Futures Surge as Global Shares Rebound
U.S. equity futures rose sharply in early pre-market trade on
relaxed fears of Federal Reserve tapering of easing, fears which
drove markets lower last week. Eyes will be on key retail earnings
and economic data in Tuesday's session for further direction as
well as comments from the Europe-Next Steps conference in
In other news around the markets:
) announced its intention to acquire Omthera Pharmaceuticals
) for $12.70 per share, a premium of 88 percent over Friday's
closing price. Japanese Prime Minister Shinzo Abe's top economic
adviser Koichi Hamada spoke overnight, saying that Bank of Japan
Governor Kuroda should ease further if he deems necessary and not
let policy be forced by market pressures. Recently, fears have
grown over the rise in bond yields associated with Japan's easing
but these comments seem to be quelling some fears. Christian Noyer,
Banque de France chief and ECB Board Member spoke overnight, saying
that no major central bank has ever lowered deposit rates below
zero into negative territory and mentioned that such policies had
mixed results in smaller countries. The comments come as some
economists still expect the ECB to ease policy further and
potentially cut deposit rates into negative territory. S&P 500
futures rose 11.1 points to 1,661.70. The EUR/USD was lower at
1.2920. Spanish 10-year government bond yields rose 1 basis point
to 4.34 percent. Italian 10-year government bond yields rose 1
basis point to 4.06 percent. Gold fell $7.70 or 0.56 percent to
$1,378.90 per ounce.
Asian shares were stronger overnight on relaxed fears over
Japan's massive easing efforts as well as reduced fears over
China's economy following weaker than expected data last week. The
Japanese Nikkei Index rose 1.2 percent and the Shanghai Composite
Index rose 1.24 percent while the Hang Seng Index gained 1.05
percent. Also, the Korean Kospi gained 0.32 percent and Australian
shares added 0.22 percent.
European shares were higher for the second consecutive day as
U.K. markets reopened Tuesday following a bank holiday on Monday.
The Spanish Ibex Index rose 1.32 percent and the Italian FTSE MIB
Index gained 1.56 percent. Meanwhile, the German DAX rose 1.1
percent and the French CAC 40 gained 1.26 percent while U.K. shares
rallied 1.66 percent.
Commodities were mixed overnight as energy futures rallied while
metal futures were mostly lower as the Dollar continued its trend
of strengthening. WTI Crude futures rose 0.5 percent to $94.62 per
barrel and Brent Crude futures gained 0.89 percent to $103.53 per
barrel. Copper futures added 0.44 percent to $331.00 per pound.
Gold was lower and silver futures declined 1.07 percent to
Currency markets continued to show dollar strength overnight as
the greenback rose against most major trading partners while the
yen resumed its decline. The EUR/USD was lower at 1.2920 and the
dollar gained against the yen to 101.99, a gain of 1.02 percent.
Overall, the Dollar Index gained 0.2 percent on strength against
the yen, the euro, the Swiss franc, and the Canadian dollar.
Notably, the Australian dollar was higher across the board despite
Goldman Sachs making negative comments on the currency.
Earnings Reported Yesterday
Key companies that reported earnings Friday include:
Abercrombie & Fitch (NYSE:
) reported a first quarter loss of $0.09 per share vs. an expected
loss of $0.05 per share on revenue of $838.8 million vs. $942.86
million expected. Foot Locker (NYSE:
) reported first quarter EPS of $0.91 vs. $0.87 expected on revenue
of $1.64 billion vs. $1.63 billion expected.
Stocks moving in the pre-market included:
) shares gained 2.61 percent on the acquisition announcement.
) shares rose 1.56 percent in the pre-market as financials rose as
a sector. Exelon Corp. (NYSE:
) shares declined 1.3 percent, leading utilities lower as reports
showed that power rates are declining and also on apparent sector
rotation into cyclicals such as financials. Ford (NYSE:
) shares rose 1.35 percent pre-market after Barron's made positive
comments on the stock this weekend, saying that earnings will grow
as Europe recovers.
Notable companies expected to report earnings Tuesday
Canadian Solar (NASDAQ:
) is expected to report a first quarter loss of $0.78 per share vs.
a loss of $0.49 per share a year ago. Guidewire Software (NYSE:
) is expected to report first quarter EPS of $0.03 vs. $0.10 a year
ago. Tiffany (NYSE:
) is expected to report first quarter EPS of $0.52 vs. $0.64 a year
On the economics calendar Tuesday, the S&P Case-Shiller
Index kicks off the calendar followed by Consumer Confidence data,
the Richmond Fed Manufacturing Index, and the Dallas Fed
Manufacturing Index. Also, the Treasury is set to auction 3- and
6-month bills and 2-year notes. Overnight, Bank of Japan Governor
Kuroda is expected to speak, German unemployment data, German CPI,
and Brazilian GDP are expected.
Good luck and good trading.
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