Futures slightly higher as global shares drop
For now, US markets are indicated to rise at the open ahead of data on manufacturing and construction spending.
U.S. equity futures were slightly higher in early premarket trade despite weakness elsewhere around the world. Better than expected manufacturing PMIs across the eurozone are helping to prop assets despite sustained weakness in emerging markets ahead of what Societe General this weekend called an impending "rout of emerging market currencies."
The eurozone manufacturing PMI rose to 48.3 in May from 47.8 in April on expectations of a flat reading with all major countries reporting better than expected results in the report. Despite rising, the under 50 PMI shows that the manufacturing sector across Europe is still contracting.
England's manufacturing PMI was also released this morning and showed further strength in the European economy as the PMI rose to 51.3 in May from an upwardly revised 50.2 in April on expectations of a reading of 50.2.
Protests in Turkey continued Monday as the lira fell against the dollar for a fifth day and two-year note yields climbed 39 basis points. Protesters took to the streets in major cities such as Ankara and Istanbul in opposition of Prime Minister Recep Tayyip Erdogan, whom they want to resign.
S&P 500 futures rose 2.6 points to 1,631.60.
The EUR/USD was higher at 1.3024.
Spanish 10-year government bond yields rose 1 basis point to 4.45%.
Italian 10-year government bond yields rose 2 basis points to 4.17%.
Gold rose 0.27% to $1,396.70 per ounce.
Asian shares traded mostly lower overnight as the Japanese Nikkei Index recorded its fourth loss in eight trading days and has lost some 17% over the span. The Nikkei declined 3.72% while the Shanghai Composite Index eked out a gain of 0.02% as the Hang Seng Index declined 0.49%. Also, the Korean Kospi fell 0.57% and Australian shares lost 0.78%.
European shares were lower in early trading but have bounced off of the lows of the day after the stronger than expected PMI reports across the continent. The Spanish Ibex Index declined 0.54% and the Italian FTSE MIB Index fell 0.76%. Meanwhile, the German DAX lost 0.66% and the French CAC 40 declined 0.75% while U.K. shares lost 0.54%.
Commodities were mostly higher overnight on the back of the stronger than expected Manufacturing PMI's and also as the dollar weakened. WTI crude futures were flat at $91.97 per barrel and Brent crude futures rose 0.16% to $100.15 per barrel. Copper futures gained 1.35% to $333.70 per pound. Gold was higher and silver futures rose 0.66% to $22.39 per ounce.
Currency markets saw some interesting moves overnight as the dollar weakened and the yens strengthened. The EUR/USD was higher at 1.3024 and the dollar fell against the yen to 100.34. Overall, the Dollar Index fell 0.34% on weakness against the pound, the euro, and the yen. Notably, the pound gained 0.44% against the dollar to 1.5265 and the Aussie dollar saw particular strength as it rose against the yen by 0.66% to 96.7610 and against the greenback by 0.75% to 0.9643.
Earnings reported Friday
Key companies that reported earnings Friday include:
Genesco (GCO) reported first quarter earnings per share of $0.94 vs. $0.87 expected on revenue of $591.4 million vs. $605.71 million expected.
Stocks moving in the premarket included:
WPX Energy (WPX) shares declined 1.3% premarket as natural gas prices eased in early trading.
Boeing (BA) shares rose 0.59% premarket after the company announced over the weekend that it has begun final assembly on the first 787-9 Dreamliner, the latest version of the plane, ahead of schedule.
Carnival Corporation (CCL) shares declined 0.82% premarket after a slew of downgrades last week and on fears over the safety of the cruise industry as a whole following a series of disasters.
Notable companies expected to report earnings Monday include:
ABM Industries (ABM) is expected to report second quarter EPS of $0.33 vs. $0.30 a year ago.
Cracker Barrel (CBRL) is expected to report third quarter EPS of $0.94 vs. $0.86 a year ago.
SAIC (SAI) is expected to report first quarter EPS of $0.26 vs. $0.35 a year ago.
Verint Systems (VRNT) is expected to report first quarter EPS of $0.52 vs. $0.53 a year ago.
On the economics calendar Monday, the Markit manufacturing PMI is due out as well as the ISM manufacturing index and construction spending data. In addition, San Francisco Federal Reserve President John Williams is set to speak and the Treasury is set to hold its weekly three- and six-month bill auctions. Overnight, the Reserve Bank of Australia's rate decision is due out and the British construction PMI is expected.
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Consumers are very status conscious in Asia, Africa and other emerging-market areas. This is especially true in China.
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