Futures flat on bank of Japan stimulus

President Obama's second term inauguration and positive Japanese data keep indicate flat open Tuesday.

By Benzinga Jan 22, 2013 9:21AM
zurbar age fotostockU.S. equity futures were flat overnight despite new pledges by the Bank of Japan to adopt a 2% inflation target and print unlimited amounts of new money to reach this target. The move signals a bold stance by Japanese economic authorities that they are truly serious in devaluing the yen to restore competitiveness.

In other news, Deutsche Bank (DB) shares fell over 2% in German trading after the German banking regulator ordered the bank to simulate a breakup of the bank.

The German ZEW Economic Survey rose demonstrably to 31.5 in January from 6.9 in December, trumping economist forecasts of a reading of 12.0. The result is the highest reading since May of 2010 and signals new-found optimism on the health of the German and European economy.

President Obama, in his inauguration speech Monday, pledged new efforts on gun reform, taxes and immigration, hot-button issues that the President has vowed to address since his first campaign.
  • S&P 500 futures rose 1.6 points to 1,480.40.
  • The EUR/USD was higher at 1.3346.
  • Spanish 10-year government bond yields fell to 5.143%.
  • Italian 10-year government bond yields fell to 4.199%.
  • Gold rose 0.35% to $1,692.90.
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Asian markets
Asian shares were mixed overnight despite the positive developments from the Bank of Japan in its inflation stance. The Japanese Nikkei Index fell 0.35% and the Shanghai Composite Index fell 0.56% while the Hang Seng Index rose 0.29% in Hong Kong trading. Also, the Korean Kospi rose 0.49% and Australian shares rose 0.03%.

European markets
European shares were mostly lower but already began to recoup earlier losses in early Tuesday trade. The Spanish IBEX Index fell 0.35% and the Italian MIB Index rose 0.17%. Meanwhile, the German DAX fell 0.7%, weighed lower by financials, and the French CAC fell 0.29% while U.K. shares fell 0.05%.

Commodities
Commodities were mostly higher overnight led by energy as natural gas futures gained on the bitter cold weather that is striking the U.S. currently. WTI crude futures fell 0.05% to $95.51 per barrel and Brent Crude futures rose 0.33% to $112.08 per barrel while Natural Gas futures rose 2.02% to $3.64 per million BTU. Copper futures rose 0.31% to $369 per pound following the announcement of unlimited easing by the Bank of Japan. Gold was higher and silver futures rose 0.29% to $32.03 per ounce.

Currencies
Currency markets showed broad dollar weakness in overnight trade as the yen recouped some losses. The EUR/USD was higher at 1.3346 and the dollar fell against the yen by 0.95% to 88.75. Overall, the Dollar Index fell 0.31% on weakness against the euro, the yen, and every other currency used in calculating the index. Notably, the the EUR/JPY and the AUD/JPY also declined on broad yen strength despite the Aussie dollar gaining against the euro and the greenback.

Premarket movers
Stocks moving in the premarket included:
  • Caterpillar (CAT) shares fell 1.76% premarket because the company will be forced to take an $0.87 per share write down as the company discovered accounting fraud at a recently acquired company.
  • Boeing (BA) shares fell 1.25% premarket after the company has discovered that the recent 787 problems are results of a faulty batch of batteries, not a broad problem.
  • General Electric (GE) shares rose 0.57% premarket after analysts at Nomura maintained a Buy rating on the stock and kept the price target at $24.
  • Apple (AAPL) shares rose 0.65% premarket as the company is set to launch an online store in Indonesia.
Earnings
Notable companies expected to report earnings Tuesday include:
  • CSX Corp. (CSX) is expected to report fourth quarter earnings per share of $0.39 vs. $0.43% a year ago.
  • Delta Airlines (DAL) is expected to report fourth quarter EPS of $0.28 vs. $0.45 a year ago.
  • Freeport-McMoRan Copper & Gold (FCX) is expected to report fourth quarter EPS of $0.72 vs. $0.67 a year ago and should comment on its recent large acquisitions.
  • Google (GOOG) is expected to report fourth quarter EPS of $10.58 vs. $9.50 a year ago.
  • IBM (IBM) is expected to report fourth quarter EPS of $5.25 vs. $4.71 a year ago.
  • Johnson & Johnson (JNJ) is expected to report fourth quarter EPS of $1.17 vs. $1.13 a year ago.
  • Verizon Communications (VZ) is expected to report fourth quarter EPS of $0.52 vs. $0.52 a year ago.
Economics
On the economics calendar Tuesday, the Chicago Fed national activity index is due out as well as existing home sales and the Richmond Fed manufacturing index. Also, the Treasury is set to auction three- and six-month bills and European Central Bank President Mario Draghi is set to speak at 1 p.m. ET.

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2Comments
Jan 22, 2013 10:24AM
avatar
2nd verse, same as the first, go long stocks and hedge by shorting the Euro against the USD, don't chase the money and close out both positions by the end of the day.
Jan 22, 2013 9:54AM
avatar

Asia.....Mixed.

Europe....Down.

Gold....up a few bucks....$1693-1695..?

Silver steady....$32 and pennies

Oil..about $95..holding.

US...Flat, maybe within the +/- 50 range,on the DOW...?

 

 

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