US indices slipped in the early hours of Monday as no movement
on the emergency spending bill prompted investors to brace for a
government shutdown. With the midnight deadline fast approaching, a
lack of progress between Democrats and Republicans has most
expecting to see the Federal government shut down on October.
Republicans opposed to Obamacare are fighting to postpone the
healthcare bill, but Democrats and the President himself have vowed
not to delay it. The Senate is set to reconvene 10 hours before the
midnight deadline, where they could make an eleventh hour decision
and avoid a shutdown.
In other news around the markets:
Oil prices have fallen under pressure as the US and Iran move
forward towards a diplomatic resolution to the dispute over Iran's
nuclear program. On Friday, US President Barack Obama and Iranian
President Hassan Rouhani spoke directly via telephone for the first
time since 1979, adding to optimism that the two can rebuild the
long standing conflicted relationship. Silvio Berlusconi has made
good on his threats to take down the government as he pulled his
party's ministers from the already fragile coalition. Prime
Minister Enrico Letta has called for a confidence vote on
Wednesday, at which he is hoping that some members of Berlusconi's
party will support the coalition and make it possible to carry on.
China's HSBC Purchasing Managers Index rose in September, but much
less than the 51.2 that was reported in the preliminary reading.
The final figure came in at a disappointing 50.2, just barely above
the 50 point mark which indicates growth. The news website Quartz
reported that Twitter is planning to make its confidentially filed
IPO public this week. The company is reportedly attempting to hold
its IPO before Thanksgiving, on November 28.
Asian markets were mostly down on Monday. Australia's ASX 200
was down 1.66 percent, the Hang Seng index was down 1.39 percent
and Indonesia's JSX composite lost 1.55 percent. The Japanese
NIKKEI had the largest losses and was down 2.06 percent.
European markets were down across the board with Italian
politics pushing the MIB down 1.96 percent. The UK's FTSE lost 0.86
percent and the eurozone STOXX 600 was down 0.82 percent. The
German DAX and the French CAC 40 were down 1.10 percent and 1.15
Energy futures were hit hard by thawing relations between Iran
and the US. Brent futures were down 0.84 percent and WTI futures
lost 1.11 percent. Metals were up across the board; gold gained
0.20 percent, silver gained 0.04 percent, copper was up 0.68
percent and aluminum gained 0.99 percent.
The euro softened slightly against the dollar, but uncertainty
over the US government shutdown weighed on the dollar. The pound
was up against both the dollar and the euro, up 0.05 percent
against the dollar and 0.20 percent against the euro. The yen
gained 0.37 percent against the dollar.
Earnings Already Reported
Notable companies that reported earnings on Friday included:
) reported a loss of $0.47 per share on revenue of $1.60 billion,
compared to last year's loss of $0.27 per share on revenue of $2.87
billion. Vail Resorts, Inc. (NYSE:
) reported a loss of $1.67 on revenue of $112.31 million, compared
to last year's loss of $1.50 on revenue of $113.54 million.
Stocks moving in the pre-market included:
Oracle Corp (NYSE:
) gained 0.30 percent in pre-market trade after losing 0.79 percent
over the past five days. Chipotle Mexican Grill (NYSE:
) was up 0.24 percent in pre-market trade after news that CBRE
Group would acquire Fameco, which Chipotle is a tenant for. Bank of
America Corporation (NYSE:
) lost 1.44 percent in pre-market trade, adding to its 3.74 percent
loss over the past week. Carnival Corp (NYSE:
) continued its losing streak and fell 1.25 percent in pre-market
trade. Wells Fargo & Co. (NYSE:
) lost 0.94 percent in pre-market trade after falling 2.94 percent
over the past five days.
Earnings reports expected on Monday include:
Park Electrochemical (NYSE:
) is expected to report EPS of $0.29 on revenue of $46.48 million,
compared to last year's EPS of $0.28 on revenue of $46.43 million.
OMNOVA Solutions Inc. (NYSE:
) is expected to report EPS of $0.22 on revenue of $277.00 million,
compared to last year's EPS of $0.16 on revenue of $288.20 million.
On Monday, most will be focusing on the looming US government
shutdown. Other notable economic releases include Canadian GDP,
British mortgage lending and mortgage approvals, Norwegian core
retail sales and Italian and French PPI.
For a recap of Friday's market action, click
Tune into Benzinga's pre-market info show with Dennis Dick and
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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