Futures Lower After Asia Sell-Off
U.S. equity futures were lower in early pre-market trade
following a sharp sell-off overnight in Asia, which saw Japanese
stocks drop 4 percent. Also, markets will have their eyes on Elon
Musk as his two companies are set to report earnings today.
In other news around the markets:
Japanese stocks led declines overnight on taper fears and also
fears that Chinese trade growth might continue to slow throughout
the second half of the year. The China Securities Journal wrote
that a State Information Report highlighted that the government now
sees more downside to trade figures. The Bank of England, in its
Inflation Report, tied any future rate hikes to the unemployment
rate for the first time. The BoE now said that it will not raise
rates until the unemployment rate crosses the 7 percent threshold,
which it does not see until 2016. BoE Governor Mark Carney, in the
following press conference, said that the BoE calls the guidance
"explicit rate guidance" and noted that changes in inflation or
financial stability may not tempt the Bank to change its policy
path. S&P 500 futures fell 5.4 points to 1,688.50. The EUR/USD
was lower at 1.3268. Spanish 10-year government bond yields rose 2
basis points to 4.59 percent. Italian 10-year government bond
yields rose 1 basis point to 4.26 percent. Gold fell 0.38 percent
to $1,276.60 per ounce.
Asian shares were lower overnight with Japanese stocks leading
declines. The Japanese Nikkei 225 Index fell 4.00 percent and the
Topix Index dropped 3.22 percent. In Hong Kong, the Hang Seng Index
fell 1.53 percent while the Shanghai Composite Index dropped 0.67
percent in China. Also, the Korean Kospi fell 1.48 percent and
Australian shares declined 1.85 percent.
European shares were mixed in early trade. The Spanish Ibex
Index declined 0.37 percent while the Italian FTSE MIB Index rose
0.45 percent. Meanwhile, the German DAX fell 0.47 percent and the
French CAC 40 was flat while U.K. shares erased earlier losses and
traded down only 0.04 percent.
Commodities were mostly lower overnight on global growth fears.
WTI Crude futures did gain 0.24 percent to $105.55 per barrel but
Brent Crude futures declined 0.15 percent to $108.22 per barrel.
Copper futures fell 0.16 percent to $316.80 per pound. Gold was
lower and silver futures fell 1.19 percent to $19.29 per ounce.
Currency markets were on the move as the pound sterling got
whacked following the BoE news. The EUR/USD was lower at 1.3272 and
the dollar fell against the yen to 97.06 while the pound dropped
0.9 percent against the dollar to 1.5211. Overall, the Dollar Index
rose 0.22 percent on strength against the pound, the Canadian
dollar, the euro, and the Swiss franc.
Earnings Reported Yesterday
Key companies that reported earnings Tuesday include:
) reported second quarter EPS of $1.03 vs. $1.01 expected on
revenue of $11.58 billion vs. $11.64 billion expected. Disney also
disclosed that it will take a large loss in the fiscal fourth
quarter due to the Lone Ranger. First Solar (NASDAQ:
) reported second quarter EPS of $0.39 vs. $0.53 expected on
revenue of $519.8 million vs. $721.08 million expected. CVS (NYSE:
) reported second quarter EPS of $0.97 vs. $0.96 expected on
revenue of $31.25 billion vs. $31.14 billion expected.
) reported second quarter EPS of $0.46 vs. $0.44 expected on
revenue of $22.54 billion vs. $22.87 billion expected. 21st Century
) reported fourth quarter EPS of $0.42 vs. $0.34 expected on
revenue of $7.21 billion vs. $7.12 billion expected.
Stocks moving in the pre-market included:
First Solar (NASDAQ:
) shares dropped 10.59 percent pre-market on the earnings miss.
Bank of America (NYSE:
) shares fell 2.25 percent pre-market after the bank was sued by
the Justice Department over alleged mortgage fraud in a 2008
securitization. Finisar (NASDAQ:
) reported preliminary Q1 data that was much better than expected
and shares rose 16.57 percent pre-market. Herbalife (NYSE:
) shares rose slightly in the pre-marlet by 0.12 percent as Carl
Icahn reiterated that he sees the stock going a lot higher.
Notable companies expected to report earnings Wednesday
Time Warner (NYSE:
) is expected to report second quarter EPS of $0.76 vs. $0.59 a
year ago on revenue of $7.1 billion vs. $6.74 billion a year ago.
Green Mountain Coffee Roasters (NASDAQ:
) is expected to report third quarter EPS of $0.77 vs. $0.52 a year
ago on revenue of $981.9 million vs. $869.19 million a year ago.
) is expected to report second quarter EPS of $0.02 vs. $0.08 a
year ago on revenue of $605.54 million vs. $568.34 million a year
ago. Tesla Motors (NASDAQ:
) is expected to report a second quarter loss of $0.17 vs. a loss
of $0.89 a year ago on revenue of $393.67 million vs. $26.65
million a year ago. SolarCity (NASDAQ:
) is expected to report a second quarter loss of $0.38 per share on
revenue of $27.44 million.
On the economics calendar Wednesday, MBA Purchase Applications
are due out followed by a 10-year bond auction, a speech from the
Fed's Sandra Pinalto, and the consumer credit report. Overnight,
the Chinese trade balance and the BoJ interest rate decision and
press conference are expected.
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and
For a recap of Tuesday's market action, read Benzinga's daily
market wrap .
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