Futures rise on strong Chinese GDP
Strong industrial production data out of China and Japan boost stocks ahead of the consumer confidence report.
In other news, Spanish and Italian industrial production dropped precipitously in November. Spain's industrial production fell 1.5% in the month on expectations of a 2.5% rise and Italian industrial production fell 0.5% on expectations of a 2.0% rise.
Chinese industrial production rose faster than expected in the fourth quarter, alongside GDP, rising 10.3% vs. the 10.1% estimate of economists. Also, Chinese retail sales rose at an annualized rate of 15.2% in December, better than estimates of a 14.9% rise.
Spain's bad bank ratio rose in November to 11.38% from 11.23%, more pain for the Iberian economy.
- S&P 500 futures rose 1.10 points to 1,476.80.
- The EUR/USD was was slightly lower at 1.3362.
- Spanish 10-year government bond yields rose to 5.129%.
- Italian 10-year government bond yields fell to 4.181%.
- Gold rose slightly by 0.02% to $1,691.20 per ounce.
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Asian shares were higher overnight following the strong Chinese GDP report and also on strong industrial production data from Japan. The Japanese Nikkei Index rose 2.86% and the Shanghai Composite Index rose 1.41% while the Hang Seng Index rose 1.12%.
European shares were higher after a whipsaw open despite the weak Italian and Spanish data. The Spanish Ibex Index rose 0.45% and the Italian MIB Index rose 0.45% as well. Meanwhile, the German DAX gained 0.14% and the French CAC rose 0.36% while U.K. shares rose 0.26%.
Commodities were mixed overnight with oil lagging and metals rising. WTI crude futures fell 0.16% to $95.34 per barrel and Brent crude futures fell 0.08% to $111.01 per barrel. Copper futures rose 0.25% to $367.05 per pound following the strong China data. Gold was slightly higher and silver futures rose 0.17% to $31.87 per ounce.
Currency markets were much quieter than previous days overnight save for the Swiss franc. The EUR/USD was lower at 1.3362 and the dollar fell against the yen to 89.96 after breaching 90 Thursday. Overall, the Dollar Index rose 0.15% on strength against the euro, the pound, the Canadian dollar, and the Swiss franc. Notably, the USD/CHF rose 0.56% to 0.9377 and the EUR/CHF rose 0.31% to 1.2513, the highest in 22 months. Barclays analysts see the EUR/CHF heading towards 1.3210, the 200-week moving average, over the next few months. Also, Swiss media has been reporting that the Swiss National Bank may hike the peg to 1.25.
Stocks moving in the premarket included:
- Carnival Corporation (CCL) shares rose 1.6% premarket after it announced that it kept its dividend constant at $0.25 per share.
- Cliffs Natural Resources (CLF) shares fell 2.43% premarket following the company's announcement Thursday that it is set to divest its Brazilian iron ore operations.
- AT&T (T) shares fell 1.36% premarket as the company announced that it is taking a $10 billion charge on pension related costs in the fourth quarter.
- Citigroup (C) shares fell 0.8% premarket as the company reported earnings that disappointed investors.
Notable companies expected to report earnings Friday include:
- Johnson Controls (JCI) is expected to report first quarter earnings per share of $0.51 vs. $0.60 a year ago.
- Morgan Stanley (MS) is expected to report fourth quarter EPS of $0.29 vs. a loss of $0.14 per share a year ago.
- Schlumberger (SLB) is expected to report fourth quarter EPS of $1.08 vs. $1.11 a year ago.
- SunTrust Banks (STI) is expected to report fourth quarter EPS of $0.61 vs. $0.28 a year ago.
On the economics calendar Friday, the preliminary University of Michigan Consumer Confidence survey is due out.
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