Futures flat on France downgrade

Ratings agency Moody's also kept a negative outlook on the rating.

By Benzinga Nov 20, 2012 9:22AM

zurbar comstockU.S. equity futures were flat in premarket trading following Moody's downgrade of France by one notch to Aa1 from Aaa. Moody's also left the rating on negative watch, citing a worsening growth outlook for Europe's second largest economy. Moody's is the second of the three major ratings agencies to downgrade France after Standard & Poor's did in January. French 10-year government bond yields rose to 2.112%.

 

In other news, the Bank of Japan did not change interest rates and did not launch any new monetary policies at its meeting overnight, although it did mention a weakening economic outlook and declining Capex.


Intel (INTC) announced early Monday that CEO Paul Otellini is going to step down in May. The announcement was largely unexpected and investors await the appointment of a new CEO.


Spain sold 4.938 billion euros of 12- and 18-month bills, with yields relatively flat as compared to the previous auction and on strong demand.

  • S&P 500 futures were flat at 1,383.18.
  • The EUR/USD was flat at 1.2805
  • Spanish 10-year government bond yields fell to 5.872%.
  • Italian 10-year government bond yields fell to 4.868%.
  • Gold fell 0.05% to $1,733.60 per ounce.

Commodities

Commodities were mostly lower overnight following Monday's large gains in commodities markets. WTI crude futures fell 0.43% to $88.90 per barrel and Brent crude futures fell 0.28% to $111.39 per barrel. Copper futures were lower by 0.25% to $352.75 despite the positive comments on mining from the RBA. Gold was slightly lower and silver futures fell 0.09% to $33.16 per ounce..

 

Currencies

Currency markets were relatively tepid overnight with major currencies not moving much save for the yen. The EUR/USD was flat at 1.2805 and the dollar fell against the yen to 81.25. Overall, the Dollar Index fell 0.06% to 80.82 on weakness against the yen and the pound.

 

Premarket movers

  • Apple (AAPL) shares rose 0.37% in the premarket following a massive 7.21% gain Monday.
  • Cliffs Natural Resources (CLF) fell 3.66% following significant revisions to the company's earnings.
  • Credit Suisse (CS) shares fell 2.6% in Swiss trading as the bank announced a restructuring of its investment bank and private bank.
  • Verizon (VZ) shares rose 0.33% following a 3.41% gain Monday as investors bought the stock as its yield rose above 5% briefly.

 

Earnings

  • Best Buy (BBY) is expected to report second quarter earnings per share of $0.12 vs. $0.47 a year ago.
  • Campbell's Soup (CPB) is expected to report first quarter earnings per share of $0.85 vs. $0.82 a year ago.
  • Diana Shipping (DSX) is expected to report third quarter earnings per share of $0.14 vs. $0.33 a year ago.
  • Hewlett-Packard (HPQ) is expected to report fourth quarter earnings per share of $1.14 vs. $1.17 a year ago.
  • H.J. Heinz and Co. (HNZ) is expected to report second quarter earnings per share of $0.88 vs. $0.81 a year ago.
  • Salesforce.com (CRM) is expected to report third quarter earnings per share of $0.32 vs. $0.34 a year ago.

 

Economics

On the economics calendar Tuesday, housing starts and building permits data are due out. In addition, Federal Reserve's President Jeffrey Lacker is set to speak at 9:00 a.m. ET and Chairman Ben Bernanke is set to speak at noon.


The Treasury is set to auction four-week bills. Overnight, trade balance data from both Japan and Spain are due out and the Bank of England's Monetary Policy Committee is set to release its minutes, which could hint at further easing in the future.

 

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