Futures Flat on Greek Deal
U.S. equity futures were flat in early Tuesday trade as the
Troika of lenders reached an agreement to disburse Greece's
latest bailout tranches and give the nation more time to repay
its bailout loans. Ministers agreed to cut the interest rate
Greece has to pay on its loans, suspend interest payments for a
decade, and give the country more time to pay back the loans.
In other news around the markets:
- Mark Carney, the current head of the Bank of Canada, has
been nominated to succeed Mervyn King as the Governor of the
Bank of England. Should his appointment go through, he will
become the first foreigner to head the Bank of England.
- The latest revision of U.K. third quarter GDP was released
with the annual growth rate being affirmed at +1.0 percent and
the quarterly rate being revised downwards by 0.1 percent to
-0.1 percent quarter over quarter growth.
- The OECD cut its global growth forecasts overnight,
slashing its estimate for global 2013 GDP growth to 3.4 percent
from 4.2 percent. The OECD cut its U.S. GDP forecast to 2.0
percent from 2.6 percent, its Eurozone forecast to -0.1 percent
from 0.9 percent, and its China forecast to 8.5 percent from
- S&P 500 futures were flat at 1,402.5.
- The EUR/USD was lower at 1.2949 after rising above 1.30
- Spanish 10-year government bond yields fell to 5.608
- Italian 10-year government bond yields rose to 4.769
- Gold fell 0.15 percent to $1,747.00 per ounce.
Asian shares were mostly higher overnight led by growth
markets following the slash of growth rates in the larger
economies by the OECD. The Japanese Nikkei Index rose 0.37
percent while the Shanghai Composite fell 1.3 percent and the
Hang Seng Index fell 0.08 percent. Also, the Korean Kospi rose
0.87 percent and Australian shares rose 0.74 percent.
European shares were higher following the Greek aid deal
despite the cut in growth forecasts by the OECD. The Spanish Ibex
Index rose 0.32 percent in early trade and the Italian MIB Index
rose 0.2 percent as Greek shares rallied 0.72 percent. Meanwhile,
the German DAX rose 0.48 percent, the French CAC 40 rose 0.29
percent, and U.K. shares rose 0.38 percent.
Commodities were mixed overnight on mixed sentiment as price
moves remained rather small. WTI Crude futures rose 0.05 percent
to $87.78 per barrel and Brent Crude futures fell 0.1 percent to
$110.81 per barrel. Copper futures rose 0.18 percent to $355.50
per pound following Australian shares higher despite weakness in
China. Gold was lower and silver futures fell 0.32 percent to
$34.12 per ounce.
Currency markets were rather volatile overnight, with the euro
rallying into the Greek decision and selling off heavily
afterwards. The EUR/USD was lower at 1.2949 and the dollar rose
against the yen 82.07. Overall, the Dollar Index rose 0.08
percent to 80.32 on strength against the euro, the Swedish Krone,
and the Swiss Franc. The Canadian dollar was slightly stronger
relative to the greenback in early trade after falling initially
on the news that central bank chief Mark Carney is set to leave
for England. Also, the pound gained initially and has continued
to rally. Lastly, the Aussie dollar was stronger highlighting a
positive risk tone in currency markets.
Stocks moving in the pre-market included:
- Halliburton (NYSE:
) shares rose 0.52 percent pre-market as the stock recouped its
20-day moving average.
- Bank of America (NYSE:
) shares rose 0.46 percent pre-market as regulators ruled that
lawsuits against its Countrywide unit will be limited.
- Monsanto (NYSE:
) shares fell 0.24 percent in the pre-market following news
that the Punjab government in India will require the company to
build a new research facility for maize research to continue
doing business in the area.
- Hewlett-Packard (NYSE:
) shares fell 0.16 percent pre-market as investors filed a
class action lawsuit following the reported fraud and lack of
due diligence in the acquisition of Autonomy.
The earnings calendar is rather light Tuesday. Notable
companies expected to report earnings Wednesday include:
- Big Lots (NYSE:
) is expected to report third quarter EPS of -$0.24 vs. $0.06 a
- Green Mountain Coffee Roasters (NASDAQ:
) is expected to report fourth quarter EPS of $0.48 vs. $0.47 a
On the economics calendar Tuesday, speeches from Fed officials
including Richard Fisher, Dennis Lockhart, and Ben Bernanke are
expected. Also, same store sales, durable goods, and the Redbook
are due out. Later, the S&P Case-Shiller Home Price Index and
the FHFA Home Price Index will shed further light on the housing
sector and consumer and investor confidence surveys are due out.
Lastly, the Treasury is set to auction 4-week bills and 2-year
Good luck and good trading.
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