Futures higher heading into Fed decision

Also in focus is the first reading of second quarter GDP as well as a slew of other economic data.

By Benzinga Jul 31, 2013 8:35AM

zurbar age fotostockBy Matthew Kanterman


U.S. equity futures rose slightly in early premarket trade ahead of some key economic data from around the world and the release of the Federal Reserve's statement regarding its policy later in the day. There will be no press conference at the Fed's meeting. In the morning, investor will take a first look at the second quarter GDP data. Also, the Bank of England's and European Central Bank's policy decisions are due out early Thursday.


In other news, the number of people claiming unemployment benefits in Germany in July unexpectedly fell 7,000 on expectations of a flat reading but was worse than June's decline of 12,000. The unemployment rate was in line with expectations and flat month-over-month at 6.8%.


The unemployment situation across the eurozone was slightly better than expected in June coming in at 12.1%, better than the forecast for a 12.2% reading and flat from May's downwardly revised 12.1% (was previously estimated at 12.2%).


Chairman Xu Shaoshi of China's National Reform and Development Commission spoke overnight, saying that the government is committed to the reforms, which will bring a consumption based economy despite the negative impact it may have in the short run. The government will proactively boost domestic demand and support smaller companies.

  • S&P 500 futures rose 1.7 points to 1,686.40 per ounce.

  • The EUR/USD was higher at 1.3280.

  • Spanish 10-year government bond yields rose 1 basis point to 4.67%.

  • Italian 10-year government bond yields rose 1 basis point to 4.41%.

  • Gold rose 0.63% to $1,333.20 per ounce.

Asian markets

Asian shares were mixed overnight as Japanese shares sold off on news that the government will stand by its policy to increase the sales tax in April 2014 to lower deficits. The Japanese Nikkei 225 Index fell 1.45% and the Topix Index declined 1.47%. In Hong Kong, the Hang Seng Index fell 0.32% while the Shanghai Composite Index rose 0.19% in China. Also, the Korean Kospi fell 0.16% and Australian shares gained 0.69%.


European markets

European shares were mixed ahead of key U.S. data, after European data was roughly in line with expectations. The Spanish Ibex Index fell 0.35% and the Italian FTSE MIB Index declined 0.25%. Meanwhile, the German DAX rose 0.12% and the French CAC 40 Index rose 0.18% while U.K. shares gained 0.62%.


Commodities

Commodities were mostly higher overnight as metals rose into the Fed's meeting. WTI crude futures gained 0.4% to $103.49 per barrel and Brent crude futures fell 0.27% to $106.62 per barrel. Copper futures rose 1.27% to $308.05 per pound. Gold was higher and silver futures jumped 1.14% to $19.91 per ounce.


Currencies

Currency markets were on the move overnight as the dollar weakened ahead of the GDP report and the Fed. The EUR/USD was higher at 1.3280 and the dollar fell against the yen to 97.67. Overall, the Dollar Index declined 0.09% on weakness against the yen, the Swiss franc, the Canadian dollar and the euro despite strength against the pound.


Earnings reported Tuesday

Key companies that reported earnings Tuesday include:

  • Merck (MRK) reported second quarter earnings per share of $0.84 vs. $0.83 expected on revenue of $11.00 billion vs. $11.22 billion.

  • Pfizer (PFE) reported second quarter earnings per share of $0.56 vs. $0.55 expected on revenue of $12.97 billion vs. $13.03 billion expected.

  • Amgen (AMGN) reported second quarter earnings per share of $1.89 vs. $1.74 expected on revenue of $4.68 billion vs. $4.49 billion expected.

  • Aetna (AET) reported second quarter earnings per share of $1.52 vs. $1.41 expected on revenue of $11.54 billion vs. $11.99 billion a year ago.

Premarket movers

Stocks moving in the premarket included:

  • Cubist Pharmaceuticals (CBST) shares rose 5.74% premarket after the company announced two acquisitions that have a combined total maximum price of just over $1.6 billion (Benzinga).

  • Trius Therapeutics (TSRX) shares gained 17.42% premarket as Cubist announced that it was buying the company for $13.50 per share plus a contingent right value (CVR) worth an additional $2 in cash dependent on certain sales figures.

  • Optimer Pharmaceuticals (OPTR) shares fell 7.83% premarket as Cubist announced that it was buying the company for $10.75 per share in cash with a CVR worth an additional $5.

  • Potash (POT) shares fell 0.89% premarket after the large drop the day before as market prices for its fertilizers will fall. Mosaic (MOS), Agrium (AGU), and Intrepid Potash (IPI) were all slightly higher premarket.

Earnings

Notable companies expected to report earnings Wednesday include:

  • Mastercard (MA) is expected to report second quarter earnings per share of $6.30 vs. $5.65 a year ago on revenue of $2.00 billion vs. $1.82 billion a year ago.

  • Metlife (MET) is expected to report second quarter earnings per share of $1.33, flat from a year ago, on revenue of $17.33 billion vs. $16.79 billion a year ago.

  • Comcast (CMCSA) is expected to report second quarter earnings per share of $of $0.63 vs. $0.50 a year ago on revenue of $16.01 billion vs. $15.21 billion a year ago.

  • Hess Corp. (HES) is expected to report second quarter earnings per share of $1.40 vs. $1.72 a year ago on revenue of $4.62 billion vs. $9.31 billion a year ago.

  • CBS (CBS) is expected to report second quarter earnings per share of $0.72 vs. $0.65 a year ago on revenue of $3.52 billion.

Economics

On the economics calendar Wednesday, MBA purchase applications and the ADP employment report kick off a heavy economic calendar followed by the first estimate of second quarter GDP, the employment cost index, the Treasury refunding announcement and the Chicago PMI. Later, the Fed is due to release its policy statement. Overnight, manufacturing PMIs from China, the eurozone, France, Germany, Italy, Spain and the U.K. are due out, as well as the Bank of England and European Central Bank rate decisions.


More from Benzinga

3Comments
Jul 31, 2013 10:38AM
avatar

Pretty much the Media and Populace allowing this to happen NTU.

And Capitalism and Big Business are in-charge of the Government.

Our "4th. Estate" does not question enough anymore, along with forcing out "truthful answers."

They have lost their drive and are becoming "bobble-heads" for sensationalism.

Jul 31, 2013 9:14AM
avatar

"The government has implemented some changes in how it calculates GDP. For example, research and development spending will now be treated as investment, and defined benefit pension plans will be measured on an accrual basis, rather than as cash".  Oh yea lets move the goal posts a bit and secure our "more" politically correct result.  So much garbage when politics becomes an accepted form of formal of analytical communication.  This is becoming Pathetic.   REVISIONS

"Adding to the better tenor of the report, comprehensive revisions to the data cast the economy in a better light than previously."

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
262
262 rated 2
480
480 rated 3
651
651 rated 4
649
649 rated 5
629
629 rated 6
616
616 rated 7
496
496 rated 8
346
346 rated 9
111
111 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
EXCEXELON CORPORATION9
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.