Futures Flat Following RBA Rate Cut, European Bank Earnings
U.S. equity futures traded near flat following a surprise rate
cut from the Reserve Bank of Australia while earnings from three of
Europe's largest banks reported better than expected earnings.
However, futures awaited key earnings from the U.S. pre-market for
In other news around the markets:
The Reserve Bank of Australia cut its key rate to 2.75 percent from
3.00 percent, citing below trend growth in 2013, peaking resource
sector investment, and inflation lower than expected. The Board
noted that the exchange rate of the Australian dollar has remained
high despite worsening economic conditions and that the Board
decided to use some of its "scope" it mentioned at the previous
meeting to cut rates should the data demand a cut. HSBC (NYSE:
), Societe Generale, and Credit Agricole, three of Europe's largest
banks, all reported earnings overnight that beat expectations and
boosted European markets. Diageo (NYSE:
) CEO Paul Walsh has stepped down and will be succeeded by COO Ivan
Menezes in a move that was expected by markets, although will still
come as a blow to shareholders as Walsh was responsible for
spearheading the new growth strategy of the company over the past
decade. S&P 500 futures rose 0.9 points to 1,614.30. The
EUR/USD was flat at 1.3077. Spanish 10-year government bond yields
fell 4 basis points to 4.07 percent. Italian 10-year government
bond yields fell 4 basis points to 3.88 percent. Gold fell 0.48
percent to $1,461.00 per ounce.
Asian shares were mostly tepid save for the Japanese Nikkei
Index which opened for the first time following key events
including the European Central Bank rate cut and the stronger than
expected U.S. Non-Farm Payrolls Report. The Japanese Nikkei Index
rose 3.55 percent while the Shanghai Composite Index gained 0.2
percent and the Hang Seng Index rose 0.58 percent. Also, the Korean
Kospi fell 0.36 percent and Australian shares fell 0.24
European shares rose following the stronger than expected bank
earnings from around the continent. The Spanish Ibex Index rose
0.61 percent and the Italian FTSE MIB Index rose 1.08 percent.
Meanwhile, the German DAX gained 0.53 percent and the French CAC 40
rose 0.33 percent while U.K. shares added 0.27 percent.
Commodities were mostly lower overnight, reversing the previous
few days of gains. WTI Crude futures fell 0.48 percent to $95.70
per barrel and Brent Crude futures declined 0.44 percent to $105.00
per barrel. Copper futures rose 0.14 percent to $331.50 per pound.
Gold was lower and silver futures declined 0.79 percent to $23.77
Currency markets were rather quiet overnight save for the
Australian dollar which plummeted following the unexpected RBA rate
cut. The EUR/USD was flat at 1.3077 and the dollar fell against the
yen to 99.21. Overall, the Dollar Index was flat on strength
against the Swiss franc and weakness against the yen. Notably, the
Australian dollar declined 0.84 percent against the greenback to
1.0168 while it lost 1.03 percent against the yen to 100.8010.
Earnings Reported Yesterday
Key companies that reported earnings Monday include:
First Solar (NASDAQ:
) reported first quarter EPS of $0.69 vs. $0.75 expected on revenue
of $755.0 million vs. $752.26 million expected. Norwegian Cruise
Line Holdings (NASDAQ:
) reported first quarter EPS of $0.06 vs. $0.03 on revenue of
$527.6 million vs. $523.8 million. Scotts Miracle Grow (NYSE:
) reported second quarter EPS of $1.60 vs. $2.00. Medallion
Financial Corp. (NASDAQ:
) reported first quarter EPS of $0.30 vs. $0.27. Vornado Realty
) reported first quarter EPS of $1.14 vs. $1.89.
Stocks moving in the pre-market included:
) shares fell 0.14 percent pre-market following the management
shake up. HSBC (NYSE:
) shares rose 2.19 percent pre-market following its earnings beat
this morning. Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) shares
rose 1.36 percent following its earnings beat last Friday and
comments from CEO Warren Buffett that spoke to the strength of the
company. Cliff's Natural Resources (NYSE:
) shares rose 3.28 percent pre-market after gaining 5.52 percent
Monday after an upgrade to outperform at FBR Capital.
Notable companies expected to report earnings Tuesday
Acadia Pharmaceuticals (NASDAQ:
) is expected to report a first quarter loss of $0.08 per share vs.
a loss of $0.12 per share a year ago. BMC Software (NASDAQ:
) is expected to report first quarter EPS of $0.93 vs. $0.74 a day
after the company signed a definitive pact to go private to a
consortium of financial buyers. Discovery Communications A (NASDAQ:
) is expected to report first quarter EPS of $0.68 vs. $0.57 a year
ago. DirecTV (NASDAQ:
) is expected to report first quarter EPS of $1.08 vs. $1.07 a year
ago. Molson Coors Brewing Co. (NYSE:
) is expected to report first quarter EPS of $0.34 vs. $0.47 a year
ago. TripAdvisor (NASDAQ:
) is expected to report first quarter EPS of $0.46 vs. $0.38 a year
On the economics calendar Tuesday, weekly chain store sales and
the Redbook are due out followed by consumer credit data. Also, the
Treasury is set to auction 4-week and 3-year notes. Overnight, the
Chinese Trade Balance and German Industrial Production Data are
Good luck and good trading.
to view the Market Wrap for Monday, May 6.
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