Futures slightly lower on global economic data
Investors await the release of several of economic indicators due out, including private sector employment.
U.S. equity futures were slightly lower in early Wednesday trade after stocks broke a 20-Tuesday winning streak. Investors eye key economic reports from around the world heading into trading Wednesday as global service PMIs are due out.
Among the already released service PMIs, the HSBC China services PMI and the Spanish and British service PMIs beat expectations, while France's was in line and the broad eurozone, Italian and German service PMIs missed expectations.
Apple (AAPL) shares declined in after-hours trading after the International Trade Commission ruled that Apple had infringed on one of Samsung's patents in some iPhone 3s and 4s and has ordered a ban on selling these products in the U.S. Apple already plans to appeal the decision and the Obama administration also has 60 days to veto the ruling.
Other eurozone economic data was released early Wednesday as a new report showed that first quarter GDP contracted 0.2%, in line with expectations. However, the annualized rate fell 1.1% vs. an expected drop of 1.0%. eurozone retail sales were also a poor print this morning as April retail sales declined 0.5% from March on expectations of a decline of 0.1%. Retail sales had fallen 0.2% in March, which was downwardly revised from the previous reading of -0.1%
Japanese Prime Minister Shinzo Abe spoke overnight, outlining some key reforms that the administration looks set to roll out to ramp up the economy. Proposals included removing barriers to corporate activity, opening up of infrastructure investments to the private sector, and aims to double foreign direct investments all in efforts to boost GNI by 3% per annum.
Australia's first quarter GDP report was also released last night and it showed that the economy contracted 0.6% in the first quarter vs. a 0.7% expected increase. On an annualized rate, the economy grew 2.5% vs. 2.7% expected, weighing further on the already crippling Australian dollar.
S&P 500 futures declined 3.5 points to 1,627.70.
The EUR/USD was lower at 1.3068 in volatile trading.
Spanish 10-year government bond yields rose 1 basis point to 4.43% in narrow trading.
Italian 10-year government bond yields rose 1 basis point to 4.11%.
Gold rose 0.17% to $1,399.60 per ounce.
Asian shares retreated overnight with the Nikkei Index plunging once again as the yen strengthened on fears that the lack of a concrete plan for growth from the administration (only a broad outline of a plan was presented) would mean the expected recovery would not come. The Japanese Nikkei Index fell 3.83% and the broader Topix Index declined 3.15%. The Shanghai Composite Index fell 0.03% and the Hang Seng Index fell 0.97% in Hong Kong. Also, the Korean Kospi declined 1.52% and Australian shares shed 1.34%.
European shares saw declines across the core nations as peripheral shares held ground. The Spanish Ibex Index gained 0.44% on the strong services PMI data (47.3 vs. 45.0 expected) and the Italian FTSE MIB Index gained 0.44%. Meanwhile, the German DAX fell 0.35% and the French CAC 40 fell 0.57% as U.K. shares declined 0.73%.
Commodities were slightly stronger overnight as the dollar halted its winning streak. WTI crude futures rose 0.48% to $93.76 per barrel and Brent crude futures gained 0.36% to $103.61 per barrel. Copper futures rose 0.24% despite the weak Australian data. Gold was higher and silver futures rose 0.29% to $22.48 per ounce.
Currency markets were on the move overnight as the yen strengthened across the board with the dollar gaining against most other majors and the Australian dollar continuing its sell off. The EUR/USD was lower at 1.3068 after rising as high as 1.31 earlier and the dollar fell against the yen to 99.76. Overall, the Dollar Index was flat on gains against the euro and the Swiss franc despite weakness against the British pound and the yen.
Earnings reported Tuesday
Key companies that reported earnings Tuesday include:
Dollar General (DG) reported first quarter earnings per share of $0.71, in line with expectations. However, the company lowered its full year guidance which was also below analyst forecasts.
Shuffle Master (SHFL) reported second quarter earnings per share of $0.21 vs. $0.20 expected on record revenue of $77.4 million vs. $71.57 million expected.
Bob Evans Farms (BOBE) reported fourth quarter earnings per share of $0.71 vs. $0.64 expected on revenue of $353.9 million vs. $331.41 million expected.
Analogic (ALOG) reported third quarter earnings per share of $0.76 vs. $0.66 expected on revenue of $125.8 million vs. $135.98 million.
Stocks moving in the premarket included:
Analogic (ALOG) shares declined 4.74% in after-hours trading after reporting earnings.
Shuffle Master (SHFL) shares rose 5.07% after reporting a record quarter and making some positive comments on the business outlook.
Apple (AAPL) shares declined 0.49% in after-hours trading after falling more than 1% on the ITC ruling news.
Tesla Motors (TSLA) shares declined 0.89% after founder Elon Musk made some mixed comments at the company's investor presentation.
Notable companies expected to report earnings Wednesday include:
Brown Forman Corp. (BF.B) is expected to report fiscal fourth quarter earnings per share of $0.46 vs. $0.49 a year ago.
Francesca's Holdings (FRAN) is expected to report first quarter earnings per share of $0.26 vs. $0.20 a year ago.
Hovnanian Enterprises (HOV) is expected to report a second quarter loss of $0.05 per share vs. a profit of $0.02 per share a year ago.
Verifone Systems (PAY) is expected to report second quarter earnings per share of $0.47 vs. $0.64 a year ago
On the economics calendar Wednesday, MBA purchase applications are due out followed by the ADP employment report. Productivity and costs data are set to be released later followed by factory orders, the ISM non-manufacturing index, and the Beige Book, the latter two being the big reports for the day. Overnight, more reports are expected, including Japanese fund flow data, Spanish and French bond auctions, German factory orders, and interest rate decisions from both the Bank of England and the European Central Bank.
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