! Brands (NYSE:
) shares fell 6.44 percent pre-market as the company reported weak
fourth quarter earnings and lowered guidance. The company decreased
guidance for Chinese sales in January and February by about 25
percent. JC Penney (NYSE:
) shares fell 2.69 percent pre-market as a group of bond investors
have alleged that the company is already in default. Moody's (NYSE:
) shares declined 0.91 percent pre-market after declining over 10
percent Monday as prosecutors are suing rival Standard and Poor's,
owned by McGraw Hill (NYSE:
), for ratings procedures related to risky mortgage backed
securities issued in he build up to the financial crisis. McGraw
Hill shares declined 0.38 percent pre-market after falling over 13
Notable companies expected to report earnings Tuesday
Archer Daniels Midland (NYSE:
) is expected to report fiscal second quarter EPS of $0.56 vs.
$0.45 a year ago. Chipotle Mexican Grill (NYSE:
) is expected to report fourth quarter EPS of $1.96 vs. $1.81 a
year ago. HCA Holdings (NYSE:
) is expected to report $0.83 vs. $0.94 a year ago. Panera Bread
) is expected to report fourth quarter EPS of $1.74 vs. $1.42 a
year ago. Sirius XM Radio (NASDAQ:
) is expected to report fourth quarter EPS of $0.02 vs. $0.01 a
On the economics calendar Tuesday, same store sales, the
Redbook, and the ISM Non-Manufacturing Index are expected. Also,
Elizabeth Duke of the Fed Board of Governors is set to speak. In
addition, the Treasury is set to auction 4- and 52-week bills.
Overnight, German Factory Orders will be watched.
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
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