Futures Rise on Chinese Investment Plan
U.S. equity futures rose in early Wednesday trading as China
opened up financial markets to further investment from insurers
and increased urbanization plans. The moves serve as ways to
support the banking sector in the country, as insurers can now
use bank securities to manage risks.
In other news around the markets:
- Spain sold 4.251 billion euros of a targeted 4.5 billion
euros of 3-, 7-, and 10-year notes with yields mixed and demand
fairly flat from the previous auction. Bond yields rose in the
secondary market after the auction, as investors did not like
to see Spain unable to fulfill its full target.
- The Eurozone Services PMI rose to 46.7 in November from
46.0 in October, stronger than economist expectations of a 45.7
- European finance ministers have yet to finalize the Banking
Union that is much sought after. Plans are to have a bill
completed by next week for the system.
- S&P 500 futures rose 4 points to 1,409.5.
- The EUR/USD was was slightly lower at 1.3082.
- Spanish 10-year government bond yields rose to 5.348
- Italian 10-year government bond yields rose to 4.462
- Gold rose 0.5 percent to $1,704.30 per ounce.
Asian shares were stronger overnight led by Chinese stocks
following the government shift on insurance investments and
increased investment in urbanization. The Japanese Nikkei rose
0.39 percent while the Shanghai Composite Index rose 2.87 percent
and the Hang Seng Index rose 2.16 percent in Hong Kong trading.
Also, the Korean Kospi gained 0.61 percent and Australian shares
rose 0.37 percent.
European shares rose in early trade as the service sector
contracted less than expected in November. The Spanish Ibex Index
rose 0.18 percent and the Italian MIB Index rose 0.6 percent
despite the uptick in bond yields. Meanwhile, the German DAX rose
0.25 percent and the French CAC gained 0.38 percent while U.K.
shares rose 0.28 percent.
Commodities were higher in overnight trade following the
strength in China and the rebound in European data. WTI Crude
futures rose 0.31 percent to $88.77 per barrel and Brent Crude
futures rose 0.31 percent to $110.18 per barrel. Copper futures
jumped 0.23 percent to $366.40 per pound following the strength
in Chinese markets. Gold was higher and silver futures rose 0.92
percent to $33.11 per ounce..
Currency markets showed a short yen bias in overnight trade as
the Japanese currency weakened against most major currencies. The
EUR/USD was slightly lower at 1.3082 and the dollar rose against
the yen to 82.20. Overall, the Dollar Index rose 0.15 percent to
79.76 on strength against the yen, the Swiss franc, and the
Swedish krone. In addition, the Aussie dollar was moderately
stronger in overnight trade, especially against the greenback and
Stocks moving in the pre-market included:
- Pandora Media (NYSE:
) shares fell 18 percent pre-market as the company reported
earnings that beat expectations but guidance fell short of
- Wells Fargo (NYSE:
) shares rose 0.79 percent pre-market as financials rallied on
broad market strength.
- CBRE Group (NYSE:
) shares fell 3.61 percent pre-market as the company named a
- Carnival Corporation (NYSE:
) shares fell 1.03 percent pre-market as the exchange rate on
its dividend is not as favorable as investors had been
Notable companies expected to report earnings Wednesday
- Francesca Holdings (NASDAQ:
) is expected to report third quarter EPS of $0.22 vs. $0.14 a
- Saic (NYSE:
) is expected to report third quarter EPS of $0.34 vs. a loss
of $0.27 per share a year ago.
On the economics calendar Wednesday, MBA Purchase
Applications, the ADP Employment Report and Productivity and
Costs are due out. After markets open, the ISM Non-Manufacturing
Index is expected followed by the EIA Petroleum Status
Good luck and good trading.
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