Futures gain ahead of data

Factory orders and car sales are expected to further fuel economic optimism.

By Benzinga Jul 2, 2013 8:36AM

zurbar age fotostockBy Matthew Kanterman


U.S. equity futures rose in early premarket trade ahead of key speeches from Federal Reserve voting members. New York Fed President William Dudley, who is a permanent voting member and is in charge of the open market operations for the Fed, is set to speak this morning followed by a speech from Governor Jerome Powell.


In other news, the Reserve Bank of Australia voted to keep interest rates unchanged at 2.75%. The RBA said "the inflation outlook, as currently assessed, may provide some scope for further easing, should that be required to support demand," that the Aussie dollar is still overvalued, and that they see growth picking up in the next year globally.


Reuters reported, citing an EU official, that Greece has only three days to reassure lenders that it can deliver on promised bailout reforms as the nation faces a large financial hole that could put the country at risk of missing out on the next bailout tranche and risk a new financial crisis. European finance ministers are set to meet on July 8 to approve the disbursement.


The U.K. construction PMI rose slightly less than expected in June to 51.0 vs. the forecast of 51.1, but rose from May's 50.8. On Monday, the more broad manufacturing PMI gained to a strong 52.5 from an upwardly revised May figure of 51.5 on expectations of a reading of 51.5.

  • S&P 500 futures gained 5.4 points to 1,612.10.

  • The EUR/USD was lower at 1.3027.

  • Spanish 10-year government bond yields were flat at 4.6%.

  • Italian 10-year government bond yields were flat at 4.41%.

  • Gold rose 0.49% to $1,261.80 per ounce.

Asian markets

Asian shares were mixed overnight but the major markets generally closed higher. The Japanese Nikkei 225 Index gained 1.78% and the Topix Index rose 1.84% on new data that showed that the money supply grew over 30% from a year ago but has not yet reached a doubling pace as it is targeted to do so. In Hong Kong, the Hang Seng Index re-opened and closed down 0.7% while Chinese shares gained 0.57%, as measured by the Shanghai Composite Index. Also, the Korean Kospi slipped 0.04% but Australian shares rallied 2.63% as the RBA left scope for further easing.


European markets

European shares were mostly lower following large rallies Monday that coincided with mostly better than expected manufacturing data, save for Germany. The Spanish Ibex Index fell 0.07% and the Italian FTSE MIB Index declined 0.54%. Meanwhile, the German DAX fell 0.77%, leading declines, and the French CAC 40 Index fell 0.47% while U.K. shares declined 0.26%.


Commodities

Commodities were mostly stronger overnight despite a rally in the dollar. WTI crude futures rose 0.15% to $98.14 per barrel and Brent crude futures gained 0.17% to $103.18 per barrel. Copper futures declined 0.17% to $315.15 per pound after a massive rally Monday. Gold was higher and silver futures gained 0.75% to $19.73 per ounce.


Currencies

Currency markets saw broad dollar strength overnight as the greenback rose against most major pairs. The EUR/USD was lower at 1.3027 and the dollar gained against the yen to 99.71 after briefly rising as high as 99.91. Overall, the Dollar Index rose on strength against the euro, the Swiss franc, the Canadian dollar, the British pound, and the yen.


Earnings reported Monday

Key companies that reported earnings Monday include:

  • A Schulman (SHLM) reported third quarter earnings per share of $0.50 vs. $0.65 expected on revenue of $548.6 million vs. $576.1 million expected. The company also lowered guidance for the full year and now expects earnings per share of $1.70-$1.80 vs. the consensus forecast of $2.01. Previously, the company had expected earnings per share of between $2.08-2.13.

  • Xyratex (XRTX) reported second quarter earnings per share of $0.11 vs. an expected loss of $0.05 per share on revenue of $216.2 million vs. $203.16 million expected. The company also issued guidance for the third quarter and now expects earnings per share to be between a loss of $0.04 per share and earnings per share of $0.20 vs. the consensus forecast of $0.09. Revenue was guided between $195-225 million vs. the consensus forecast of $$223.1 million.

Premarket movers

Stocks moving in the premarket included:

  • Achillion Pharmaceuticals (ACHN) shares fell 19.02% premarket after an FDA study on the company's drug Sovarprevir was placed on hold.

  • A Shulman Inc. (SHLM) shares fell 13.4% premarket after the company reported worse than expected earnings and lowered guidance.

  • Xyratex (XRTX) shares rose 5.5% but were off of after-hours highs after the company reported better than expected earnings. However, gains were capped by weak revenue guidance.

Earnings

Notable companies expected to report earnings Tuesday include:

  • Acuity Brands (AYI) is expected to report third quarter earnings per share of $0.88 vs. $0.82 a year ago on revenue of $518.76 million vs. $487.5 million a year ago.

  • Constellation Brands (STZ) is expected to report first quarter earnings per share of $0.40 vs. $0.41 a year ago on revenue of $196.52 million vs. $176.62 million expected.

  • The Greenbrier Company (GBX) is expected to report third quarter earnings per share of $0.55 vs. $0.61 on revenue of $503.08 million vs. $507.8 million a year ago.

Economics

On the economics calendar Tuesday, motor vehicle sales will be released throughout the day and the weekly Redbook, the New York NAPM and factory orders data are expected as well. Also, New York Fed President William Dudley and Fed Governor Jeremy Stein are expected to speak and the Treasury will hold its weekly 4-week bill auction. Overnight, global services PMIs will be released and the eurozone retail sales report is also expected.

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