Futures up on central banks moves
US markets are set for a higher open on ECB rate cut, upbeat earnings reports.
U.S. equity futures rose slightly in early premarket trade after the Federal Reserve said in its policy statement that it is prepared to increase or decrease asset purchases depending on the state of the economy. The European Central Bank has also just announced it would cut interest rates by 25 basis points to 0.5%, as expected.
The Fed said it was prepared to increase or decrease asset purchases depending on the economy and that inflation is running below the long-term objective. Also, the Fed said that fiscal policy is restraining growth and that labor markets are improving but the unemployment rate is still elevated.
Japan's monetary base expanded at a 23.1% annualized rate in April, much faster than March's rate of 19.8%, showing that the new Bank of Japan policies are already having an effect.
The Chinese HSBC manufacturing PMI slipped to 50.4 in April from 50.6 in March. Economists were expecting a reading of 50.5. The recent reading confirms the official PMI released Wednesday that showed a very modest downtrend in growth in April form March. Also, the eurozone manufacturing index rose to 46.7 in April from 46.5 in March on expectations of a flat reading.
S&P 500 futures rose 2.2 points to 1,579.50.
The EUR/USD was lower at 1.3166.
Spanish 10-year government bond yields fell 1 basis point to 4.13%.
Italian 10-year government bond yields fell 1 basis point to 3.9%.
Gold rose 0.56% to $1,454.30 per ounce.
Asian shares were lower overnight following the weaker than expected Chinese manufacturing data as well as reports from the Chinese Securities Journal saying that inflation could increase in the second quarter (which could lead to tightening of monetary policy). Also, unconfirmed rumors were circulating that China will downgrade its official growth forecast to closer to 7% growth. The Japanese Nikkei Index fell 0.76% and the Shanghai Composite Index fell 0.17% and the Hang Seng Index dropped 0.3%. Also, the Korean Kospi lost 0.34% while Australian shares fell 0.7%.
European shares were mixed ahead of the ECB decision despite the better than expected manufacturing data. The Spanish Ibex Index rose 0.39% while the Italian FTSE MIB Index fell 0.35%. Meanwhile, the German DAX rose 0.15% while the French CAC 40 fell 0.25% and U.K. shares slipped 0.28%.
Commodities were mostly higher overnight following hopes that the Fed will not halt purchases as soon as originally thought and could even increase the rate of purchases. WTI crude futures rose 0.15% to $91.17 per barrel and Brent crude futures rose 0.46% to $100.41 per barrel. Copper futures bounced from new 2013 lows by 0.97% to $311.00 per pound. Gold was higher and silver futures rose 0.95% to $23.57 per ounce.
Currency markets were rather quiet overnight except for the Australian dollar which saw massive weakness against many trading partners. The EUR/USD was lower at 1.3166 and the dollar fell against the yen to 97.27. Overall, the Dollar Index rose 0.26% on strength against the euro and the Swiss franc. Notably, the Australian dollar lost 0.54% against the greenback to 1.0223 and fell 0.65% against the yen while losing 0.35% against the euro.
Earnings reported Wednesday
Key companies that reported earnings Wednesday include:
Facebook (FB) reported first quarter earnings per share of $0.12 vs. $0.13 expected on revenue of $1.46 billion vs. $1.44 billion expected.
CVS Caremark (CVS) reported first quarter earnings per share of $0.83 vs. $0.79 on revenue of $30.76 billion vs. $30.36 billion expected.
Humana (HUM) reported first quarter earnings per share of $2.95 vs. $1.81 on revenue of $10.49 billion vs. $10.25 billion expected.
MasterCard (MA) reported first quarter earnings per share of $6.23 vs. $6.17 on revenue of $1.9 billion vs. $1.93 billion expected.
Visa (V) reported second quarter earnings per share of $1.92 vs. $1.81 on revenue of $2.96 billion vs. $2.85 billion.
Stocks moving in the premarket included:
Facebook (FB) shares rose 1.17% premarket after releasing first quarter results.
Visa (V) shares rose 2.13% premarket following its strong second quarter results.
Notable companies expected to report earnings Thursday include:
Fortress Investment Group (FIG) is expected to report first quarter earnings per share of $0.15 vs. $0.11 a year ago.
American International Group (AIG) is expected to report first quarter earnings per share of $0.87 vs. $1.65 a year ago.
Gilead Pharmaceuticals (GILD) is expected to report first quarter earnings per share of $0.50 vs. $0.46 a year ago.
General Motors (GM) is expected to report first quarter earnings per share of $0.54 vs. $0.93 a year ago.
Kraft Foods (KRFT) is expected to report first quarter earnings per share of $0.64.
LinkedIn (LNKD) is expected to report first quarter earnings per share of $0.31 vs. $0.15 a year ago.
Teva Pharmaceuticals (TEVA) is expected to report first quarter earnings per share of $1.10 vs. $1.47 a year ago.
On the economics calendar Thursday, the Challenger Job Cut Report is expected as well as initial jobless claims, international trade data, and productivity and costs data. Overnight, the Chinese nonmanufacturing PMI is set to be released as well as the British services PMI.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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