Futures surge as global shares rebound
US markets are set to follow global shares higher after reassuring comments from central banks around the world about monetary policies.
U.S. equity futures rose sharply in early premarket trade as fears of the Federal Reserve tapering its easing measures subsided somewhat. Those fears drove markets lower last week. Eyes will be on key retail earnings and economic data in Tuesday's session as well as comments from the Europe-Next Steps conference in Paris.
Japanese Prime Minister Shinzo Abe's top economic adviser Koichi Hamada spoke overnight, saying that Bank of Japan Governor Kuroda should ease further if he deems it necessary and not let policy be dictated by market pressures. Recently, fears have grown over the rise in bond yields associated with Japan's easing, but these Hamada's comments seem to be quelling some fears.
Christian Noyer, Banque de France chief and European Central Bank board member spoke overnight, saying that no major central bank has ever lowered deposit rates below zero into negative territory and mentioned that such policies had mixed results in smaller countries. The comments come as some economists still expect the ECB to ease policy further and potentially cut deposit rates into negative territory.
S&P 500 futures rose 11.1 points to 1,661.70.
The EUR/USD was lower at 1.2920.
Spanish 10-year government bond yields rose 1 basis point to 4.34%.
Italian 10-year government bond yields rose 1 basis point to 4.06%.
Gold fell $7.70 or 0.56% to $1,378.90 per ounce.
Asian shares were stronger overnight on relaxed fears over Japan's massive easing efforts as well as reduced fears over China's economy spurred by weaker than expected data last week. The Japanese Nikkei Index rose 1.2% and the Shanghai Composite Index rose 1.24% while the Hang Seng Index gained 1.05%. Also, the Korean Kospi gained 0.32% and Australian shares added 0.22%.
European shares were higher for the second consecutive day as U.K. markets reopened Tuesday following a bank holiday on Monday. The Spanish Ibex Index rose 1.32% and the Italian FTSE MIB Index gained 1.56%. Meanwhile, the German DAX rose 1.1% and the French CAC 40 gained 1.26% while U.K. shares rallied 1.66%.
Commodities were mixed overnight as energy futures rallied while metal futures were mostly lower as the Dollar continued its trend of strengthening. WTI crude futures rose 0.5% to $94.62 per barrel and Brent crude futures gained 0.89% to $103.53 per barrel. Copper futures added 0.44% to $331.00 per pound. Gold was lower and silver futures declined 1.07% to $22.26.
Currency markets continued to show dollar strength overnight as the greenback rose against most major trading partners while the yen resumed its decline. The EUR/USD was lower at 1.2920 and the dollar gained against the yen to 101.99, a gain of 1.02%. Overall, the Dollar Index gained 0.2% on strength against the yen, the euro, the Swiss franc, and the Canadian dollar. Notably, the Australian dollar was higher across the board despite Goldman Sachs making negative comments on the currency.
Earnings reported Friday
Key companies that reported earnings Friday include:
Abercrombie & Fitch (ANF) reported a first quarter loss of $0.09 per share vs. an expected loss of $0.05 per share on revenue of $838.8 million vs. $942.86 million expected.
Foot Locker (FL) reported first quarter earnings per share of $0.91 vs. $0.87 expected on revenue of $1.64 billion vs. $1.63 billion expected.
Stocks moving in the premarket included:
AstraZeneca (AZN) shares gained 2.61% on the acquisition announcement.
Citigroup (C) shares rose 1.56% in the premarket as financials rose as a sector.
Exelon Corp. (EXC) shares declined 1.3%, leading utilities lower as reports showed that power rates are declining and also on apparent sector rotation into cyclicals such as financials.
Ford (F) shares rose 1.35% premarket after Barron's made positive comments on the stock this weekend, saying that earnings will grow as Europe recovers.
Notable companies expected to report earnings Tuesday include:
Canadian Solar (CSIQ) is expected to report a first quarter loss of $0.78 per share vs. a loss of $0.49 per share a year ago.
Guidewire Software (GWRE) is expected to report first quarter earnings per share of $0.03 vs. $0.10 a year ago.
Tiffany (TIF) is expected to report first quarter earnings per share of $0.52 vs. $0.64 a year ago.
On the economics calendar Tuesday, the S&P Case-Shiller Index kicks off the calendar followed by consumer confidence data, the Richmond Fed manufacturing index, and the Dallas Fed manufacturing index. Also, the Treasury is set to auction three- and six-month bills and two-year notes. Overnight, Bank of Japan Governor Kuroda is expected to speak, German unemployment data, German CPI, and Brazilian GDP are expected.
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