Futures rise after Fed-induced plunge
After 2 days of heavy selling, US markets are poised to gain at the open on this quadruple-witching day.
U.S. equity futures gained in early premarket trade Friday after Thursday's sell-off as Chinese lending rates eased. The overnight SHIBOR rate fell to 7.9% from 12.8%, and the seven-day repo rate fell 8.1% from 11.6% Thursday.
In other news, the CME (CME) hiked margins on gold and platinum after the close Thursday. Gold margins were raised 25% while platinum margins increased 12.5%.
The current account for the eurozone for April declined less than expected to 19.5 billion euros from 25.9 billion euros vs. the expected 14.2 billion euros.
S&P 500 futures rose 8.8 points to 1,592.70.
The EUR/USD was lower at 1.3214.
Spanish 10-year government bond yields fell 1 basis point to 4.86%.
Italian 10-year government bond yields fell 2 basis points to 4.56%.
Gold rose 0.58% to $1,293.70 per ounce.
Asian shares were mostly lower save for Japanese stocks, which gained on stimulus hopes. The Japanese Nikkei 225 Index rose 1.66% and the Topix Index gained 0.7%. In Hong Kong, the Hang Seng Index fell 0.59% and the Shanghai Composite Index shed 0.5% in China. Also, the Korean Kospi fell 1.49% and Australian shares declined 0.41%.
European shares were mostly higher following positive comments from EU leaders at the EU summit, as well as the better than expected current account data. The Spanish Ibex Index rose 0.14% and the Italian FTSE MIB Index gained 0.56%. Meanwhile, the German DAX rose 0.32% and the French CAC 40 gained 0.8% while U.K. shares rose 0.53%.
Commodities were bouncing off the lows overnight following the Fed's decision and global growth fears sparked by weak Chinese manufacturing data. WTI crude futures were flat at $95.40 per barrel and Brent crude futures rose 0.84% to $103.01 per barrel. Copper futures rose 0.28% to $308.00 per pound, bouncing off the lows. Gold was higher despite margin hikes and silver futures fell 0.44% to $19.74 per ounce.
Currency markets were much more quiet than Thursday in early trade but the dollar continued to show modest strength. The EUR/USD was lower at 1.3214 and the dollar gained against the yen by 0.56% to 97.82. Overall, the Dollar Index was flat on strength against the euro, the pound, and the yen despite weakness against the Canadian dollar.
Earnings reported Thursday
Key companies that reported earnings Thursday include:
Kroger (KR) reported first quarter earnings per share of $0.92 vs. $0.88 expected on revenue of $30.04 billion vs. $30.2 billion expected. The company also raised guidance for the full year.
Oracle (ORCL) reported fourth quarter earnings per share of $0.87, in line with forecasts, on revenue of $10.95 billion vs. $11.12 billion expected. However, guidance for the first quarter was slightly weak.
Pier 1 Imports (PIR) reported first quarter earnings per share of $0.19, in line, on revenue of $394.95 million vs. $395.02 million expected. The company also raised full year guidance which was still below Wall Street forecasts.
Rite Aid (RAD) reported first quarter earnings per share of $0.09, in line, on revenue of $6.29 billion vs. $6.27 billion expected. However, full year guidance was weak.
Stocks moving in the premarket included:
Oracle (ORCL) shares fell 8.31% as the company reported lighter than expected revenue and guided below forecasts.
Five Below (FIVE) shares rallied 4.25% premarket after the company postponed its proposed secondary offering.
Notable companies expected to report earnings Friday include:
CarMax (KMX) is expected to report second quarter earnings per share of $0.58 vs. $0.52 a year ago.
Darden Restaurants (DRI) is expected to report fourth quarter earnings per share of $1.04 vs. $1.15 a year ago.
Discover Financial (DFS) is expected to report second quarter earnings per share of $1.14 vs. $1.21 a year ago.
On the economics calendar Friday, the Canadian CPI and retail sales reports are expected ahead of the ECRI weekly index. Also, note that it is a quadruple witching day. Monday morning, look out for the German IFO business climate index.
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