U.S. equity futures rose in early Wednesday trade as investors
understood a second term for President Obama means continued
easing from the Federal Reserve. President Obama won most of the
key swing states including Ohio, all but clinching the election.
However, it could be a week or two until the final results are
In other news around the markets:
- Spanish industrial production dropped 7.0 percent
year-over-year in September, the 13th consecutive month of
decline and well below the rate of contraction seen in August
of 2.5 percent.
- Nouriel Roubini, noted economist with a generally
pessimistic view of the global economy, spoke in Milan stating
that the euro needs a gradual 20 percent decline to restore
competitiveness. He also mentioned that the ECB needs to launch
full QE and that the current state of U.S. finances will not be
repaired by the broken political system.
- The German economic council expects German GDP growth of
0.8 percent in 2012 and the same rate of growth in 2013. They
also see a trough in the economy in the fourth quarter of
- S&P 500 futures rose 4.5 points to 1,429.70 after
falling more than seven points overnight.
- The EUR/USD was higher at 1.2851.
- Spanish 10-year government bond yields fell to 5.632
- Italian 10-year government bond yields fell to 4.878
- Gold rose 0.97 percent to $1,731.60 per ounce.
Asian shares were mixed overnight with weakness in Japan and
China off-set by strength in other markets. The Japanese Nikkei
Index fell 0.03 percent overnight and the Shanghai Composite
Index dropped 0.01 percent. Meanwhile, the Hang Seng Index rose
0.71 percent in Hong Kong trading while the Korean Kospi rose
0.49 percent and Australian shares rose 0.71 percent.
European shares were all higher following the reelection of
President Obama and ahead of the Greek austerity vote, the
results of which are due out after the close today. The Spanish
Ibex Index rose 0.8 percent and Italy's MIB Index rose 0.5
percent overnight. Also, the German DAX rose 0.63 percent while
the French CAC rose 0.93 percent and U.K. shares rose 0.54
Commodities were mixed overnight as weakness in energy futures
was off-set by strength in metals. WTI Crude futures dropped 0.29
percent to $88.45 per barrel and Brent Crude futures fell 0.41
percent to $110.62 per barrel. Copper futures rose 0.34 percent
overnight to $351.80 per pound, the second consecutive day of
gains following the strong comments from the Royal Bank of
Australia two days ago. Gold was higher and silver futures rose
0.78 percent to $32.29 per ounce.
Currency markets sold the dollar overnight as the greenback
saw broad-based weakness. Traders believe that a second term for
the President means that the Fed has more leeway to continue to
QE3, which many see as dollar bearish. The EUR/USD was lower and
the dollar was flat against the yen overnight. Overall, the
Dollar Index fell 0.24 percent on weakness against the euro, the
pound, the Canadian dollar, and the Swiss franc.The Aussie dollar
was also strong overnight, rising against the greenback, the
euro, and the yen, and showing a clear risk-on environment in
Stocks moving in the pre-market included:
- Zillow (NASDAQ:
) shares rose 1.56 percent in the pre-market following a more
than 18 percent drop Tuesday as the company reported lackluster
earnings and cut guidance.
- AOL (NYSE:
) shares fell 0.11 percent pre-market after rising more than 20
percent Tuesday on strong earnings.
- Las Vegas Sands (NYSE:
) shares fell 0.13 percent pre-market; the company was the
largest corporate contributor to the republican party during
- Microsoft (NASDAQ:
) shares fell 0.13 percent despite rumors indicating that the
company could be set to compete with Sony (NYSE:
) and Nintendo in the mobile gaming arena by releasing a
portable XBOX gaming device.
There are several notable companies expected to report
earnings Wednesday, including:
- CBS Corp. (NYSE:
) is expected to report third quarter EPS of $0.61 vs. $0.50 a
- HollyFrontier Corp. (NYSE:
) is expected to report third quarter EPS of $2.39 vs. $2.48 a
- Macy's (NYSE:
) is expected to report third quarter EPS of $0.29 vs. $0.32 a
- Monster Beverage (NASDAQ:
) is expected to report third quarter EPS of $0.55 vs. $0.44 a
- Qualcomm (NASDAQ:
) is expected to report fourth quarter EPS of $0.82 vs. $0.80 a
- Tenet Healthcare (NYSE:
) is expected to report third quarter EPS of $0.34 vs. $0.08 a
On the economic calendar Wednesday, MBA purchase applications
and the EIA petroleum status report mark the calendar. Also, the
Treasury is set to auction 10-year bonds. Overnight and early
Thursday, the Bank of England and European Central Bank are set
to release their respective interest rate decisions.
Good luck and good trading.
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