Futures Lower Following Tuesday Gains
U.S. equity futures gave back some of Tuesday's gains in
pre-market trade Wednesday. A driver of the sell-off could have
been the IMF cutting its China growth forecast to 7.75 percent from
8 percent previously just one day after China's Premier said the
country was targeting 7 percent growth over the next decade.
In other news around the markets:
The number of Germans claiming unemployment benefits jumped much
more than expected in May, as 21 thousand Germans claimed benefits
for the first time vs. only 5 thousand expected. The unemployment
rate remained flat at 6.9 percent. To quell bond market sell-offs
and also as part of its easing program, the Bank of Japan bought
1.02 trillion yen (about $10 billion) worth of bonds overnight with
maturities of 1-5 years and 10 years as well as inflation linked
bonds. Bank of Japan Governor Kuroda spoke overnight saying that
the global economy is still reeling from the financial crisis. He
did not comment on stimulus measures as expected which could be a
factor in the reversal in the yen overnight. S&P 500 futures
fell 6.4 points to 1,648.20. The EUR/USD was higher at 1.2891.
Spanish 10-year government bond yields rose 3 basis points to 4.33
percent. Italian 10-year government bond yields rose 5 basis points
to 4.08 percent. Gold rose 0.36 percent to $1,384.70 per ounce.
Asian shares were mixed overnight as Hong Kong shares showed
outsized weakness. The Japanese Nikkei Index rose 0.1 percent and
the Shanghai Composite Index gained 0.12 percent while the Hang
Seng Index lost 1.61 percent. Also, the Korean Kospi rose 0.42
percent and Australian shares added 0.08 percent.
European shares were also mixed overnight following mixed
economic data. The Spanish Ibex Index rose 1.77 percent and the
Italian FTSE MIB Index fell 0.43 percent. Meanwhile, the German DAX
rose 1.16 percent and the French CAC 40 gained 1.39 percent while
U.K. shares declined 1.22 percent.
Commodities were lower overnight following the IMF cutting
China's growth forecast overnight. WTI Crude futures declined 0.44
percent to $94.59 per barrel and Brent Crude futures fell 0.15
percent to $104.07 per barrel. Copper futures fell 0.8 percent to
$328.85 per pound both on the China news and also following a
report from PIMCO that was very negative on Australia's economy,
specifically the mining sector. Gold was higher and silver futures
fell 0.08 percent to $22.18 per ounce.
Currency markets were on the move overnight reversing some of
Tuesday's moves as the yen strengthened. The EUR/USD was higher at
1.2891 and the dollar fell against the yen to 101.67. Overall, the
Dollar Index fell 0.12 percent on weakness against the yen, the
Swiss franc, the euro, and the pound.
Earnings Reported Yesterday
Key companies that reported earnings Tuesday include:
Canadian Solar (NASDAQ:
) reported a first quarter loss of $0.10 per share vs. a loss of
$0.78 per share expected on revenue of $263.3 million vs. $197.0
million expected. Guidewire Software (NYSE:
) reported first quarter EPS of $0.04 vs. $0.03 expected on revenue
of $68.3 million vs. $63.5 million expected. Tiffany and Co.(NYSE:
) reported first quarter EPS of $0.70 vs. $0.52 expected on revenue
of $895.5 million vs. $855.16 million expected.
Stocks moving in the pre-market included:
Royal Caribbean (NYSE:
) shares declined 1.1 percent pre-market as the company reported a
fire on board a ship at sea. Carnival Corp. (NYSE:
) shares fell 1.06 percent in tandem. Peabody Energy (NYSE:
) shares declined 0.63 percent pre-market following comments from
) overnight that it is stopping coal investments as the market for
coal declines. Guidewire Software (NYSE:
) shares gained 6.91 percent pre-market after its earnings release.
Michael Kors Holdings (NYSE:
) shares rose 2.05 percent pre-market ahead of its earnings release
Notable companies expected to report earnings Wednesday
The Bank of Montreal (NYSE:
) is expected to report second quarter EPS of $1.50 vs. $1.44 a
year ago. Dollar General (NYSE:
) is expected to report first quarter EPS of $0.71 vs. $0.63 a year
ago. DSW Inc. (NYSE:
) is expected to report first quarter EPS of $0.90 vs. $0.98 a year
ago. Michael Kors Holdings (NYSE:
) is expected to report fourth quarter EPS of $0.39 vs. $0.22 a
year ago. The Fresh Market (NASDAQ:
) is expected to report first quarter EPS of $0.44 vs. $0.40 a year
On the economics calendar Wednesday, MBA Purchase Applications
are due out as well as the Redbook in the U.S. Abroad, German CPI,
Brazilian GDP, and the Canadian Interest Rate Decision are all
expected. In addition, the Treasury is set to auction 4- and
52-week bills and Boston Fed President Eric Rosengren is set to
speak. Overnight, Spanish GDP, Eurozone Consumer Confidence, and an
Italian bond auction could move markets.
Good luck and good trading.
to view Benzinga's Market Wrap for Tuesday, May 28.
(c) 2013 Benzinga.com. Benzinga does not provide investment
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