U.S. equity futures were flat in early Monday trading as
positive sentiment from better economic data in the U.S. was
offset by bad news out of Spain. Over the weekend, German paper
Die Welt reported that the European Central Bank may have broken
its own rules in collateralized financing operations with Spanish
banks, which could result in up to 17 billion euros ($21.7
billion) collateral calls on the Spanish banking system. For
perspective, this would be some 17 percent of the entire bank
In other news around the markets:
- The number of unemployed people rose 2.7 percent from
September to October, the government reported. The drop marked
the third consecutive monthly fall since the end of tourist
- The British service sector expanded slower than expected in
October, according to new data. The British Services PMI
slipped to 50.6 from 52.2 in September, weaker than forecasts
of a slight drop to 52.0.
- The recent agreements surrounding the Greek bailout may be
made void by one of a few parties involved in the talks,
resulting in Greece not getting its bailout funds. This could
result in Greece outright defaulting, which some economists say
it should have done years ago.
The Washington Redskins lost Sunday,
potentially predicting a Romney victory in Tuesday's
- S&P 500 futures slipped 0.8 points to 1,404.70.
- The EUR/USD was lower at 1.2792 on the Spanish
- Spanish 10-year government bond yields rose to 5.738
- Italian 10-year government bond yields rose to 4.987
- Gold futures for December delivery rose 0.19 percent to
$1,678.40 per ounce following the large drop on Friday.
Asian shares were mostly lower overnight, as service PMI's for
the region were released, showing strength in some nations and
weakness in others. However, Spanish debt fears kept shares
lower. The Japanese Nikkei Index slipped 0.48 percent and the
Shanghai Composite Index fell 0.14 percent while the Hang Seng
Index fell 0.47 percent in Hong Kong trading. Meanwhile, the
Korean Kospi fell 0.55 percent and Australian shares rose 0.32
European shares shares were lower following the bad news about
Spanish banks and the bad news out of Greece. The Spanish Ibex
fell 1.36 percent and the Italian MIB Index fell 1.24 percent
while Greek shares slipped 0.71 percent, showing broad weakness
in the periphery. Meanwhile, the German DAX fell 0.67 percent and
the French CAC 40 slipped 0.99 percent. Also, the U.K. FTSE fell
0.63 percent on the weak services PMI.
Commodities were mostly weaker in early Monday trade save for
gold futures. WTI Crude futures slipped 0.25 percent to $84.65
per barrel and Brent Crude futures fell 0.26 percent to $105.40
per barrel. Copper futures declined 0.62 percent to $346.00 per
pound and Gold was stronger while silver futures fell 0.1 percent
to $30.83 per ounce.
Currency markets showed broad euro weakness overnight
following the news from Spain. The EUR/USD was lower in early
trade at 1.2792 and the dollar fell against the yen to 80.24.
Overall, the Dollar Index rose 0.14 percent to 80.71 on strength
against the euro, the pound, and the Swiss franc. The euro was
broadly weak as the single currency fell against most major
pairs, including the Aussie dollar which was stronger ahead of
the Royal Bank of Australia's rate decision. In addition,
Turkey's bonds were raised to investment grade sending the lira
Stocks moving in the pre-market included:
- Ford (NYSE:
) shares rose 1.97 percent pre-market as the company reported
strong sales in China.
- Du Pont (NYSE:
) shares fell 1.0 percent pre-market as the company cut fiscal
year 2012 guidance and laid off workers.
- Citigroup (NYSE:
) shares fell 0.93 percent in pre-market trading as the bank is
set to waive fees for customers affected by Sandy.
- Hewlett-Packard (NYSE:
) shares fell 0.44 percent on despite a positive article on
Seeking Alpha highlighting a potential turnaround at the
There are several notable companies expected to report
earnings Monday, including:
- CF Industries (NYSE:
) is expected to report third quarter EPS of $5.70 vs. $5.16 a
- EOG Resources (NYSE:
) is expected to report third quarter EPS of $1.12 vs. $0.83 a
- Express Scripts Holding Co. (NASDAQ:
) is expected to report third quarter EPS of $0.99 vs. $0.79 a
- Humana Inc. (NYSE:
) is expected to report third quarter EPS of $2.05 vs. $2.67 a
- Silver Wheaton (NYSE:
) is expected to report third quarter EPS of $0.42 vs. $0.38 a
- Tesla (NASDAQ:
) is expected to report a third quarter loss of $0.90 per share
vs. a loss of $0.55 per share a year ago.
- Transocean LTD (NYSE:
) is expected to report third quarter EPS of $0.76 vs. $0.70 a
On the economic calendar Monday, the ISM Non-Manufacturing
Index is set to be released and will give investors a better view
into the largest portion of the U.S. economy. Also, the Treasury
is set to auction 4-week, 3-, and 6-month bills. Overnight, the
Royal Bank of Australia is set issue its rate decision and
European service PMI's for several nations including Spain,
Italy, and Germany are expected.
Good luck and good trading.
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