Futures rise despite weak China GDP

The slowdown in growth in the world's second largest economy, however, is not as large as feared.

By Benzinga Jul 15, 2013 8:27AM

zurbar age fotostockBy Matthew Kanterman


U.S. equity futures gained in early premarket trade despite weak GDP data from China. China reported second quarter GDP grew 1.7% in the quarter, worse than the expected 1.8% growth rate. However, the annualized figure posted at 7.5% growth, in line with forecasts.


Other Chinese data released overnight included the industrial production, retail sales, and fixed asset investment reports. Industrial production and fixed asset investment both grew less than expected in June, while retail sales outpaced expectations.


Barclays issued a note overnight saying it now sees the Federal Reserve tapering asset purchases in September, which is in line with market expectations. The firm also noted that rate hikes are still very far off on the horizon.


After the close Friday, AT&T (T) announced its intention to acquire Leap Wireless (LEAP) for $15 per share in cash plus the proceeds of the sale of bandwidth in Chicago.

  • S&P 500 futures gained 3.5 points to 1,673.80.

  • The EUR/USD was lower at 1.3033.

  • Spanish 10-year government bond yields rose 4 basis points to 4.82%.

  • Italian 10-year government bond yields rose 4 basis points to 4.53%.

  • Gold rose 0.25% to $1,280.80 per ounce.

Asian markets

Asian shares were higher overnight on the back of the China data despite Japanese markets being closed for a holiday. Chinese shares were higher as the Shanghai Composite Index rose 0.98% and the CSI 300 Index gained 1.4% while the Hang Seng Index in Hong Kong rose 0.12%. Also, the Korean Kospi gained 0.28% and Australian shares gained 0.15%.


European markets

European shares were higher overnight on little news. The Spanish Ibex Index rose 0.12% and the Italian FTSE MIB Index gained 0.73%. Meanwhile, the German DAX rose 0.5% and the French CAC 40 Index gained 0.71% while U.K. shares added 0.68%.


Commodities

Commodities were mixed overnight as oil prices dropped. WTI crude futures fell 0.24% to $105.70 per barrel and Brent crude futures declined 0.02% to $108.79 per barrel. Copper futures fell 0.63% to $313.50. Gold was higher and silver futures were flat.


Currencies

Currency markets were on the move as dollar strength was seen nearly across the board. The EUR/USD was lower at 1.3033 and the dollar gained against the yen to 99.79. Overall, the Dollar Index rose 0.25% on strength against the yen, the Swiss franc, the pound, the euro, and the Canadian dollar.


Earnings reported Friday

Key companies that reported earnings Friday include:

  • Infosys (INFY) reported first quarter earnings per share of $0.73 vs. $0.70 a expected on revenue of $1.99 billion vs. $1.95 billion.

  • J.P. Morgan Chase & Co. (JPM) reported adjusted second quarter earnings per share of $1.45, in line, on revenue of $25.12 billion vs. $25.73 billion expected.

  • Wells Fargo (WFC) reported second quarter earnings per share of $0.98 vs. $0.93 on revenue of $21.4 billion vs. $21.16 billion.

  • United Parcel Service (UPS) pre-reported second quarter earnings per share of $1.13 vs. $1.20 expected.

Premarket movers

Stocks moving in the premarket included:

  • Leap Wireless (LEAP) shares more than doubled, up 116.92% premarket to $17.31, as the market tries to value the bandwidth that is to be sold to estimate the total takeover price.

  • Citigroup (C) shares gained 0.33% heading into its earnings report after a positive mention in Barron's.

  • Boeing (BA) shares gained 1.72% premarket as markets believe that the Ethiopian Air incident that saw a 787 catch fire was most likely an accident and not the company's fault.

Earnings

Notable companies expected to report earnings Monday include:

  • Citigroup (C) is expected to report second quarter earnings per share of $1.18 vs. $1.00 a year ago on revenue of $19.79 billion vs. $18.64 billion a year ago.

  • Gardner Denver (GDI) is expected to report second quarter earnings per share of $1.28 vs. $1.53 a year ago on revenue of $561.49 million vs. $613.01 million a year ago.

  • Wynn Resorts (WYNN) is expected to report second quarter earnings per share of $1.58 vs. $1.38 a year ago on revenue of $1.34 billion vs. $1.25 billion a year ago.

Economics

On the economics calendar Monday, the monthly retail sales report and the Empire State manufacturing index are due out as well as the business inventories report. Also, the Treasury is set to hold the weekly auction of 3- and 6-month bills. Overnight, the RBA minutes and the German ZEW economic sentiment index are expected to be released.


More from Benzinga

1Comment
Jul 15, 2013 8:59AM
avatar

Ha....We have had about 2.5 weeks of upside...Last week was fantastic, records broke in the Markets.

Last week...All positions to the upside...FMV increased substancially..

Overnights show much improvement..

Earnings coming in without a lot of muddling..

Futures rising....

Maybe another week, before some profit id taken...

No one want's to be left out....Some have.

0.50 half week designates only 50% of positions were up..

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