Futures rise despite fiscal cliff fears.
U.S. equity futures rose on early Wednesday trading despite
renewed fears over the fiscal cliff. Investors may have become
hopeful of a deal in Washington when yesterday, the White House
announced that President Obama is set to speak today on the
subject. The press conference is set for 1:30 pm eastern
In other news around the markets:
- The Economist crunched the numbers and showed that, by
giving Greece another two years to reach its bailout targets,
the country will need approximately another 32 billion euros.
The magazine says that this itself could lead to Greece to need
a third bailout.
- Spanish banks had to borrow 367 billion euros from the
European Central Bank in October. The figure is less than the
amount borrowed in September, some 400 billion euros, however
the figure is still very high.
- The Bank of England's Inflation Report cut its growth
forecast for the country from 2.0 percent to 1.9 percent in two
years. Also, the Bank increased its inflation forecast for the
same period to 1.8 percent from 1.7 percent.
- S&P 500 futures rose 6.7 points to 1,377.60.
- The EUR/USD was higher at 1.2747.
- Spanish 10-year government bond yields fell to 5.838
- Italian 10-year government bond yields fell to 4.954
- Gold futures fell 0.04 percent to $ 1,724.10 per
Asian shares were modestly higher overnight on hopes that the
U.S. will reach a deal on the fiscal cliff. The Japanese Nikkei
Index rose 0.04 percent and the Shanghai Composite Index rose
0.37 percent while the Hang Seng Index rose 1.2 percent in Hong
Kong trading. Also, the Korean Kospi rose 0.23 percent and
Australian shares rose 0.2 percent.
European shares were mostly lower in early trading on Greek
and Spanish fears. Spain's Ibex Index did rise 0.27 percent but
was well off the highs following the bank data and Italy's MIB
Index fell 0.16 percent. Meanwhile, the German DAX fell 0.18
percent and the French CAC dropped 0.27 percent and U.K. shares
fell 0.55 percent following the BoE's change in forecasts.
Commodities were mostly higher in overnight trade led by the
energy complex as gold lagged. WTI Crude futures rose 0.43
percent to $85.75 per barrel and Brent Crude futures rose 0.5
percent to $108.80 per barrel. Copper futures rose 0.36 percent
to $348.35 on hopes of a fiscal cliff deal, which would avoid a
sharp contraction in the economy and maintain end demand. Gold
was lower and silver futures rose 0.06 percent to $32.51 per
Currency markets were showing a dollar bearish bias in
overnight trade as the greenback fell against a host of other
currencies save for the yen. The EUR/USD was higher at 1.2747 and
the dollar rose against the yen to 79.93. Overall, the Dollar
Index fell to 80.99, down 0.12 percent overnight on weakness
against the euro, the Swiss franc, and the Swedish krone. In
addition, the Aussie dollar rose against the greenback and the
EUR/AUD cross bounced back above 1.22.
Stocks moving in the pre-market included:
- Home Depot (NYSE:
) shares rose 0.9 percent pre-market following a 3.63 percent
gain Tuesday on stronger than expected adjusted earnings.
- Cisco (NASDAQ:
) shares rose 7.89 percent pre-market as the company reported
earnings that beat estimates and CEO and Chairman John Chambers
looks set to stay with the company longer than expected.
- JP Morgan Chase (NYSE:
) shares rose 0.55 percent as relaxed fears on the fiscal cliff
and optimism on the buyback plan boosted shares.
- Microsoft (NASDAQ:
) shares rose 1.33 percent after falling more than 3 percent
Tuesday following the departure of its head of software.
Notable companies expected to report earnings Wednesday
- Abercrombie & Fitch (NYSE:
) is expected to report third quarter EPS of $0.59 vs. $0.57 a
- Interoil Corporation (NYSE:
) is expected to report third quarter EPS of $0.12 vs. a loss
of $0.41 a share a year ago.
- Hot Topic (NASDAQ:
) is expected to report third quarter EPS of $0.09 vs. $0.07 a
- Limited Brands (NYSE:
) is expected to report third quarter EPS of $0.24 vs. $0.25 a
- Netapp (NASDAQ:
) is expected to report second quarter EPS of $0.48 vs. $0.63 a
- Williams Sonoma (NYSE:
) is expected to report third quarter EPS of $0.45 vs. $0.41 a
On the economics calendar Wednesday, MBA Mortgage
Applications, the Producer Price Index, and Retail Sales are due
out. Later business, inventories are expected to be released and
the Treasury is set to issue 4- and 52-week bills. At 2:00 pm,
the FOMC minutes from the October meeting are due out.
Good luck and good trading.
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