Futures Rally as Risk Appetite Returns
U.S. equity futures rose in early pre-market as better than
expected economic data from the eurozone sparked a risk rally.The
yen weakened, the Australian dollar bounced back, and equity
futures rose in what appears to be a return to risk.
In other news around the markets:
The number of people claiming unemployment in England fell more
than expected in May. The U.K. claimant count change was reported
as -8.6 thousand vs. -5 thousand expected and the prior figure was
revised to a better -11.8 thousand vs. -7.3 thousand reported
before. The unemployment rate was steady at 7.8 percent. Industrial
production in the eurozone rose faster than expected in April.
Industrial production rose 0.4 percent in April vs. an expected
drop of 0.2 percent however March's figure was revised slightly
lower to +0.9 percent from +1.0 percent. On an annualized basis,
industrial production fell 0.6 percent vs. a 1.2 percent expected
drop. The Bank of Japan bought $8.4 billion of bonds last night as
part of its stimulus measures. Yields on Japanese Government Bonds
were higher on the session across the curve. S&P 500 futures
rose 8.2 points to 1,635.30, a session high. The EUR/USD was lower
at 1.3278. Spanish 10-year government bond yields rose 3 basis
points to 4.69 percent. Italian 10-year government bond yields rose
3 basis points to 4.4 percent. Gold rose 0.05 percent to $1,377.70.
Asian shares were mostly lower overnight although most major
indices closed off of their lows. The Japanese Nikkei 225 Index
fell 0.21 percent after declining over 2 percent at the open and
the Topix Index fell 0.42 percent. Also, the Korean Kospi fell 0.56
percent and Australian shares shed 0.69 percent.
European shares were mostly higher on the back of some better
than expected economic data. The Spanish Ibex Index gained 1.22
percent and the Italian FTSE MIB Index rose 0.22 percent.
Meanwhile, the German DAX gained 0.09 percent and the French CAC 40
rose 0.39 percent while U.K. shares added 0.05 percent.
Commodities were slightly higher overnight as global growth
fears ebbed. WTI Crude futures rose 0.06 percent to $95.44 per
barrel and Brent Crude futures rose 0.34 percent to $103.31 per
barrel. Copper futures added 1.0 percent to $322.70 per pound. Gold
was higher and silver futures rose 0.5 percent to $21.76 per
Currency markets were in retracement mode overnight as the
dollar gained back some ground against the yen while risk
currencies such as the Aussie dollar bounced back. The EUR/USD was
lower at 1.3278 and the dollar gained against the yen to 96.57.
Overall, the Dollar Index rose 0.15 percent.
Earnings Reported Yesterday
Key companies that reported earnings Tuesday include:
LDK Solar (NYSE:
) reported a first quarter loss of $1.21 per share vs. an expected
loss of $0.96 per share on revenue of $104.3 million vs. $97.2
million expected. Oxford Industries (NYSE:
) reported first quarter EPS of $0.82 vs. $0.78 expected on revenue
of $234.2 million vs. $236.9 million expected. The company also
reported mixed guidance for the second quarter and reaffirmed its
full year guidance. Ulta Salon (NASDAQ:
) reported first quarter EPS of $0.65 vs. $0.62 expected on revenue
of $582.7 million vs. $576.3 million expected. However, guidance
for the second quarter was slightly below forecasts.
Stocks moving in the pre-market included:
Ulta Salon (NASDAQ:
) rose 9.59 percent pre-market on the earnings beat First Solar
) shares fell 6.29 percent as the company priced a secondary
offering of 8.5 million shares, or just under 10 percent of shares
outstanding. Newcastle Investment Corp. (NYSE:
) shares fell 1.17 percent pre-market after the company sold 30
million shares. Rambus (NASDAQ:
) shares climbed 10.46 percent pre-market after the company entered
a new patent licensing agreement.
Notable companies expected to report earnings Wednesday
Men's Warehouse (NYSE:
) is expected to report first quarter EPS of $0.55 vs. $0.52. PVH
) is expected to report first quarter EPS of $1.35 vs. $1.30 a year
On the economics calendar Wednesday, MBA Purchase Applications
and a 10-year Treasury auction are expected, followed by the
Treasury budget statement. Overnight, the Australian Employment
Change report and the ECB Monthly Report are both expected.
Good luck and good trading.
For a recap of yesterday's market action, read Benzinga's daily
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