Futures lower after weak Japan GDP
US markets are set to continue recent declines as Japanese economic growth slows.
U.S. equity futures were lower in early premarket trade following a much weaker than expected GDP report out of Japan. With little data out Monday in the U.S. and thin trading volumes due to the time of the year, volatile trading could be on tap.
Japan's economy grew 2.6% in the second quarter from a year ago, much worse than the forecast of 3.6% and below the downwardly revised prior reading of 3.8%. However, inflation was reported as higher than expected in the release.
The Bundesbank issued a report over the weekend citing that Greece may need a third bailout after the German elections in September.
In order to prop up the Chinese economy, the Agricultural Bank of China made a huge loan to Shanghai, roughly 12.5% of the city's GDP, to help fund the building of a Disneyland.
S&P 500 futures fell 10.7 points to 1,675.50.
The EUR/USD was lower at 1.33.
Spanish 10-year government bond yields were flat at 4.49%.
Italian 10-year government bond yields were flat at 4.19%.
Gold rose 1.07% to $1,326.30 per ounce.
Asian shares were mixed overnight as Chinese shares rallied on the stealth stimulus of the large loan, while Japanese shares fell on the disappointing GDP report. The Japanese Nikkei 225 Index fell 0.7% and the Topix Index dropped 0.55%. In Hong Kong, the Hang Seng Index gained 2.13% and the Shanghai Composite Index rose 2.39% in China. Also, the Korean Kospi gained 0.22% and Australian shares rose 1.06%.
European shares were lower as the euro dropped on fears that a new fight was set over a third Greek bailout later this year. The Spanish Ibex Index fell 0.35% and the Italian FTSE MIB Index dropped 0.7%. Meanwhile, the German DAX fell 1.12% and the French CAC 40 Index declined 0.67% while U.K. shares fell 0.53%.
Commodities were mixed as precious metals gained on hopes that the Fed will put off tapering the face of weakening global growth and slowing inflation. WTI crude futures fell 0.08% to $105.88 per barrel and Brent crude futures fell 0.51% to $107.67 per barrel. Copper futures were roughly flat while gold was higher and silver futures gained 2.54% to $20.93 per ounce.
Currency markets were on the move overnight as the dollar gained. The EUR/USD was lower at 1.33 and the dollar rose against the yen to 96.71. Overall, the Dollar Index gained 0.32% on strength against the yen, the Swiss franc, the euro, the Canadian dollar, and the British pound.
Earnings reported Friday
Key companies that reported earnings Friday include:
Brookfield Asset Management (BAM) reported second quarter earnings per share of $0.68 vs. $0.40 expected on revenue of $5.17 billion vs. $4.66 billion expected.
James River Coal Company (JRCC) reported a second quarter loss of $1.04 vs. a loss of $1.33 per share expected.
Ebix (EBIX) reported second quarter earnings per share of $0.35 vs. $0.32 expected on revenue of $51.0 million vs. $52.0 million.
Health Management Associates (HMA) reported second quarter earnings per share of $0.07 vs. $0.16 expected on revenue of $1.46 billion vs. $1.7 billion expected.
Tutor Perini Corp. (TPC) reported second quarter earnings per share of $0.32 vs. $0.37 expected on revenue of $1.05 billion vs. $1.07 billion expected.
Notable companies expected to report earnings Monday include:
Sysco (SYY) is expected to report fourth quarter earnings per share of $0.55 vs. $0.55 a year ago on revenue of $11.62 billion vs. $11.05 billion a year ago.
InterOil (IOC) is expected to report a second quarter loss of $0.07 per share vs. a loss of $0.66 per share a year ago on revenue of $261.35 million vs. $299.1 million a year ago.
Buckeye Technologies (BKI) is expected to report fourth quarter earnings per share of $0.56 vs. $0.66 a year ago on revenue of $197.69 million vs. $224.94 million a year ago.
NQ Mobile (NQ) is expected to report second quarter earnings per share of $0.20 vs. $0.14 a year ago on revenue of $39.34 million vs. $19.96 million a year ago.
On the economics calendar Monday, the weekly 3- and 6-month bill auctions are due out ahead of the Treasury Budget Statement. Overnight, the German ZEW Economic Sentiment Index and the eurozone industrial production report are due out.
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