Futures gain on Asia strength
US markets are set for a higher open on news of yen weakness as earnings season continues full steam ahead.
U.S. equity futures rose sharply in premarket trading following strength abroad, as Asian and European shares rallied alongside the yen's slide. Yen weakness was a key driver of the risk-on environment as the USD/JPY closed in on the key 100 level once again.
In other news, the G20 refrained from openly criticizing Japan's easing moves as manipulating its currency, a key sign that the group of nations and other global groups support Japan's efforts to reflate its economy.
The Wall Street Journal reported overnight that Japan's four largest life insurers are to unveil new investment plans this week. Alongside the government easing program is a private sector investment plan, which could see new money flow into foreign bonds and equities.
Over the weekend, European Central Bank Board Member Ewald Nowotny said that a rate cut is not needed yet and that policy needs to take a wait and see approach.
S&P 500 futures rose 9.1 points to 1,556.70.
The EUR/USD was fell slightly to 1.3047.
Spanish 10-year government bond yields fell 10 basis points to 4.53%.
Italian 10-year government bond yields fell 9 basis points to 4.13%.
Gold rose 2.02% to $1,423.00 per ounce.
Asian shares were mostly stronger overnight following the news out of Japan over the weekend. The Japanese Nikkei Index rose 1.89% overnight while the Shanghai Composite Index slipped 0.11% and the Hang Seng Index gained 0.14%. Also, the Korean Kospi rose 1.03% and Australian shares rose 0.7%.
European shares rose in tandem as Italy elected an interim government to set up a new round of elections. The Spanish Ibex Index rose 1.19% while the Italian FTSE MIB Index rose 2.33% on reduced political uncertainty. Meanwhile, the German DAX rose 0.84% and the French CAC rose 0.59% and U.K. shares rose 0.86%.
Commodities were mostly higher overnight led by gains in precious metals. WTI crude futures rose 0.44% to $88.30 per barrel and Brent crude futures gained 0.48% to $99.89 per barrel. Copper futures declined 0.82% to $314.20 on continued supply fears, making a new 2013 low once again. Gold was higher and silver futures rose 1.83% to $23.38 per ounce.
Currency markets were in flux overnight and in focus as yen weakness drove broad market gains. The EUR/USD was slightly lower at 1.3047 and the dollar rose against the yen to 99.78 after touching as high as 99.90. Overall, the Dollar Index rose 0.08% on strength against the euro, the yen and the Swiss franc.
Earnings reported Friday
Key companies that reported earnings Friday include:
General Electric (GE) reported first quarter earnings per share of $0.39 vs. $0.35 expected on revenue of $35.0 billion vs. $34.7 billion expected.
Honeywell (HON) reported first quarter earnings per share of $1.21 vs. $1.14 a year ago on revenue of $9.33 billion vs. $9.44 billion a year ago.
McDonald's (MCD) reported first quarter earnings per share of $1.26 vs. $1.27 expected on revenue of $6.61 billion vs. $6.59 billion expected.
Schlumberger (SLB) reported in-line earnings per share of $1.01 on revenue of $10.67 billion vs. $10.75 billion expected.
Under Armour (UA) reported first quarter earnings per share of $0.07 vs. $0.03 expected on revenue of $472 million vs. $467.57 million expected.
Stocks moving in the premarket included:
Newmont Mining (NEM) gained 0.85% premarket as precious metals prices attempted to stage a rebound overnight.
General Electric shares fell 0.69% premarket after CEO Immelt noted European weakness as a hindrance to performance in the previous quarter.
Notable companies expected to report earnings Monday include:
Ameriprise Financial (AMP) is expected to report first quarter earnings per share of $1.56 vs. $1.45 a year ago.
Caterpillar (CAT) is expected to report first quarter earnings per share of $1.45 vs. $2.37 a year ago. Investors should watch any comments about Chinese business following the recent weak first quarter GDP data.
Halliburton (HAL) is expected to report first quarter earnings per share of $0.57 vs. $0.89 a year ago.
Netflix (NFLX) is expected to report fourth quarter earnings per share of $0.18 vs. a loss of $0.08 per share a year ago.
U.S. Airways (LCC) is expected to report first quarter earnings per share of $0.28 vs. a loss of $0.13 per share a year ago.
On the economics calendar Monday, the Chicago Fed national activity index is due out as well as existing home sales. Also, the Treasury is set to auction three- and six-month bills. Overnight, the flash China HSBC manufacturing PMI is due out as well as flash manufacturing and services PMIs for the eurozone, Germany and France.
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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