Futures slide on Asian weakness
In Japan, the Nikkei Index closed lower, breaking an eight-session winning streak that pushed the index to record breaking highs.
U.S. equity futures slid in early premarket trade after Asian shares reversed early gains to close lower. The Japanese Nikkei Index broke an eight-day winning streak to close lower after opening higher and raising hopes of a record nine-day winning streak.
In other news, Greece will need to lay out a plan to cut another 150,000 jobs by 2015 to receive its next bailout payment due next week of about 3.5 billion euros.
U.K. January industrial production fell 1.2%, well worse than forecasts of a 0.1% gain and also much worse than December's 1.1% gain. Manufacturing output also fell 1.5% in January on expectations of a flat reading.
Goldman Sachs Asset Management outgoing Chairman Jim O'Neill says that U.S. equities look expensive (read on CNBC) on a cyclically adjusted price-to-earnings ratio and that he fears the dreaded May top in equities.
- S&P 500 futures fell 1 point to 1,549.50.
- The EUR/USD was lower at 1.3012.
- Spanish 10-year government bond yields fell to 4.71% from 4.75%.
- Italian 10-year government bond yields fell to 4.6% from 4.65%.
- Gold rose 0.21% to $1,581.30 per ounce.
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Asian shares were lower overnight on weak economic data despite comments from incoming Bank of Japan Deputy Governor Kikuo Iwata that more easing is to come in the near future. The Japanese Nikkei Index fell 0.28% and the Shanghai Composite Index fell 1.04% while the Hang Seng Index fell 0.87%. Also, the Korean Kospi fell 0.5% and Australian shares declined 0.56%.
European shares were modestly higher in early trade despite some weak economic data from the U.K. as inflation in Germany and other core European nations remained low in February, signaling more room for the European Central Bank to ease policy further. The Spanish Ibex Index rose 0.5% and the Italian FTSE MIB Index rose 0.63%. Meanwhile, the German DAX rose 0.1% and the French CAC rose 0.01% while U.K. shares rose 0.03%.
Commodities were mixed overnight as energy futures fell and precious metals futures rose. WTI crude futures fell 0.21% to $91.87 per barrel and Brent crude futures fell 0.23% to $109.97 per barrel. Copper futures fell 0.2% to $351.00 per pound on the Asian weakness and weak U.K. data. Gold was higher and silver futures rose 0.21% to $28.92 per ounce.
Currency markets were in clear risk off mode as the dollar and the yen reigned and the euro and the pound slid. The EUR/USD was lower at 1.3012 and the dollar fell against the yen to 95.95. Overall, the Dollar Index rose 0.16% on strength against the euro, the pound, and the Canadian dollar. The GBP/USD fell 0.5% following the weak data to 1.4842, breaking through the 1.49 level, as the pound weakened broadly. Also, the yen was stronger against both the euro and the Aussie dollar.
Stocks moving in the premarket included:
- Yum Brands (YUM) shares rose 5.4% premarket after the company revised higher same store sales estimates for its Chinese operations in January and also reported data for February.
- Diamond Foods (DMND) shares fell 5.85% premarket after reporting worse than expected fiscal second quarter operations.
- Urban Outfitters (URBN) shares fell 2.29% premarket after reporting slightly worse than expected second quarter operations.
- VeriFone Systems (PAY) shares rose 7.58% after announcing that its CEO was stepping down following an approximately 63% slide in the stock price in the last 52-weeks.
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Notable companies expected to report earnings Tuesday include:
- Acadia Pharmaceuticals (ACAD) is expected to report a fourth quarter loss of $0.09 per share vs. a loss of $0.10 per share a year ago.
- Costco (COST) is expected to report second quarter earnings per share of $1.06 vs. $0.90 a year ago.
- Dole Foods (DOLE) is expected to report a fourth quarter loss of $0.02 per share vs. a loss of $0.02 per share a year ago.
- Embraer (ERJ) is expected to report fourth quarter earnings per share of $0.87 vs. a loss of $0.51 per share a year ago.
- JinkoSolar Holding (JKS) is expected to report a fourth quarter loss of $0.80 per share vs. a loss of $2.58 per share a year ago.
- XOMA Holdings (XOMA) is expected to report a fourth quarter loss of $0.26 per share vs. a loss of $0.34 per share a year ago.
On the economics calendar Tuesday, the NFIB small business optimism index is set to be released alongside chain store sales and the Redbook. The Treasury is also set to auction four-week and three-year notes and also issue its monthly budget statement. Overnight, French payrolls and eurozone industrial production data should move markets.
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