Futures Rise as Investors Look Past Cyprus
U.S. equity futures rose in early pre-market trade despite the
turmoil in Cyprus as lawmakers failed to pass the bailout agreement
in parliament. Blackrock (NYSE:
BLK
) CEO Larry Fink said that Cyprus was a non-event and said that he
sees 20 percent upside for stocks once the Cyprus non-event blows
over.
Top News
In other news around the markets:
U.K. employment fell less than expected in February, with the total
claimant count falling 1.5 thousand jobs on expectations of a five
thousand jobs drop. Average weekly earnings rose 1.2 percent and
the unemployment rate was in line at 7.8 percent. German producer
prices fell 0.1 percent in February on expectations of a 0.2
percent rise, putting pressure on the ECB to act to counter
deflationary pressures. Analysts at Merrill Lynch cut growth
forecasts for China overnight, cutting the 2013 growth forecast to
8 percent from 8.1 percent. The analyst cut was based on expected
further weakness in the first half of the year as the analysts cut
Q1 growth forecasts from 8.1 percent to 7.9 percent and Q2
forecasts to 8.1 percent from 8.3 percent. S&P 500 futures rose
5 points to 1,546.50. The EUR/USD was higher at 1.2916 after making
a new 2013 low Tuesday. Spanish 10-year government bond yields fell
to 5.01 percent from 5.04 percent. Italian 10-year government bond
yields fell to 4.68 percent from 4.74 percent. Gold fell 0.12
percent to $1,609.30 per ounce.
Asian Markets
Asian shares were mixed overnight in thin trade as Japanese
markets were closed for a domestic holiday. The Shanghai Composite
Index rose 2.66 percent while the CSI 30 Index, the index of the 30
largest Chinese companies, rose 3.37 percent, and the Hang Seng
Index gained 0.97 percent. Also, the Korean Kospi fell 0.97 percent
and Australian shares declined 0.4 percent.
European Markets
European shares were higher for the first day this week on
relaxed fears over Cyprus as it appears that Russia will in the end
extend the nation a larger loan to prevent the bank levy tax from
being implemented. The Spanish Ibex Index rose 0.6 percent and the
Italian FTSE MIB Index rose 0.5 percent. Meanwhile, the German DAX
rose 0.6 percent and the French CAC gained 0.74 percent while U.K.
shares added 0.36 percent.
Commodities
Commodities were mixed overnight as energy futures reversed
Tuesday's losses. WTI Crude futures rose 0.38 percent to $92.50 per
barrel and Brent Crude futures gained 0.38 percent to $107.82 per
barrel. Copper futures gained 0.9 percent on Chinese strength. Gold
was lower and silver futures rose 0.21 percent to $28.91 per
ounce.
Currencies
Currency markets were in clear risk-on mode as the euro and the
pound gained and the yen weakened. The EUR/USD was higher at 1.2916
and the dollar rose against the yen to 95.31. Overall, the Dollar
Index fell 0.2 percent on weakness against the euro, the pound, and
the Canadian dollar.
Pre-Market Movers
Stocks moving in the pre-market included:
Williams-Sonoma Inc. (NYSE:
WSM
) shares gained 5.93 percent pre-market as the company reported
earnings and boosted its dividend 41 percent despite reporting
weaker than expected same store sales. Francesca's Holdings
(NASDAQ:
FRAN
) shares rose 4.34 percent after the company reported better than
expected earnings. Adobe (NASDAQ:
ADBE
) shares rose 6.01 percent after the company reported better than
expected earnings and reiterated guidance. Apple (NASDAQ:
AAPL
) shares rose 0.49 percent pre-market as the company is rumored to
have poached Adobe's chief technology officer and also on hopes of
an announcement of an increased dividend due within the next few
days.
Earnings
Notable companies expected to report earnings Wednesday
include:
FedEx Corp. (NYSE:
FDX
) is expected to report third quarter EPS of $1.39 vs. $1.55 a year
ago. General Mills (NYSE:
GIS
) is expected to report third quarter EPS of $0.57 vs. $0.55 a year
ago. Jabil Circuit (NYSE:
JBL
) is expected to report second quarter EPS of $0.54 vs. $0.58 a
year ago. Lennar (NYSE:
LEN
) is expected to report first quarter EPS of $0.16 vs. $0.08 a year
ago. Oracle (NASDAQ:
ORCL
) is expected to report third quarter EPS of $0.66 vs. $0.62 a year
ago. TearLab (NASDAQ:
TEAR
) is expected to report a fourth quarter loss of $0.10 per share
vs. a loss of $0.17 per share a year ago.
Economics
On the economics calendar Wednesday, MBA Mortgage Applications
and Consumer Confidence are due out, but all eyes will be on the
FOMC rate decision and Chairman Ben Bernanke's press conference
following the press release. Overnight, New Zealand is expected to
report its fourth quarter GDP data and the China HSBC Manufacturing
PMI is expected to be released ahead of the Eurozone Manufacturing
PMI.
Good luck and good trading.
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