Futures rise on global gains
US markets set to open higher and recoup some losses, even as concern about Fed tapering remains.
U.S. equity futures rose slightly in early premarket trade following gains around the world. The Japanese Nikkei Index rose overnight despite the yen remaining strong in volatile trading.
U.S. equity futures rallied in late afternoon Thursday and closed near session highs after The Wall Street Journal's Federal Reserve watcher John Hilsenrath published a piece saying that the Fed is unlikely to raise rates anytime soon, even if the bank begins to taper. He also warned that tapering still seems like it will begin in the fourth quarter.
European total employment fell 0.5% in May, worse than the expected 0.2% drop. Employment had declined 0.3% in April.
Eurozone inflation continued to drag along at low levels in May as the consumer price inflation rose 0.1% in the month, in line with expectations. The CPI rose 1.2% from a year ago, also in line with expectations, although well below the unofficial target of 2% inflation.
S&P 500 futures traded up 1 point to 1,637.75.
The EUR/USD was lower at 1.3324.
Spanish 10-year government bond yields declined 8 basis points to 4.54%.
Italian 10-year government bond yields also declined 8 basis points to 4.27%.
Gold rose 0.3% to $1,382.00.
Asian shares were mostly higher overnight, led by gains in Japan on the back of the rally in U.S. stocks. The Japanese Nikkei 225 Index rose 1.94% and the Topix Index gained 1.18%. In Hong Kong, the Hang Seng Index rose 0.39% while the Shanghai Composite Index gained 0.65%. Also, the Korean Kospi rose 0.35% and Australian shares rose 2.04%.
European shares were mostly higher in early trade following stronger global markets. The Spanish Ibex Index rose 0.55% while the Italian FTSE MIB Index slipped 0.07%. Meanwhile, the German DAX rose 0.76% and the French CAC 40 Index 0.47% while U.K. shares gained 0.58%.
Commodities were mostly higher overnight as the dollar weakened except for against the yen. WTI crude futures rose 0.26% to $96.94 per barrel and Brent crude futures gained 0.73% to $104.25 per barrel. Copper futures ticked higher overnight by 0.53% to $320.20 per pound. Gold was higher and silver futures rose 0.5% to $21.69 per ounce.
Currency markets were on the move overnight as yen and dollar strength continued to be the common themes. The EUR/USD was lower at 1.3324 and the dollar fell against the yen by 0.44% to 94.95. Overall, the Dollar Index rose 0.17% on strength against the euro, the pound, and the Swiss franc.
Earnings reported Thursday
Key companies that reported earnings Thursday include:
Casey's General Stores (CASY) reported fourth quarter EPS of $0.60 vs. $0.62 expected on revenue of $1.81 billion vs. $1.83 billion expected.
Restoration Hardware (RH) reported first quarter EPS of $0.06 vs. $0.04 on revenue of $301.3 million vs. $299.13 million. The company also issued strong second quarter guidance above analyst estimates and raised full year guidance above the street's forecasts.
Smith & Wesson (SWHC) reported preliminary fourth quarter EPS of $0.44 vs. $0.40 expected on revenue of $179 million vs. $170.6 million expected. The company also announced a debt swap to exchange existing debt for new debt with lower coupon rates which would amount to a $25 million cash inflow for the company as well as a new $100 million share buyback.
Rentrak (RENT) reported a fourth quarter loss of $0.17 per share vs. an expected lsos of $0.03 per share on revenue of $28.52 million vs. $27.58 million expected.
Stocks moving in the premarket included:
Smith & Wesson (SWHC) shares popped 4.09% after-hours following the earnings release and the announcement of the buyback of 17% of the company's market cap.
Casey's General Stores (CASY) shares declined 2.07% premarket following the earnings miss.
Echo Therapeutics (ECTE) shares declined 3.46% premarket as the company priced a 4.025 million share offering at $2.70 per share.
Notable companies expected to report earnings Friday include:
NGL Energy Partners (NGL) is expected to report fourth quarter EPS of $1.03 vs. $0.73 a year ago.
Smithfield Foods (SFD) is expected to report fourth quarter EPS of $0.43 vs. $0.43 a year ago.
On the economics calendar Friday, the U.S. current account and producer prices data are due out followed by TIC flows, capacity utilization, industrial production, and the Reuters/University of Michigan consumer sentiment index.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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