Futures higher after Japanese elections
Several corporate earnings are on tap, including Dow component McDonald's, and could shape trading.
U.S. equity futures rose in early premarket trade after the Japanese elections to the upper house of Parliament over the weekend. Prime Minister Shinzo Abe and his party increased majority in both houses, which should pave the way for more policy changes and economic reforms.
In other news, UBS (UBS) reported net income of 690 million Swiss francs in the second quarter, besting the forecast of 586 million francs. Shares rose after the bank reported earnings.
The G20 issued a communique after the countries' representatives met over the weekend. They stressed growth over austerity and targeting fiscal consolidation over the medium-term.
Portugal's President Anibal Cavaco Silva said that the country failed to reach an agreement on a new ruling coalition and now looks set to go back to the polls. Should the current regime loses its majority, it could disrupt bailout reforms and throw in doubt about Portugal's future within the eurozone.
S&P 500 futures rose 8.9 points to 1,689.50.
The EUR/USD was higher at 1.3162.
Spanish 10-year government bond yields were flat at 4.68%.
Italian 10-year government bond yields were flat at 4.41%.
Gold rose 1.76% to $1,316.80 per ounce.
Asian shares were mostly higher in overnight trade following positive results from the Japanese elections. The Japanese Nikkei 225 Index rose 0.47% and the Hang Seng Index gained 0.25% while the Shanghai Composite Index rose 0.61%. Also, the Korean Kospi gained 0.48% and Australian shares rose 0.6%.
European shares were mostly higher overnight following strong earnings and positive sentiment out of Asia. The Spanish Ibex Index rose 0.55% and the Italian FTSE MIB Index gained 0.71%. Meanwhile, the German DAX gained 0.34% and the French CAC 40 Index rose 0.3% as U.K. shares rose 0.12%.
Commodities were mostly higher overnight as precious metals rallied and gold crossed back above $1,300 per ounce. WTI crude futures rose 0.43% to $108.51 per barrel and Brent crude futures gained 0.28% to $108.34 per barrel. Copper futures rose 0.92% to $316.90 per pound. Gold was higher and silver futures rose 2.24% to $19.90 per ounce.
Currency markets were on the move overnight with the yen strengthening. The EUR/USD was higher at 1.3162 and the dollar fell 0.64% against the yen to 100.01. Overall, the Dollar Index fell 0.26% on weakness against the yen, the Swiss franc, and the Canadian dollar.
Earnings reported Friday
Key companies that reported earnings Friday include:
General Electric (GE) reported second quarter earnings per share of $03.36, in line, on revenue of $35.12 billion vs. $35.58 billion expected.
Schlumberger (SLB) reported second quarter earnings per share of $1.15 vs. $1.19 expected on revenue of $11.18 billion vs. $11.11 billion expected.
Honeywell (HON) reported second quarter earnings per share of $1.28 vs. $1.21 expected on revenue of $9.69 billion.
ManpowerGroup (MAN) reported second quarter earnings per share of $1.05 vs. $0.89 expected on revenue of $5.04 billion vs. $4.99 billion expected.
Stocks moving in the premarket included:
UBS (UBS) shares rose 4.51% premarket as the company reported better than expected earnings.
Credit Suisse (CS) rose in sympathy with UBS, gaining 2.43% premarket.
Newmont Mining (NEM) shares rose 2.75% premarket as metal prices bounced.
Goldcorp (GG) shares gained 1.5% premarket on higher gold prices.
Notable companies expected to report earnings Monday include:
Halliburton (HAL) is expected to report second quarter earnings per share of $0.72 vs. $0.80 a year ago.
McDonald's (MCD) is expected to report second quarter earnings per share of $1.40 vs. $1.32 a year ago.
Kimberly-Clark (KMB) is expected to report second quarter earnings per share of $1.39 vs. $1.30 a year ago.
Texas Instruments (TXN) is expected to report second quarter earnings per share of $0.41 vs. $0.44 a year ago.
On the economics calendar Monday, the Chicago Fed national activity index is due out followed by existing home sales and the weekly 3- and 6-month bill auctions.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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