Futures Slightly Lower on Global Economic Data
U.S. equity futures traded slightly lower in early Wednesday
trade after stocks broke the 20-Tuesday winning streak yesterday.
Markets eye key economic reports from around the world heading into
trading Wednesday as global service PMIs are due out Wednesday.
In other news around the markets:
Wrapping up the already released service PMI's, the HSBC China
Services PMI and the Spanish and British Service PMIs beat
expectations while France's was in line and the broad Eurozone,
Italian, and German Service PMIs missed expectations. Apple
) shares declined in after-hours trading as the International Trade
Commission ruled that Apple had infringed on one of Samsung's
patents in some iPhone 3's and 4's and has ordered an import ban on
these products. Apple already plans to appeal the decision and the
Obama administration also has 60 days to veto the ruling.Other
eurozone economic data was released early Wednesday as a new report
showed that first quarter GDP contracted 0.2 percent, in line with
expectations, however the annualized rate fell 1.1 percent vs. an
expected drop of 1.0 percent. eurozone retail sales were also a
poor print this morning as April retail sales declined 0.5 percent
from March on expectations of a decline of 0.1 percent. Retail
sales had fallen 0.2 percent in March, which was downwardly revised
from the previous reading of -0.1 percent Japanese Prime Minister
Shinzo Abe spoke overnight and he outlined some key reforms that
the administration looks set to roll out to ramp up the economy.
Proposals included removing barriers to corporate activity, opening
up of infrastructure investments to the private sector, and aims to
double FDI all in efforts to boost GNI by 3 percent per annum.
Australia's first quarter GDP report was released as well last
night and it showed that the economy contract 0.6 percent in the
first quarter vs. a 0.7 percent expected increase. On an annualized
rate, the economy grew 2.5 percent vs. 2.7 percent expected,
weighing further on the already crippling Australian dollar.
S&P 500 futures declined 3.5 points to 1,627.70. The EUR/USD
was lower at 1.3068 in volatile trading. Spanish 10-year government
bond yields rose 1 basis point to 4.43 percent in narrow trading.
Italian 10-year government bond yields rose 1 basis point to 4.11
percent. Gold rose 0.17 percent to $1,399.60 per ounce.
Asian shares retreated overnight as the Nikkei Index plunged
once again as the yen strengthened on fears that the lack of a
concrete plan for growth in the administration (only a broad
outline of a plan was presented) would mean the expected recovery
would not come. The Japanese Nikkei Index fell 3.83 percent and the
broader Topix Index declined 3.15 percent. The Shanghai Composite
Index fell 0.03 percent and the Hang Seng Index fell 0.97 percent
in Hong Kong. Also, the Korean Kospi declined 1.52 percent and
Australian shares shed 1.34 percent.
European shares saw declines across the core nations as
peripheral shares held ground. The Spanish Ibex Index gained 0.44
percent on the strong Services PMI data (47.3 vs. 45.0 expected)
and the Italian FTSE MIB Index gained 0.44 percent. Meanwhile, the
German DAX fell 0.35 percent and the French CAC 40 fell 0.57
percent as U.K. shares declined 0.73 percent.
Commodities were slightly stronger overnight as the dollar
halted its winning streak. WTI Crude futures rose 0.48 percent to
$93.76 per barrel and Brent Crude futures gained 0.36 percent to
$103.61 per barrel. Copper futures rose 0.24 percent despite the
weak Australian data. Gold was higher and silver futures rose 0.29
percent to $22.48 per ounce.
Currency markets were on the move overnight as the yen
strengthened across the board with the dollar gaining against most
other majors and the Australian dollar continuing its sell off. The
EUR/USD was lower at 1.3068 after rising as high as 1.31 earlier
and the dollar fell against the yen to 99.76. Overall, the Dollar
Index was flat on gains against the euro and the Swiss franc
despite weakness against the British pound and the yen.
Earnings Reported Yesterday
Key companies that reported earnings Tuesday include:
Dollar General (NYSE:
) reported first quarter EPS of $0.71, in line with expectations.
However, the company lowered its full year guidance which was also
below analyst forecasts. Shuffle Master (NASDAQ:
) reported second quarter EPS of $0.21 vs. $0.20 expected on record
revenue of $77.4 million vs. $71.57 million expected. Bob Evans
) reported fourth quarter EPS of $0.71 vs. $0.64 expected on
revenue of $353.9 million vs. $331.41 million expected. Analogic
) reported third quarter EPS of $0.76 vs. $0.66 expected on revenue
of $125.8 million vs. $135.98 million.
Stocks moving in the pre-market included:
) shares declined 4.74 percent in after-hours trading after
reporting earnings. Shuffle Master (NASDAQ:
) shares rose 5.07 percent after reporting a record quarter and
making some positive comments on the business outlook. Apple
) shares declined 0.49 percent in after-hours trading after falling
more than 1 percent on the ITC ruling news. Tesla Motors (NASDAQ:
) shares declined 0.89 percent after founder Elon Musk made some
mixed comments at the company's investor presentation.
Notable companies expected to report earnings Wednesday
Brown Forman Corp. (NYSE: BF-B) is expected to report fiscal fourth
quarter EPS of $0.46 vs. $0.49 a year ago. Francesca's Holdings
) is expected to report first quarter EPS of $0.26 vs. $0.20 a year
ago. Hovnanian Enterprises (NYSE:
) is expected to report a second quarter loss of $0.05 per share
vs. a profit of $0.02 per share a year ago. Verifone Systems (NYSE:
) is expected to report second quarter EPS of $0.47 vs. $0.64 a
On the economics calendar Wednesday, MBA Purchase Applications
are due out followed by the ADP Employment Report. Productivity and
costs data are set to be released later followed by factory orders,
the ISM Non-Manufacturing Index, and the Beige Book, the latter two
being the big reports for the day. Overnight, Japanese fund flow
data, Spanish and French bond auctions, German Factory Orders, and
interest rate decisions from both the Bank of England and the
European Central Bank.
Good luck and good trading.
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