U.S. equity futures were flat in pre-market trading for the
third straight day despite stronger than expected industrial
production data from China, a proxy for growth. The National
Bureau of Statistics in China reported that industrial production
grew at an annualized rate of 9.6 percent, better than forecasts
of a 9.4 percent gain.
In other news around the markets:
- Former Treasury Secretary Larry Summers spoke overnight,
stating that Europe's woes were more urgent than the fiscal
cliff and said that he is not sure who will fill Fed Chairman
Ben Bernanke's seat when he retires in 2014. Summers is widely
regarded as the top choice of the President for the post.
- The Royal Bank of Australia cut its growth estimate for the
Australian economy to 2.25-3.25 percent from 2.75-3.25 percent
in its monetary policy statement, following its rate decision
- French industrial output fell 2.7 percent in September for
the prior month, much weaker than forecasts of 1.0 percent
drop. Also, industry investment is only seen rising 1.0 percent
in 2012, lower than previous estimates of a 5.0 percent
- Andreas Dombret, Bundesbank board member in charge of
financial stability, statistics, and risk control, spoke
overnight about central bank bond purchases, calling them no
substitute for winning back investor trust. On the banking
union, Dombret said it would help break the link between the
sovereigns and the banks and its goal would not simply to be
- S&P 500 futures fell 1.1 points to 1,374.20.
- The EUR/USD was lower at 1.2724.
- Spanish 10-year government bond yields rose to 5.853
- Italian 10-year government bond yields fell to 5.038
- Gold rose 0.41 percent to $1,733.10 per ounce.
Asian shares were lower overnight, once again reflecting the
earlier weakness in U.S. stocks. The Shanghai Composite Index
fell 0.12 percent despite the strong economic data and the
Japanese Nikkei Index fell 0.9 percent. Meanwhile, the Hang Seng
Index dropped 0.85 percent in Hong Kong and the Korean Kospi
slipped 0.52 percent while Australian shares fell 0.49 percent
following the cut in growth forecasts from the RBA.
European shares were also lower overnight on fears that Greece
may not get its funding and default on its t-bills due to mature
in the middle of November. The Spanish Ibex Index fell 1.08
percent and the Italian MIB Index slipped 0.63 percent while
Greek shares declined 0.4 percent. Also, the German DAX fell 0.74
percent while the French CAC declined 0.14 percent and U.K.
shares dropped 0.34 percent.
Commodities were mixed overnight as prices were relatively
flat overnight. WTI Crude futures fell 0.06 percent to $85.04 per
barrel and Brent Crude futures rose 0.08 percent to $107.34 per
barrel. Copper futures fell 0.71 percent to $344.50 per pound on
the RBA growth cut despite the strong Chinese data. Gold was
higher and silver futures rose 0.14 percent to $32.29 per
Currency markets were in clear risk-off mode as the dollar and
the yen reigned and the euro slipped. The EUR/USD was lower and
the dollar fell against the yen to 79.24 and U.S. yields have
moved lower over the past three days. Overall, the Dollar Index
rose 0.11 percent to 80.90 on strength against the euro, the
Swedish krona, the pound, and the Swiss franc. The Aussie dollar
was stronger against the U.S. dollar and the euro but weaker
against most other counterparts including the yen, the Canadian
dollar, and the New Zealand dollar (commonly known as the
Stocks moving in the pre-market included:
- Groupon (NASDAQ:
) shares fell 17.09 percent after the company reported weak
earnings and dismal sales data from Europe.
- Disney (NYSE:
) shares fell 2.62 percent pre-market following the company
reporting weaker than expected earnings.
- Goldman Sachs (NYSE:
) shares rose 0.5 percent as coverage was reinstated with a Buy
rating at Bank of America (NYSE:
- Safeway (NYSE:
) shares fell 7.62 percent after the company reached a new
labor agreement with its union workers in Northern
Unfortunately, earnings season is slowing and fewer companies
are reporting for the next few weeks. JC Penney (NYSE:
) is expected to report third quarter EPS of -$0.07 vs. $0.11 a
On the economic calendar Friday, import and export prices and
trade data is due out. Also, consumer confidence data is
expected. Later Friday, Chinese trade data is due out and will
shed further light on the state of global trade.
Good luck and good trading.
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advice. All rights reserved.