Futures rise as UK economy exits recession
The Bank of Japan may launch a new round of easing, while the Greek Parliament is in turmoil on conflicting reports regarding the country's bailout.
U.S. equity futures rose in early Thursday trading as data confirmed the U.K. economy has exited recession in the third quarter, due in large part to the Olympic boost. The British economy grew 1.0% in the third quarter from the second quarter, well above economist estimates of 0.6%.
Meanwhile, the Greek Parliament is in sheer chaos this morning, as confusion and conflicting reports surrounding the agreement to extend Greece's bailout program by two years has hurt the credibility of finance minister Stournaras within the Parliament.
Tokyo reported overnight that the Bank of Japan is set to launch a new round of easing of approximately 10 trillion yen, or $125 billion.
Eurogroup finance ministers will meet beginning Thursday through Tuesday to finalize the terms of the spending cuts in Greece and hopefully will release the next bailout tranche then.
Other top news
- M2 money supply in the eurozone rose 2.7% in September, below expectations of a 3.0% rise as loan growth to the private sector fell 0.8% in the month on expectations of a 0.6% drop.
- S&P 500 futures rose 9.1 points to 1,414,40.
- The EUR/USD was higher at 1.3015.
- Spanish 10-year government bond yields fell to 5.538%.
- Italian 10-year government bond yields fell to 4.802%.
- Gold rose 0.85% to $1,716.10.
See more of Benzinga's market news here.
Commodities
Commodities were stronger in early Thursday trade, as oil futures attempted to rally off of three-month lows. WTI Crude futures rose 0.86% to $86.47 per barrel and Brent Crude futures rose 0.77% to $108.68 per barrel. Copper futures rose 0.21% in overnight trade as relaxed fears over Chinese growth and positive signs from Australia's economy boosted prices. Gold was higher and silver futures rose 1.79% to $32.185 per ounce.
Currencies
Currency markets showed broad dollar weakness in overnight trade, showing a clear risk-on sentiment. The EUR/USD was higher and the dollar gained against the yen to cross above the 80 level. Overall, the Dollar Index fell 0.21% on weakness against the euro, the pound following the GDP data, and the Canadian dollar. The pound was stronger across the board following the data release and the Aussie dollar was fairly strong as well.
Premarket movers
- Honeywell (HON) shares rose 1.2% in the premarket as Morgan Stanley (MS) increased its price target on the company to $70.
- Hewlett-Packard (HPQ) shares rose 0.85% in the premarket as the company announced new long-term growth plans.
- Abercrombie & Fitch (ANF) shares fell 1.4% premarket after earnings missed estimates and the company cut guidance.
Earnings
- Amazon (AMZN) is expected to report third quarter loss of $0.08 per share vs. a profit of $0.14 per share a year ago.
- ConocoPhillips (COP) is expected to report third quarter earnings per share of $1.19 vs. $2.52 a year ago.
- Jetblue (JBLU) is expected to report third quarter earnings per share of $0.13 vs. $0.12 a year ago.
- Occidental Petroleum (OXY) is expected to report third quarter earnings per share of $1.65 vs. $2.18 a year ago.
- Potash Corp. (POT) is expected to report third quarter earnings per share of $0.78 vs. $0.94 a year ago.
- Procter and Gamble (PG) is expected to report first quarter earnings per share of $0.96 vs. $1.03 a year ago.
Economics
On the economic calendar Thursday, weekly jobless claims are due out along with durable goods orders. Also, regional economic data will be released in the form of the Chicago Fed National Activity Index and the Kansas City Fed Manufacturing Index. Lastly, pending home sales and the EIA Natural Gas reports are due out.
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He suggests that our problems evolve from;
1. A CONgress which is not able or willing to face and resolve the crisis.
2. Political ineptitude which sacrifices our fiscal rating for political entrenchment.
3. The fact that the agencies are indeed rating us on items that... " addresses the "recent decline in the effectiveness, stability, and predictability of its policy making and political institutions, particularly regarding the direction of fiscal policy."
4. All leading us to business and individual (tax) uncertainties.
5. If CONgress ignores the risks and..." Congress and the White House take no action, the cliff will result in a fiscal body blow totaling $720 billion, which is worth nearly 5% of gross domestic product. (The numbers, and some options laid out by Merrill Lynch experts, are shown in the chart below.) This includes a $120 billion hit as the payroll tax cuts -- which started in 2009 as the Making Work Pay tax credit -- expire; $110 billion in budget cuts known as "sequestration" tied to the super committee's failure, which will hit the Pentagon hard; and $200 billion in tax increases as the Bush tax cuts expire and Obama care taxes on the wealthy kick in."
6. This will deplete the gains made under the Obama Administration. Come to think of it, this has been the Rep/ TP plan all along. Sacrifice our gains to make ROMBOT the new leader.
Not very far sighted.
7. M says, "With the economy now managing to grow at only a 1.3% annual pace -- despite massive and repeated doses of cheap-money, dollar-weakening, inflation-priming stimulus from the Fed -- you don't have to be an economist to realize this would raise the threat of recession and start unwinding hard-won progress in the job and housing markets."
Compounded by problems in Europe (a direct outflow from austerity) and China (the probable
"hard landing") this depletion of public funding through the treachery of our current legislature
will not serve to move GDP higher, but turn it negative in one full turn.
SO Yes, a Grand idea, MG...Lets destroy the progress we made, climbing that hill as our hero did in the Myth of Sisyphus, only to have it upended by political myopia, conservative dimwittedness and some angry birds. That will show them!
MG: And yet they have deeper deficits..
http ://www .bloomberg.com/news/2012-09-21/u-k-posts-record-august-deficit-as-slump-hits-tax-revenue-1-. html
I wonder if they're going to continue to have growth when they don't have representatives from the world coming by for the Olympics...
Of course 1% annualized growth for the quarter would be evidence of failed policies in your eyes.. right?
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