Futures Slip on Weak Euro Data
U.S. equity futures declined in overnight trading as weak retail
sales data in the eurozone sent markets lower. Also, earlier this
morning, it was reported that the eurozone unemployment rate
increased to a new record-high of 11.8 percent from 11.7 percent in
the past month. Also, weak German export data declined in the past
month, further weighing on markets.
UPDATE: German Factory Orders were released as falling 1.8
percent in November from October, well below the consensus forecast
of a 1.4 percent decline.
In other news around the markets:
Spain increased in net borrowing target for 2013 by 7.5 percent
from its September budget. The increase in borrowing needs is a
further sign that Spain still has a long way to go to right its
ship and get its finances back in order. S&P released a report
on Japan overnight stating that hopes for reflationary policies
need to be tempered and looks at past attempts as signs that there
is a high probability of failure of policies. Unless swift action
is taking on the Debt Ceiling, the Bipartisan Policy Center
believes that the U.S. could default as soon as February 15 and
most likely by March 1. S&P 500 futures fell 2.9 points to
1,452.90. The EUR/USD was flat at 1.3116. Spanish 10-year
government bond yields fell to 5.09 percent. Italian 10-year
government bond yields fell to 4.32 percent. Gold rose 0.47 percent
to $1,654.10 per ounce.
Asian shares were lower overnight on Debt Ceiling and global
macroeconomic fears. The Japanese Nikkei Index fell 0.86 percent
and the Shanghai Composite Index fell 0.41 percent while the Hang
Seng Index fell 0.94 percent in Hong Kong trading. Also, the Korean
Kospi fell 0.66 percent and Australian shares declined 0.57
European shares were mostly higher overnight, albeit modestly,
despite the weak data released earlier. The Spanish Ibex Index rose
0.06 percent and the Italian MIB Index rose 0.35 percent, driving
most peripheral shares higher. However, Spanish shares have slipped
slightly since the budget data was released. Meanwhile, the German
DAX fell 0.15 percent and the French CAC rose 0.36 percent while
U.K. shares gained a modest 0.08 percent.
Commodities were mostly higher overnight despite weak data in
Europe. WTI Crude futures rose 0.24 percent to $93.41 per barrel
and Brent Crude futures rose 0.23 percent to $111.66 per barrel.
Copper futures declined 0.1 percent to $367.45 per pound as
investors had fears over global growth and specifically the Chinese
economy. Gold was higher and silver futures rose 0.64 percent to
$30.28 per ounce.
Currency markets were rather quiet overnight after significant
price moves over the past week or so and major pairs were largely
unchanged. The EUR/USD was basically flat at 1.3116 and the dollar
declined against the yen to 87.48. Overall, the Dollar Index
declined slightly on weakness against the yen and the Canadian
dollar; however, the greenback was stronger against the pound, the
Swiss franc, and the Swedish krone overnight. Notably, the EUR/JPY
pair declined back below 115 overnight and the pound was just
Stocks moving in the pre-market included:
) shares declined 0.17 percent pre-market as a 787 Dreamliner
operated by Japan Airlines caught on fire at Boston's Logan Airport
Monday. Delta Air Lines (NYSE:
) shares rose 0.46 percent pre-market as the company's new partner,
Virgin America, appointed a new CEO with lots of American airline
experience, bolstering hopes that the new partnership will payoff.
) shares declined 0.63 percent pre-market as Nat Gas futures slid
nearly 1 percent as winter weather remained rather mild across
large swaths of the U.S. EMC (NYSE:
) shares declined 0.54 percent pre-market following the
announcement of a new Joint Venture with Lenovo Monday.
Notable companies expected to report earnings Tuesday
) is expected to kick off fourth quarter earnings season by
reporting fourth quarter EPS of $0.07 vs. a loss of $0.03 per share
a year ago. Apollo Group (NASDAQ:
) is expected to report first quarter EPS of $0.90 vs. $1.28 a year
ago. Monsanto (NYSE:
) is expected to report first quarter EPS of $0.37 vs. $0.23 a year
On the economics calendar Tuesday, the NFIB Small Business
Optimism Index is due out as well as ICSC Store Sales. In addition,
the Redbook is due out and the Treasury is set to auction 4-week
and 52-week bills and 3-year notes. Also, Jeffery Lacker of the
Richmond Fed is set to speak at 3:30 pm eastern.
Good luck and good trading.
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