Futures Slip on Earnings, FOMC
U.S. equity futures slipped in early Tuesday trade following
mixed earnings reports Monday and ahead of the FOMC meeting that is
set to end Wednesday. It will be interesting to see the policy
statement on Wednesday, as the new Fed Presidents take their seats
on the FOMC due to the annual rotation and the new FOMC has a
slightly more dovish tilt.
In other news around the markets:
Spanish retail sales in December fell 10.7 percent from the same
period a year ago, worse than the prior reading of -7.8 percent and
below forecasts of a decline of 8.9 percent. China's top economic
think tank, the Chinese Academy of Social Sciences, lifted its 2013
growth forecast to 8.4 percent from 8.2 percent noting that first
half growth should be stronger than the second half. Moody's
downgraded six Canadian banks Monday including Bank of Montreal
) and Toronto Dominion (NYSE:
), citing a deteriorating housing market and high consumer debt
levels. S&P 500 futures declined 1.4 points to 1,495.50. The
EUR/USD was lower at 1.3442. Spanish 10-year government bond yields
declined to 5.24 percent. Italian 10-year government bond yields
rose to 4.221 percent. Gold rose 0.43 percent to $1,662.20 per
Asian shares were mixed overnight led higher by Japanese and
Chinese shares. The Japanese Nikkei Index rose 0.39 percent and the
Shanghai Composite Index rose 0.53 percent while the Hang Seng
Index declined 0.07 percent. Also, the Korean Kospi rose 0.84
percent and Australian shares rose 1.11 percent.
European shares were mostly lower in early trade, albeit
slightly lower, following the weak Spanish retail data. The Spanish
Ibex Index fell 0.25 percent and the Italian MIB Index declined
0.22 percent. Meanwhile, the German DAX declined 0.1 percent and
the French CAC fell 0.26 percent while U.K. shares rose 0.14
Commodities were mixed overnight with energy futures lagging and
metal futures leading. WTI Crude futures were flat at $96.44 per
barrel and Brent Crude futures declined 0.27 percent to $113.17 per
barrel. Copper futures were flat at $366.15 per pound despite
strength in Australian and Chinese shares. Gold was higher and
silver futures rose 0.81 percent to $31.03 per ounce.
Currency markets were mixed overnight with yen and euro crosses
indicating a risk-off feel while the pound recouped some of its
heavy losses from Monday and the Australian dollar rallied. The
EUR/USD was lower at 1.3442, the GBP/USD was higher at 1.5724 after
declining strongly on Monday, and the dollar fell against the yen
to 90.50. Overall, the Dollar Index rose 0.02 percent on strength
against the euro, the Swiss franc, and the Swedish krone. Also, the
AUD/USD was higher at 1.0449, a gain of 0.3 percent.
Stocks moving in the pre-market included:
) shares rose 2.95 percent after the company reported earnings that
beat analyst forecasts. Salesforce.com (NYSE:
) shares declined 1.16 percent pre-market after the company
reported earnings. BMC Software (NASDAQ:
) shares declined 7.15 percent pre-market following the company's
earnings report. Newmont Mining (NYSE:
) shares rose 1 percent pre-market as gold prices rallied strongly.
Notable companies expected to report earnings Tuesday
) is expected to report fourth quarter EPS of $0.28 vs. $0.38 a
year ago. Corning (NYSE:
) is expected to report fourth quarter EPS of $0.33 vs. $0.33 a
year ago. EMC (NYSE:
) is expected to report fourth quarter EPS of $0.52 vs. $0.49 a
year ago. Ford (NYSE:
) is expected to report fourth quarter EPS of $0.26 vs. $0.22
) is expected to report fourth quarter EPS of $1.17 vs. a loss of
$0.21 per share a year ago. Pfizer (NYSE:
) is expected to report fourth quarter EPS of $0.44 vs. $0.50 a
On the economics calendar Tuesday, the January FOMC meeting
begins today and the Redbook is due out. Also, the S&P
Case-Shiller Home Price Index is due out and consumer confidence
data is expected. In addition, the Treasury is set to auction
4-week bills and 5-year notes. Overnight, Spanish GDP data is due
out and Italian and German bond auctions are expected.
Good luck and good trading.
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