Futures rise on stronger data from Japan
Better manufacturing data as well industrial production figures boosted asset prices.
U.S. equity futures rose in early premarket trade Friday following lots of stronger-than-expected economic data from Japan. Better manufacturing data as well industrial production figures boosted asset prices as fears partially abate that the central banks' massive stimulus programs will fail.
In other news around the markets, the Chinese central bank's governor gave a speech overnight on the state of the liquidity crisis among Chinese banks. His words seemed to ease fears as he talked down the risk of a full-scale banking crisis.
A strong data point in Japan was housing starts, which rose 14.5% on a year-over-year basis vs. the 6.2% expected rise. A jump in housing starts could mean that Japanese citizens are preparing for inflation by investing in real estate, which tends to be a store of value in inflationary situations.
German retail sales jumped 0.8% in May vs. April on expectations of a modest gain of 0.2%.
- S&P 500 futures rose 5.1 points to 1,611.70.
- The EUR/USD was higher at 1.3049.
- Spanish 10-year government bond yields fell 5 basis points to 4.72% ahead of the budget statement.
- Italian 10-year government bond yields fell 5 basis points to 4.52%.
- Gold fell 0.83% to $1,201.50 per ounce.
Asian shares were mostly stronger overnight on the better Japan data and relaxed China fears. The Japanese Nikkei 225 Index rose 3.51% and the Topix Index gained 3.19%. In Hong Kong, the Hang Seng Index rose 1.78% while the Shanghai Composite Index gained 1.5% in China. Also, the Korean Kospi rose 1.56% but Australian shares declined 0.1%.
European shares were mixed in thin trade early following the strong move in Asia overnight. The Spanish Ibex Index rose 0.03%, and the Italian FTSE MIB Index declined 0.54%. Meanwhile, the German DAX rose 0.01%, the French CAC 40 Index fell 0.23%, and U.K. shares inched higher by 0.06%.
Commodities were on the move as energy futures rose and gold hovered just above $1,200 per ounce. WTI crude futures rose 0.49% to $97.53 per barrel, and Brent crude futures gained 0.34% to $103.17 per barrel. Copper futures fell 0.07% to $305.75 per pound. Gold was lower, and silver futures rose 1.41% to $18.82 per ounce.
Currency markets were active overnight as the yen weakened following some of the economic data. The EUR/USD was higher at 1.3049, and the dollar gained against the yen by 0.69% to 99.03. Overall, the Dollar Index rose 0.06% on strength against the yen, the pound and the Swiss franc.
- Accenture PLC (ACN) reported third-quarter EPS of $1.14 vs. $1.13 expected on revenue of $7.2 billion vs. $7.42 billion a year ago. However, revenue guidance for the fourth quarter was below forecast.
- Nike (NKE) reported fourth-quarter EPS of 76 cents vs. 75 cents expected on revenue of $6.7 billion vs. $6.64 billion expected.
- ConAgra Foods (CAG) reported fourth-quarter EPS of 60 cents vs. 59 cents expected on revenue of $4.59 billion vs. $4.61 billion expected.
- Commercial Metals (CMC) reported third-quarter EPS of 16 cents vs. 18 cents expected on revenue of $1.8 billion vs. $1.93 billion expected.
- KB Homes (KBH) reported a second-quarter loss of 4 cents per share vs. an expected loss of 7 cents on revenue of $524.4 million vs. $450.8 million expected.
- Accenture (ACN) shares declined 7.75% following some weak guidance.
- Pfizer (PFE) shares rose 1.1% as the board authorized an additional $10 billion share buyback plan.
- Nike (NKE) shares declined 0.91% as investors realized that the next quarter may be slower for the company following some inventory and backlog data released in the earnings report.
- United Continental Holdings (UAL) shares fell 0.81% on some mixed guidance from the company for the current quarter.
Notable companies expected to report earnings Friday include:
- BlackBerry (BBRY) is expected to report first-quarter EPS of 9 cents vs. a loss of 37 cents a year ago on revenue of $3.377 billion vs. $2.814 billion a year ago.
- The Finish Line (FINL) is expected to report first-quarter EPS of 16 cents vs. 24 cents a year ago on revenue of $344.22 million vs. $319.05 million a year ago.
On the economics calendar Friday, the Chicago purchasing managers' index (PMI) and the final reading of the Reuters/University of Michigan Consumer Confidence Index are due out as well as the GDP report from Canada. Also, Fed members Jeremy Stein, Jeffrey Lacker and John Williams are expected to speak. Monday is manufacturing PMI day as PMIs from the eurozone should be released ahead of the U.S. open.
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.
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