Futures slip on earnings, ahead of Fed meeting
Markets are set for a lower start following mixed quarterly results on Monday and ahead of results from Amazon, Corning and Ford.
In other news, Spanish retail sales in December fell 10.7% from the same period a year ago, worse than the prior reading of -7.8% and below forecasts of a decline of 8.9%.
China's top economic think tank, the Chinese Academy of Social Sciences, lifted its 2013 growth forecast to 8.4% from 8.2% noting that first half growth should be stronger than the second half.
Moody's downgraded six Canadian banks Monday, including Bank of Montreal (BMO) and Toronto Dominion (TD), citing a deteriorating housing market and high consumer debt levels.
- S&P 500 futures declined 1.4 points to 1,495.50.
- The EUR/USD was lower at 1.3442.
- Spanish 10-year government bond yields declined to 5.24%.
- Italian 10-year government bond yields rose to 4.221%.
- Gold rose 0.43% to $1,662.20 per ounce.
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Asian shares were mixed overnight led higher by Japanese and Chinese shares. The Japanese Nikkei Index rose 0.39% and the Shanghai Composite Index rose 0.53% while the Hang Seng Index declined 0.07%. Also, the Korean Kospi rose 0.84% and Australian shares rose 1.11%.
European shares were mostly lower in early trade, albeit slightly lower, following the weak Spanish retail data. The Spanish Ibex Index fell 0.25% and the Italian MIB Index declined 0.22%. Meanwhile, the German DAX declined 0.1% and the French CAC fell 0.26% while U.K. shares rose 0.14%.
Commodities were mixed overnight with energy futures lagging and metal futures leading. WTI crude futures were flat at $96.44 per barrel and Brent crude futures declined 0.27% to $113.17 per barrel. Copper futures were flat at $366.15 per pound despite strength in Australian and Chinese shares. Gold was higher and silver futures rose 0.81% to $31.03 per ounce.
Currency markets were mixed overnight with yen and euro crosses indicating a risk-off feel while the pound recouped some of its heavy losses from Monday and the Australian dollar rallied. The EUR/USD was lower at 1.3442, the GBP/USD was higher at 1.5724 after declining strongly on Monday, and the dollar fell against the yen to 90.50. Overall, the Dollar Index rose 0.02% on strength against the euro, the Swiss franc, and the Swedish krone. Also, the AUD/USD was higher at 1.0449, a gain of 0.3%.
Stocks moving in the premarket included:
- Yahoo (YHOO) shares rose 2.95% after the company reported earnings that beat analyst forecasts.
- Salesforce.com (CRM) shares declined 1.16% premarket after the company reported earnings.
- BMC Software (BMC) shares declined 7.15% premarket following the company's earnings report.
- Newmont Mining (NEM) shares rose 1% premarket as gold prices rallied strongly.
Notable companies expected to report earnings Tuesday include:
- Amazon (AMZN) is expected to report fourth quarter earnings per share of $0.28 vs. $0.38 a year ago.
- Corning (GLW) is expected to report fourth quarter EPS of $0.33 vs. $0.33 a year ago.
- EMC (EMC) is expected to report fourth quarter EPS of $0.52 vs. $0.49 a year ago.
- Ford (F) is expected to report fourth quarter EPS of $0.26 vs. $0.22
- Valero (VLO) is expected to report fourth quarter EPS of $1.17 vs. a loss of $0.21 per share a year ago.
- Pfizer (PFE) is expected to report fourth quarter EPS of $0.44 vs. $0.50 a year ago.
On the economics calendar Tuesday, the January FOMC meeting begins today and the Redbook is due out. Also, the S&P Case-Shiller home price index is due out and consumer confidence data is expected. In addition, the Treasury is set to auction four-week bills and five-year notes. Overnight, Spanish GDP is due out and Italian and German bond auctions are expected.
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