Futures lower as G-20 summit gets underway
Geopolitical concerns remain in focus as investors are set to examine several economic reports ahead of Friday's payroll data.
A G-20 summit hosted by Russian President Vladimir Putin will get underway on Thursday, although the global economy is not likely to be at the top of the agenda.
U.S. President Barack Obama received congressional approval to carry out limited military strikes in Syria, but has yet to convince his international peers to get on board. Obama is expected to try to convince Putin of the necessity of punitive strikes. And despite Russia's ties with Syria, Putin said he would support UN resolution if there is credible evidence Syria had used chemical weapons.
Nasdaq suffered yet another technical glitch on Wednesday. The glitch happened just before a meeting to discuss the three hour outage that took place last month. Wednesday's outage was less severe than last month's. The main data feed failed, causing Nasdaq listed stocks to grind to a halt.
Aside from the Syria issue, international leaders are also expected to focus on the U.S. Federal Reserve tapering of its bond buying program and its effect on world markets. China's Vice Finance Minister Zhu Guangyao warned that the pullback in stimulus was already causing capital flight and currency depreciation. He said that the global impact of the Fed tapering highlights the need for further economic policy coordination.
The Reserve Bank of India's new governor, Raghuram Rajan, inspired confidence after unveiling his plans to help boost the rupee on Wednesday. Rajan plans to give importers and exporters more flexibility with forward currency contracts that will help them better cope with rapidly moving currencies. The rupee soared 2.3% higher after Rajan's announcement.
At its monthly meeting, the Bank of Japan met expectations and agreed to keep its current monetary policy unchanged. The bank released a statement following the meeting with a revised, more positive view of the nation's economy, saying the Japanese economy is "recovering moderately."
Asian markets were mixed. The Japanese NIKKEI index rose just 0.08%, and the South Korean KOSPI was up 0.96%. China's Shanghai composite was down 0.24%, but the Hang Seng index was up 1.22%.
European markets were up across the board ahead of the ECB meeting and the G20 summit. The eurozone's STOXX 600 was up 0.55%, and the UK's FTSE was up 0.68%. Italy's MIB had the largest gains with a 0.82% increase, and the Spanish IBEX climbed 0.58%.
Energy futures remained elevated on worries about supply interruptions. Brent futures and WTI futures were up 0.18% and 0.11% respectively. Gold was down 0.24% to $1,386.70 per ounce and silver lost 0.23%. Tin gained 1.39% and Aluminum lost 1.78%.
The new RBI governor's plans helped the rupee gain 1.51% against the dollar, but the dollar remained strong against the yen, which lost 0.16% and climbed to 99.91 yen to the dollar. The euro was down 0.22% against the greenback and the pound lost 0.20% against the dollar.
Earnings reported Wednesday
Notable companies that reported earnings on Wednesday included:
CIENA (CIEN) reported third quarter earnings per share of $0.23 on revenue of $538.40 million, beating expectations of earnings per share of $0.16 on revenue of $532.28 million.
Dollar General (DG) reported second quarter earnings per share of $0.75 on revenue of 4.39 billion, beating expectations of earnings per share of $0.75 on revenue of $4.36 billion.
Navistar International (NAV) reported a third quarter loss of $2.94 per share on revenue of $2.86 billion, compared to expectations of a loss of $1.30 per share on revenue of $2.92 billion.
Stocks moving in the premarket included:
Salesforce.com (CRM) gained 0.72% in premarket trade after positive earnings helped the stock jump 12.5% last week.
United States Steel (X) was up 0.71% in premarket trade on reports that the company had reached a labor agreement with the United Steelworkers union.
Monsanto (MON) gained 0.10% in premarket trade after gaining 1.2% on Wednesday.
Notable companies expected to report earnings on Thursday include:
Finisar (FNSR) is expected to report first quarter earnings per share of $0.31 on revenue of $266.04 million, compared to last year's earnings per share of $0.12 on revenue of $220.53 million.
UTi Worldwid (UTIW) is expected to report second quarter earnings per share of $0.14 on revenue of $1.15 billion, compared to last year's earnings per share of $0.20 on revenue of $1.16 billion.
Verifone Systems (PAY) is expected to report third quarter earnings of $0.49 on revenue of $9.66 billion, compared to last year's earnings per share of $0.73 on revenue of $9.35 billion.
The economic calendar on Thursday will be dominated by reports from the U.S., including crude oil and gasoline inventories, factory orders, continuing and initial jobless claims and the ADP national employment report. Elsewhere in the world we will see the Bank of England and the European Central Bank's interest rate decisions, the French unemployment rate and German factory orders.
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