Futures marginally lower ahead of quiet day
US markets are set for a steady open after Monday's gains and ahead of several Fed speakers.
U.S. equity futures traded marginally lower after Monday's gains and heading into a quiet day both on the earnings and economics calendars. Should the S&P 500 ($INX) post gains Tuesday, it would mark the 21st consecutive Tuesday of gains.
In other news, Spain's unemployment count, those collecting unemployment benefits, declined by 98,265 in May to 4.89 million, a drop of almost 2%. The figure was much stronger than expected and Prime Minister Mariano Rajoy had been hinting that Spain may be close to turning a corner economically.
The Reserve Bank of Australia left rates on hold at 2.75% as expected. In the accompanying statement, the RBA noted that there is scope for further easing should it be required, that inflation remains tepid, and that the Aussie dollar still remains elevated given the drop in commodity prices.
European Stability Mechanism (ESM) Chief Klaus Regling announced this morning that the bailout facility will be prepared to make direct bank injections once the banking regulator is firmly established within the European Central Bank. Previously, the ESM would have to loan money to governments to inject to banks, as it did with Spain in the summer of 2012. Regling also added that 22% of the ESM's bonds have been bought by Asian investors, the largest international holders.
S&P 500 futures declined 1.1 points to 1,635.10.
The EUR/USD was flat at 1.3076.
Spanish 10-year government bond yields were flat at 4.47%.
Italian 10-year government bond yields were flat at 4.16%.
Gold fell 0.49% to $1,405.00 per ounce.
Asian shares closed mixed overnight as Japanese shares recouped some of Monday's losses and Chinese markets declined. The Japanese Nikkei Index gained 2.05% while the broader Topix Index rose 2.6% despite the Shanghai Composite Index dropping 1.15% and the Hang Seng Index eking out a gain of 0.01%. Also, the Korean Kospi closed flat on the day as Australian shares fell 0.45% in tandem with China.
European shares were higher in early trade after the positive Spanish economic news and on the ESM news. The Spanish Ibex Index gained 0.90% and the Italian FTSE MIB Index rose 0.93%. Meanwhile, the German DAX rose 0.52% and the French CAC 40 Index gained 0.43% while U.K. shares rose 0.47%.
Commodities were mostly lower save for copper as dollar strength returned. WTI crude futures declined 0.67% to $92.82 per barrel and Brent crude futures fell 0.32% to $101.73 per barrel. Copper futures rose 0.5% to $334.70 following the RBA decision. Gold was lower and silver futures fell 0.88% to $22.52 per ounce.
Currency markets were on the move overnight as the dollar regained some ground following recent losses. The EUR/USD was flat at 1.3076 and the dollar rose against the yen to 100.25, back above the psychological 100 level that it broke down through yesterday. Overall, the Dollar Index rose 0.17% on strength against the yen, the Canadian dollar, and the Swiss franc. Notably, the Aussie dollar weakened overnight as well following the RBA comments that there is scope for further easing and that the currency remains strong.
Earnings reported Monday
Key companies that reported earnings Monday include:
Cracker Barrel (CBRL) reported third quarter earnings per share of $1.02 vs. $0.94 expected on revenue of $640.4 million vs. $630.78 million expected.
ABM Industries (ABM) reported second quarter EPS of $0.36 vs. $0.33 expected on revenue of $1.17 billion vs. $1.18 billion expected. The company also raised its full-year guidance.
G-III Apparel (GIII) reported first quarter EPS of $0.05 vs. an expected loss of $0.05 per share on revenue of $272.6 million. The company also raised guidance for the next quarter and for the full year although guidance for the next quarter came in slightly below Wall Street forecasts while the full year guidance was strong.
SAIC Corp. (SAI) reported first quarter EPS of $0.23 vs. $0.26 expected on revenue of $2.71 billion vs. $2.59 billion expected. SAIC also raised guidance in the quarter.
Verint Systems (VRNT) reported first quarter EPS of $0.44 vs. $0.52 expected on revenue of $205.4 million vs. $203.34 million expected. The company also guided full-year earnings roughly in line with Wall Street forecasts.
Stocks moving in the premarket included:
G-III Apparel (GIII) shares climbed 6.69% premarket after the company reported better than expected earnings and raised full year guidance to above Wall Street's forecasts.
Zynga (ZNGA) shares bounced back 0.3% premarket after dropping 12.03% Monday as the company announced that it is set to lay off 18% of its workforce. Before the announcement, All Things D ran a report with a similar story.
ABM Industries (ABM) shares gained 3.25% premarket after the company reported better than expected earnings and raised its guidance.
Microchip Technology (MCHP) shares gained 4.42% premarket as the company raised guidance for the first quarter. The company now sees sales growth of 4%-7% vs. 2%-6% previously and expects adjusted EPS of $0.52-$0.56 vs. the consensus Wall Street estimate of $0.52.
Notable companies expected to report earnings Tuesday include:
Dollar General (DG) is expected to report first quarter EPS of $0.71 vs. $0.63 a year ago.
Bob Evans Farms (BOBE) is expected to report fourth quarter EPS of $0.64 vs. $0.80 a year ago.
Mattress Firm Holding Corp. (MFRM) is expected to report first quarter EPS of $0.37 vs. $0.31 a year ago.
Shuffle Master (SHFL) is expected to report second quarter EPS of $0.20 vs. $0.20 a year ago.
Analogic (ALOG) is expected to report third quarter EPS of $0.66 vs. $0.59 a year ago.
On the economics calendar Tuesday, international trade data are due out as well as the weekly Redbook report. Also, Federal Reserve members Sarah Bloom Raskin, Esther George and Richard Fischer are expected to speak. The Treasury is also expected to auction four-week bills. Overnight, the Australian GDP report, HSBC China non-manufacturing PMI, eurozone and British services PMIs, and the Eurozone's GDP report are all expected to be released.
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