Futures lower after reaching new highs
Investors cautious after China inflation data and ahead of US jobs report.
U.S. equity futures were lower in early premarket trade after the S&P 500 ($INX) reached new record highs again Wednesday. However, strength in bonds and the yen could be precursors to a pullback, which many analysts would see as healthy at these levels.
In other news, industrial production in the U.K. rose faster than expected in March, growing 0.7% compared to forecasts of a rise of 0.2%.
The European Central Bank slashed its growth forecasts for the eurozone, cutting its 2013 growth forecast to -0.4% from 0.0%, and its 2014 forecast to 1.0% from 1.1%.
Australia added a whopping 50,100 new jobs in April compared to forecasts of just 11,000 jobs with the unemployment rate falling to 5.5% from 5.6%.
S&P 500 futures fell 2 points to 1,626.70.
The EUR/USD was lower at 1.3140.
Spanish 10-year government bond yields were flat at 4.09%.
Italian 10-year government bond yields fell 1 basis point to 3.83%.
Gold fell 0.33% to $1,468.60.
Asian shares were mostly lower overnight following mixed Chinese inflation data. The Japanese Nikkei Index fell 0.66% and the Shanghai Composite Index declined 0.59% while the Hang Seng Index lost 0.14%. Also, the Korean Kospi rose 1.18% as the Bank of Korea cuts its key lending rate by 25 basis points and Australian shares fell 0.03%.
European shares were lower in early trade following the downgraded forecasts from the ECB. The Bank of England announced it would leave rates and policy unchanged. The Spanish Ibex Index fell 0.67% while the Italian FTSE MIB Index declined 1.2%. Meanwhile, the German DAX fell 0.18% and the French CAC 40 declined 0.99% while U.K. shares lost 0.08%.
Commodities were mostly lower overnight following the slightly softer than expected wholesale inflation data from China. WTI crude futures fell 0.56% to $96.08 per barrel and Brent crude futures declined 0.48% to $103.84 per barrel. Copper futures fell 1.23% to $332.90 per pound. Gold was lower and silver futures gained 0.14% to $23.96 per ounce.
Currency markets were relatively quiet overnight as the Australian dollar and the yen led gainers while the euro slumped. The EUR/USD was lower at 1.3140 and the dollar fell against the yen to 98.68. Overall, the Dollar Index rose 0.06% on strength against the euro, the Swiss franc, and the Canadian dollar. Notably, the Australian dollar was strong across the board following the employment data and the cable rose ahead of the Bank of England's interest rate decision.
Earnings reported Wednesday
Key companies that reported earnings Wednesday include:
Tesla (TSLA) reported first quarter earnings per share of $0.12 vs. $0.04 expected on revenue of $562.0 million vs. $492.02 million expected. CEO Elon Musk said that better pricing from suppliers helped margins.
Monster Beverage (MNST) reported first quarter earnings per share of $0.37 vs. $0.46 on revenue of $484.2 million vs. $501.74 million expected.
AOL (AOL) reported first quarter earnings per share of $0.41 vs. $0.35 on revenue of $538.3 million vs. $537.15 million expected.
Groupon (GRPN) reported first quarter adjusted earnings per share of $0.03, in-line with forecasts, on revenue of $601.4 million vs. $588.92 million.
News Corp. (NWSA) reported third quarter earnings per share of $0.36, in-line with forecasts, on revenue of $9.54 billion vs. $9.14 billion expected.
Stocks moving in the premarket included:
Tesla (TSLA) shares rose over 18% premarket following the better than expected earnings report and comments from CEO Elon Musk.
Groupon (GRPN) shares rose rose 11.27% premarket following its better than expected earnings report.
Monster Beverage (MNST) shares declined 12.41% premarket following its weaker earnings report.
Yum! Brands (YUM) shares rose 1.4% premarket as inflation in China slows, easing pressure on margins.
Notable companies expected to report earnings Thursday include:
The Carlyle Group (CG) is expected to report first quarter earnings per share of $0.94 on revenue of $795.65 million.
DISH Network (DISH) is expected to report first quarter earnings per share of $0.53 vs. $0.80 a year ago.
Molycorp (MCP) is expected to report a first quarter loss of $0.27 vs. earnings per share of $0.18 a year ago.
Priceline.com (PCLN) is expected to report first quarter earnings per share of $5.27 vs. $4.28 a year ago.
On the economics calendar Thursday, initial jobless claims are due out followed by wholesale trade data. Also, Federal Reserve members Jeffrey Lacker and Charles Plosser are expected to speak. In addition, the Treasury is set to auction 30-year bonds. Overnight, Russia's interest rate decision and an Italian bill auction are expected.
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