Futures Higher on Global Stimulus Hopes
U.S. equity futures rose in pre-market trade as investors became
increasingly hopeful of more global easing following weaker than
expected economic data around the world. Also, Goldman Sachs
upgraded global equities to overweight from neutral overnight,
saying investors should hold an overweight position in equities for
the next three months.
In other news around the markets:
The German IFO Business Climate Index for April declined to 104.4
in April from 106.7 in March on expectations of a reading of 106.2.
The chief economist at the IFO said that he does not expect an ECB
rate cut next week and sees more growth in Q2 than in Q1. Apple
) reported fiscal second quarter results that were largely in line
and the company announced an additional $50 billion stock buyback
increasing the total program to $60 billion. Apple is also selling
debt to fund a higher dividend and the buyback and was downgraded
slightly overnight by ratings agencies due to this new debt.
Twitter is reeling from a massive hack yesterday which saw hackers
break into the Associated Press' twitter account and post a fake
tweet saying that bombs had gone off and injured the President.
Market shuddered but quickly recouped losses on the news. S&P
500 futures rose 3.8 points to 1,577.40. The EUR/USD was higher at
1.3018. Spanish 10-year government bond yields declined to 4.26
percent from 4.27 percent. Italian 10-year government bond yields
fell to 3.94 percent from 3.95 percent. Gold rose 1.17 percent to
$1,425.30 per ounce.
Asian shares were higher overnight as the yen weakened boosting
Japanese equities and also on the Goldman call. The Japanese Nikkei
Index rose 2.32 percent and the Shanghai Composite Index bounced
back by 1.55 percent while the Hang Seng Index added 1.73 percent.
Also, the Korean Kospi gained 0.87 percent and Australian shares
rose 1.72 percent despite weaker than expected inflation data.
European shares were mostly overnight save for Italian equities
on hopes of an ECB rate cut next week. Credit Suisse, UBS, Barclays
and Commerzbank all recently updated forecasts and expect a rate
cut next week now. The Spanish Ibex Index rose 1.03 percent as the
Italian FTSE MIB Index declined 0.4 percent. Meanwhile, the German
DAX rose 0.39 percent while the French CAC rose 0.64 percent and
U.K. shares gained 0.28 percent.
Commodities were higher overnight as risk appetite improved on
hopes of further central bank stimulus and increased equity risk
appetite. WTI Crude futures rose 0.78 percent to $89.88 per barrel
and Brent Crude futures gained 0.73 percent to $101.04 per barrel.
Copper futures added 1.87 percent to $316.20 per pound on hopes of
a rebound in the Chinese economy. Gold was higher and silver
futures gained 0.72 percent to $23.03 per ounce.
Currency markets were rather quiet overnight as the yen
continued to slide and the euro ticked higher. The EUR/USD was
higher at 1.3018 and the dollar rose against the yen to 99.58.
Overall, the Dollar Index fell 0.13 percent on weakness against the
euro, the pound, and the Swedish krone.
Earnings Reported Yesterday
Key companies that reported earnings Tuesday include:
) reported fiscal second quarter EPS of $10.09 vs. $10.07 expected
on revenue of $43.6 billion vs. $42.6 billion. The company also
boosted its dividend to $3.05 per share and increased the stock
buyback by $50 billion to $60 billion but cut guidance for both
revenue and margins, noting a higher amount of iPad sales than
expected is hurting margins. Amgen (NASDAQ:
) reported first quarter EPS of $1.96 vs. $1.84 on revenue of $4.24
billion vs. $4.37 billion expected. Broadcom (NASDAQ:
) reported first quarter EPS of $0.65 vs. $0.56 expected on revenue
of $2.01 billion vs. $1.91 billion expected. Coach(NYSE:
) reported first quarter EPS of $0.84 vs. $0.81 expected on revenue
of $1.19 billion vs. $1.18 billion expected. Cree Inc. (NASDAQ:
) reported third quarter EPS of $0.19 vs. $0.34 expected on revenue
of $105.2 million vs. $104.0 million expected. Delta Air Lines
) reported first quarter EPS of $0.10 vs. $0.06 a year ago on
revenue of $8.5 billion vs. $8.51 billion expected. Lockheed Martin
) reported first quarter EPS of $2.33 vs. $2.03 expected on revenue
of $11.07 billion vs. $10.31 billion expected. Norfolk Southern
) reported first quarter EPS of $1.22 vs. $1.15 on revenue of $2.74
billion vs. $2.76 billion expected. AT&T (NYSE:
) reported first quarter EPS of $0.64 vs. $0.64 on revenue of $31.4
billion vs. $31.75 billion expected. Yum! Brands (NYSE:
) reported first quarter EPS of $0.70 vs. $0.57 on revenue of $2.54
billion vs. $3.03 billion expected.
Stocks moving in the pre-market included:
Yum! Brands (NYSE:
) shares rose 4.46 percent pre-market after reporting stronger than
expected earnings. Amgen (NASDAQ:
) shares fell 6.21 percent pre-market following weaker than
expected revenue. Newmont Mining (NYSE:
) shares rose 1.11 percent pre-market as metals prices rose. FedEx
) shares rose 1.21 percent pre-market after beating out UPS (NYSE:
) for a $10.5 billion U.S. Postal Service contract.
Notable companies expected to report earnings Wednesday
) is expected to report first quarter EPS of $1.47 vs. $1.22 a year
ago. Ford Motor Corp. (NYSE:
) is expected to report first quarter EPS of $0.39 vs. $0.39 a year
ago. Hess (NYSE:
) is expected to report first quarter EPS of $1.59 vs. $1.50 a year
ago. NASDAQ OMX Group (NASDAQ:
) is expected to report first quarter EPS of $0.62 vs. $0.61 a year
ago. Qualcomm (NASDAQ:
) is expected to report second quarter EPS of $1.16 vs. $1.01 a
year ago. Proctor & Gamble (NYSE:
) is expected to report third quarter EPS of $0.96 vs. $0.94 a year
ago. Zynga (NASDAQ:
) is expected to report a first quarter loss of $0.04 per share vs.
EPS of $0.06 a year ago.
On the economics calendar Wednesday, MBA Purchase Applications
and the Durable Goods Report is expected as well as a 5-year note
auction from the Treasury. Overnight, the Spanish unemployment rate
and the latest look at British GDP are expected to be released.
Good luck and good trading.
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