Futures lower on weak Chinese data
Markets are headed for a down open on slower than expected growth in China.
U.S. equity futures traded sharply lower in the premarket following Friday's sell off on weaker than expected economic data from China. China reported that first quarter GDP grew at a 7.7% annualized rate vs. 8.0% expected, while industrial production only grew 8.9% vs. 10.1% expected.
Also, retail sales for March grew 12.4% vs. the same period a year ago, less than forecasts of 12.6% growth, and fixed asset investment excluding rural investment grew only 20.9% vs. 21.3% expected.
In other news, the eurozone's trade balance for February grew to 10.4 billion euros from a downwardly revised 4.7 billion euro deficit in January, better than forecasts of a 3 billion euro surplus.
Greece's finance minister Stournaras has reached a deal with a Troika over the nation's bailout review, paving the way for the lenders to release the next 2.8 billion bailout tranche to the country.
Venezuelans elected Nicolas Maduro, the former Vice-President under the regime of Hugo Chavez, President in a narrow victory, restoring the previous regime to power. Maduro is expected to keep similar policies in place as his predecessor representing little change for multinationals operating in the country.
S&P 500 futures dropped 6.1 points to 1,575.30.
The EUR/USD was lower at 1.3074.
Spanish 10-year government bond yields rose to 4.7% from 4.69%.
Italian 10-year government bond yields rose to 4.34% from 4.33%.
Gold continued its sharp decline to $1,394.70 per ounce, losing an additional 7.1%.
Asian shares traded sharply lower overnight following the weaker than expected Chinese data as well as comments from a former Japan advisor to George Soros, Takeshi Fujimaki, who said that Japan's new policies will fail and the market will ultimately crash as the government defaults. The Japanese Nikkei Index declined 1.55% and the Shanghai Composite Index fell 1.12% while the Hang Seng Index fell 1.43%. Also, the Korean Kospi declined 0.2% while Australian shares lost 0.91%.
European shares also traded lower following the Asian weakness creating global growth fears. The Spanish Ibex Index fell 0.84% and the Italian FTSE MIB Index declined 0.92%. Meanwhile, the German DAX fell 0.66% and the French CAC fell 0.82% ahead of a 7.7 billion euro bill auction in France while U.K. shares lost 0.94%.
Commodities were taking it on the proverbial chin overnight in what can only be described as continued margin selling weighing on prices in a clear risk-off environment. WTI crude futures plummeted 2.87% to $88.98 per barrel and Brent crude futures fell in tandem by 2.14% to $101.05 per barrel. Copper futures dropped 2.27% to $328.75 per pound on continued excess supply fears and now also demand fears from China. Gold was sharply lower and silver futures dropped an astonishing 10.05% to $23.74 per ounce.
Currency markets echoed the risk-off mood from commodities overnight as the yen and dollar gained and the euro dropped. The EUR/USD was lower at 1.3074 and the dollar fell against the yen to 98.03. Overall, the Dollar Index gained 0.02% on strength against the euro, the pound, the Canadian dollar, and the Swiss franc. Notably, the euro lost 0.69% against the yen and the Aussie dollar weakened across the board on Chinese fears.
Earnings reported Friday
Key companies that reported earnings Friday include:
J.P. Morgan Chase (JPM) reported first quarter earnings per share of $1.59 vs. $1.39 expected on revenue of $25.12 billion, which was weaker than forecasts of $25.94 billion.
Wells Fargo (WFC) reported first quarter earnings per share of $0.92 vs. $0.88 expected on revenue of $21.26 billion vs. $21.6 billion expected.
Stocks moving in the premarket included:
Life Technologies (LIFE) shares gained 5.93% premarket after The Wall Street Journal reported that Thermo Fisher Scientific (TMO) was close to purchasing Life for close to $13 billion, or about $76.30 per share.
Goldcorp (GG) shares fell 6.00% premarket as gold prices slid below $1,400 per ounce.
Silver Wheaton (SLW) shares fell 8.54% premarket as silver prices skidded more than 10% overnight.
Freeport-McMoRan Copper and Gold (FCX) shares fell 4.45% premarket as copper prices fell and also on fears that Chinese copper demand is slowing as growth missed expectations.
Notable companies expected to report earnings Monday include:
Citigroup (C) is expected to report first quarter earnings per share of $1.19 vs. $1.11 a year ago.
American Electric Power (AEP) is expected to report first quarter earnings per share of $0.81 vs. $0.80 a year ago.
Charles Schwab (SCHW) is expected to report first quarter earnings per share of $0.16 vs. $0.15 a year ago.
Heartland Express (HTLD) is expected to report first quarter earnings per share of $0.19 vs. $0.19 a year ago.
M&T Bank (MTB) is expected to report first quarter earnings per share of $1.96 vs. $1.50 a year ago.
On the economics calendar Monday, the Empire State Manufacturing Index is expected to be released as well as TIC flows and the NAHB Housing market Index. Also, the Treasury is set to auction 3- and 6-month bills. Overnight, the German ZEW Economic Sentiment Index and Spanish bill auctions could move markets.
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