Futures higher on budget talks
Asian, European shares rise on hopes congressional leaders would reach a deal to avoid the fiscal cliff.
U.S. equity futures rose early Thursday as congressional leaders continue their efforts to find a way to avoid the fiscal cliff. On Thursday, leaders will meet with Treasury Secretary Timothy Geithner and other White House representatives to continue budgetary talks.
In other news, the number of unemployed Germans increased by 5,000 in November, slower than the rate expected by economists of 15,000 but still the eighth consecutive monthly increase.
Italy raised 5.982 billion euros at auction this morning, issuing five- and ten-year bonds with yields staying low. Ten-year bond yields fell in the secondary market to the lowest level since early 2011 following the strong auction.
Barclays (BCS) sees a copper shortage extending into the first half of 2011 as Chinese growth accelerates and production remains low.
- S&P 500 futures rose 7.9 points to 1,415.00.
- The EUR/USD was higher at 1.2989.
- Spanish 10-year government bond yields fell to 5.247%.
- Italian 10-year government bond yields 4.51%.
- Gold rose 0.47% to $1,726.60.
Asian shares were mostly higher overnight on hopes that U.S. leaders could reach a budget deal. The Japanese Nikkei Index rose 0.99% while the Shanghai Composite Index fell 0.51% and the Hang Seng Index rose 0.99%. Also, the Korean Kospi rose 1.15% and Australian shares rose 0.68%.
European shares were higher overnight buoyed by the positive comments from Washington and the strong Italian auction driving down yields. The Spanish Ibex Index rose 1.17% and the Italian MIB Index rose 1.7%. Meanwhile, the German DAX rose 0.78% and the French CAC 40 rose 1.11% while U.K. shares gained 0.89%.
Commodities were stronger overnight on the positive sentiment emanating from Washington. WTI crude futures rose 1.13% to $87.46 per barrel and Brent crude futures rose 0.89% to $110.49 per barrel. Copper futures 0.76% to $356.45 per ounce on the Barclays report. Gold was higher and silver futures rose 0.28% to $33.87 per ounce.
Currency markets showed broad euro strength in early trade following the Italian auction and the better than expected German unemployment data. The EUR/USD was higher at 1.2989 and the dollar rose against the yen to 82.09. Overall, the Dollar Index fell 0.29% to 80.11 on weakness against the euro, the Swedish krone, and the Swiss franc. The Aussie dollar was broadly weaker and the Swiss franc and Swedish krone both were stronger after the respective countries reported better than expected GDP data.
- Aeropostale (ARO) shares fell 7.58% premarket after it reported disappointing earnings and lowered guidance.
- Disney (DIS) shares rose 0.85% premarket as the company hiked its dividend from $0.60 to $0.75 per share.
- Groupon (GRPN) shares fell 1.13% premarket following an 11.62% gain Wednesday after founder Andrew Mason defended the company in an interview.
- Tiffany (TIF) shares rose 0.82% premarket ahead of its earnings release.
- Barnes and Noble (BKS) is expected to report a second quarter loss of $0.11 per share vs. a loss of $0.17 per share a year ago.
- Kroger (KR) is expected to report third quarter earnings per share of $0.43 vs. $0.33 a year ago.
- Tiffany (TIF) is expected to report third quarter earnings per share $0.63 vs. $0.70 a year ago.
- Zumiez (ZUMZ) is expected to report third quarter earnings per share of $0.48 vs. $0.45 a year ago.
On the economics calendar Thursday, a lot of economic data is set to be released throughout the day. Chain store sales are expected as well as third quarter GDP data, jobless claims, and corporate profits. Later, pending home sales, the EIA natural gas report, and the Kansas City Fed manufacturing index are all expected. In addition, Richard Fisher of the Dallas Fed is set to speak and the Treasury is set to auction seven-year notes.
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