Futures flat ahead of Fed decision
The euro rises against the dollar for the first time since 2011 as Italian shares drop.
In other news, Italy sold five- and 10-year bonds this morning with yields falling and the bid-to-cover rising while the take-up reached the maximum target.
Spain's economy contracted 0.7% in the fourth quarter or at a 1.8% annualized rate, slightly weaker than forecasts of a 0.6% contraction in the quarter or a 1.7% annualized rate.
Germany sold benchmark 30-year bonds this morning with yields rising to 2.45% from 2.34% and demand declining.
- S&P 500 futures were flat at 1,505.30.
- The EUR/USD was was higher at 1.3543.
- Spanish 10-year government bond yields rose to 5.18%.
- Italian 10-year government bond yields rose to 4.22%.
- Gold rose 0.25% to $1,667.20 per ounce.
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Asian shares were stronger overnight ahead of the Federal Reserve's rate decision. The Japanese Nikkei Index rose 2.28% and the Shanghai Composite Index rose 1.00% while the Hang Seng Index rose 0.71%. Also, the Korean Kospi rose 0.43% and Australian shares rose 0.16%.
European shares were mostly lower overnight led by Italy and oil service stocks. The Spanish Ibex Index fell 0.02% and the Italian MIB Index declined 1.84% led lower by Saipen, the oil services company, which fell 34%, and financials. Meanwhile, the German DAX fell 0.07% and the French CAC fell 0.01% while U.K. shares rose 0.07%.
Commodities were stronger overnight led by Natural Gas and Copper. WTI crude futures rose 0.26% to $97.80 per barrel and Brent crude futures rose 0.27% to $114.67 per barrel and Natural Gas futures rose 1.04% to $3.23 per million BTU. Copper futures rose 1.1% on increasing Asian demand and low inventories. Gold was higher and silver futures rose 0.84% to $31.45 per ounce.
Currency markets saw broad euro strength and broad yen weakness overnight in a clear risk-on environment. The EUR/USD was higher at 1.3543, the first time above 1.35 since November of 2011, and the dollar rose against the yen to 91.27. Overall, the Dollar Index fell 0.16% on weakness against the euro and the Swiss franc. Also, the Aussie dollar was weak against the greenback and the euro but rose against the yen. Lastly, the dollar-shekel rate was unchanged overnight despite Israel Central Bank Governor Stanley Fischer announcing his intentions to step down.
Stocks moving in the premarket included:
- Chesapeake Energy (CHK) shares rose 9.65% premarket after the company announced that CEO Aubrey McClendon is to step down.
- Amazon (AMZN) shares rose 8.51% after the company reported earnings that missed estimates and showed strong revenue growth.
- Hess (HES) shares rose 1.01% premarket after rising more than 9% Tuesday following the disclosure of Elliot Management's position in the company and its intent to overthrow the board.
- Ford (F) shares fell 0.19% premarket after declining more than 4.6% Tuesday because the company posted earnings that missed estimates and guided for a weak European market in 2013.
Notable companies expected to report earnings Wednesday include:
- Boeing (BA) is expected to report fourth quarter earnings per share of $1.19 vs. $1.83 a year ago. The company is also set to comment on the state of the investigation into the 787 Dreamliner.
- ConocoPhillips (COP) is expected to report fourth quarter earnings per share of $1.42 vs. $2.02 a year ago.
- Las Vegas Sands (LVS) is expected to report fourth quarter earnings per share of $0.59 vs. $0.57 a year ago.
- Marathon Petroleum Corp. (MPC) is expected to report fourth quarter earnings per share of $2.08 vs. a loss of $0.21 a year ago.
- Hess (HES) is expected to report fourth quarter earnings per share of $1.25 vs. $1.17.
- Facebook (FB) is expected to report fourth quarter earnings per share of $0.15.
On the economics calendar Wednesday, MBA purchase applications and the ADP employment report are due out. In addition, the initial fourth quarter GDP estimate will be released for the U.S. and the Federal Reserve's policy statement will be released later this afternoon. Also, the Treasury is set to sell seven-year notes. The Spanish Budget Balance statement is expected and could move markets.
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