Futures flat on France downgrade.
U.S. equity futures were flat in pre-market trading following
the Moody's downgrade of France to Aa1 from Aaa, or one notch.
Moody's also left the rating on negative watch, citing a
worsening growth outlook for Europe's second largest economy.
Moody's is the second of the three major ratings agencies to
downgrade France, following Standard and Poor's in January.
French 10-year government bond yields rose to 2.112 percent.
In other news around the markets:
- The Bank of Japan did not change interest rates and did not
launch any new monetary policies at its meeting overnight,
although the Bank did mention a weakening economic outlook and
- Intel (NASDAQ:
) CEO Paul Otellini announced he is going to step down in May.
The announcement was largely unexpected and investors await the
announcement of a new CEO.
- Spain sold 4.938 billion euros of 12- and 18-month bills,
with yields relatively flat as compared to the previous auction
and on strong demand.
- S&P 500 futures were flat at 1,383.18.
- The EUR/USD was flat at 1.2805
- Spanish 10-year government bond yields fell to 5.872
- Italian 10-year government bond yields fell to 4.868
- Gold fell 0.05 percent to $1,733.60 per ounce.
Asian shares were mixed overnight following the France
downgrade. The Japanese Nikkei Index fell 0.12 percent and the
Shanghai Composite Index dropped 0.4 percent while the Hang Seng
Index fell 0.16 percent. However, the Korean Kospi rose 0.64
percent and Australian shares rose 0.56 percent as the RBA
minutes showed a higher chance of further easing than previously
European shares were mostly lower, led lower by French banks.
The Spanish Ibex Index fell 0.35 percent and the Italian MIB
Index fell 0.76 percent. Meanwhile, the German DAX rose 0.2
percent while the French CAC fell 0.2 percent and U.K. shares
dropped 0.21 percent.
Commodities were mostly lower overnight following Monday's
large gains in commodities markets. WTI Crude futures fell 0.43
percent to $88.90 per barrel and Brent Crude futures fell 0.28
percent to $111.39 per barrel. Copper futures were lower by 0.25
percent to $352.75 despite the positive comments on mining from
the RBA. Gold was slightly lower and silver futures fell 0.09
percent to $33.16 per ounce..
Currency markets were relatively tepid overnight with major
currencies not moving much save for the yen. The EUR/USD was flat
at 1.2805 and the dollar fell against the yen to 81.25. Overall,
the Dollar Index fell 0.06 percent to 80.82 on weakness against
the yen and the pound.
Stocks moving in the pre-market included:
- Apple (NASDAQ:
) shares rose 0.37 percent in the pre-market following a
massive 7.21 percent gain Monday.
- Cliffs Natural Resources (NYSE:
) fell 3.66 percent as the company made significant revisions
to its earnings.
- Credit Suisse (NYSE:
) shares fell 2.6 percent in Swiss trading as the bank
announced a restructuring of its Investment Bank and Private
- Verizon (NYSE:
) shares rose 0.33 percent following a 3.41 percent gain Monday
as investors bought the stock as its yield rose above 5 percent
Notable companies expected to report earnings Tuesday
- Best Buy (NYSE:
) is expected to report second quarter EPS of $0.12 vs. $0.47 a
- Campbell's Soup (NYSE:
) is expected to report first quarter EPS of $0.85 vs. $0.82 a
- Diana Shipping (NYSE:
) is expected to report third quarter EPS of $0.14 vs. $0.33 a
- Hewlett-Packard (NYSE:
) is expected to report fourth quarter EPS of $1.14 vs. $1.17 a
- H.J. Heinz and Co. (NYSE:
) is expected to report second quarter EPS of $0.88 vs. $0.81 a
- Salesforce.com (NASDAQ:
) is expected to report third quarter EPS of $0.32 vs. $0.34 a
On the economics calendar Tuesday, housing starts and building
permits data are due out. In addition, the Fed's Lacker is set to
speak at 9:00 am, Chairman Bernanke is set to speak at noon, and
the Treasury is set to auction 4-week bills. Overnight, trade
balance data from both Japan and Spain are due out and the Bank
of England's Monetary Policy Committee (
) is set to release its minutes, which could hint at further
easing in the future.
Good luck and good trading.
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