Futures slip on European data
Adding to concerns over the eurozone, Italian Prime Minister Mario Monti decides to resign.
U.S. equity futures slipped in premarket trading as mixed economic data with a slight positive bias was weighed down by fears over Europe's debt crisis. Positive industrial production and retail sales data in China were offset by weak trade data. Meanwhile, the return of former Prime Minister Silvio Berlusconi to Italian politics has created a new political crisis in the country and caretaker Prime Minister Mario Monti said he would not seek a new term amid the crisis.
In other news, leaders may be closer to a deal that would prevent the fiscal cliff than previously thought to a deal, as top Senate Republicans are seemingly giving up on their no tax-hikes pledge to reach a deal, but the House still remains divided.
Due to its recent success, Greece has extended the debt buyback offer that it launched last week in hopes of buying back more debt to aid its finances.
The Bank for International Settlements has warned economies around the world to be careful of sparking a new credit bubble with extended low rates. The warning comes as Central Banks are internally debating the exact effects of non-traditional policy on inflation.
- S&P 500 futures fell 4.5 points to 1,411.50.
- The EUR/USD was slightly higher at 1.2903.
- Spanish 10-year government bond yields rose to 5.648%.
- Italian 10-year government bond yields rose to 4.684%.
- Gold rose 0.28% to $1,710.28 per ounce.
Commodities were slightly stronger overnight, shrugging off much of the bad news emanating both from China and Europe and rising on hopes of a fiscal cliff deal. WTI crude futures rose 0.47% to $86.33 per barrel and Brent crude futures rose 0.74% to $107.81. Copper futures rose 1.11% to $370.75 per pound because, although the headline Chinese trade data was weak, metals imports remained strong, especially iron ore demand. Gold was higher and silver futures rose 0.69% to $33.36 per ounce.
Currency markets were in clear risk-off mode overnight as the yen reigned and the euro was little changed. The EUR/USD was basically flat at 1.2903 and the dollar fell against the yen to 82.16. Overall, the Dollar Index rose 0.05% to $80.451 on strength against the Swiss franc and the Swedish krone. Except for yen crosses, forex markets were pretty quiet overnight with moves limited. The AUD/JPY fell 0.28% to 86.09 and the EUR/JPY fell to 106.06.
Stocks moving in the premarket included:
- Freeport-McMoRan Copper & Gold (FCX) shares rose 0.91% premarket following its announcement last week of a massive $20 billion acquisitions of McMoRan Exploration (MMR) and Plains Exploration (PXP).
- United States Steel (X) shares fell 0.55% premarket as weak Chinese trade data overshadowed the subtly positive iron ore import data.
- Advanced Micro Devices (AMD) shares rose 0.42% premarket as the company has started to attract new bullish speculation, according to Schaeffer's Research.
- Bank of America (BAC) shares fell 0.7% premarket as financials as a sector traded lower.
Notable companies expected to report earnings Monday include:
- Stein Mart (SMRT) is expected to report a third quarter loss of $0.09 vs. a loss of $0.08 a year ago.
- Winnebago Industries (WGO) is expected to report first quarter earnings per share of $0.10 vs. $0.04 a year ago.
On the economics calendar Monday, the Treasury is set to auction three- and six-month bills. Overnight, French nonfarm Payrolls are due out and the German Zew economic survey is expected to be released.
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