Futures higher on strong European services data
US stocks are set to track global markets up ahead of US service sector data.
U.S. equity futures rallied in early premarket trade following stronger than expected non-manufacturing PMI data from the eurozone and the U.K.
The eurozone services PMI rose to 47.9 in February from 47.3 in January, topping expectations of a flat reading month-over-month. Also, the U.K. non-manufacutring PMI rose to 51.8 from 51.5 in January, beating expectations of a reading of 51.
In other news, the Reserve Bank of Australia kept rates on hold at 3.00%. The accompanying statement was slightly more optimistic on the global economy despite recent poor Chinese data. The Bank said there is room for more accommodative policy.
European regulators issued a statement overnight indicating that Spain's bank reform plan is on track so far, and that the Bad Bank plan is working.
The China HSBC services PMI confirmed the official non-manufacturing PMI released over the weekend by falling to 52.1 in February from 54 in January. However, it is yet to be seen if this slowdown i growth is due to transitory effects emanating from the Lunar New Year Holiday.
- S&P 500 futures rose 3.60 points to 1,529.30.
- The EUR/USD was higher at 1.3043.
- Spanish 10-year government bond yields fell to 5.06%.
- Italian 10-year government bond yields fell to 4.77%.
- Gold rose 0.53% to $1,580.80 per ounce.
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Asian shares were higher in overnight trade following large losses Monday. The Japanese Nikkei Index rose 0.27% and the Shanghai Composite Index rose 2.33% while the Hang Seng Index gained 0.1%. Also, the Korean Kospi rose 0.17% and Australian shares rallied 1.29% following the RBA rate decision.
European shares were higher following the stronger than expected services PMI data. The Spanish Ibex Index rose 1.19% and the Italian FTSE MIB Index gained 1.86%. Meanwhile, the German DAX rose 1.67% and the French CAC gained 1.38% and U.K. shares added 0.73%.
Commodities were stronger overnight after oil touched a new 2013 low Monday. WTI crude futures rose 0.31% to $90.41 per barrel and Brent crude futures rose 0.57% to $110.72 per barrel. Copper futures rose 0.63% to $352.40 following the RBA decision. Gold was higher and silver futures gained 1.35% to $28.88 per ounce.
Currency markets showed broad sterling strength overnight as the yen strengthened as well. The EUR/USD was higher at 1.3043 and the dollar fell against the yen to 93.13 while the pound rose to 1.5168 against the dollar. Overall, the Dollar Index fell 0.2% on weakness against the pound, the yen, and the euro.
Stocks moving in the premarket included:
- Marathon Petroleum (MPC) shares rose 0.12% premarket after the stock climbed 5.62% Monday to a new all-time high. The stock has more than doubled in the last 52-weeks.
- United States Steel (X) shares rose 1.25% premarket on bullish options market activity.
- Berkshire Hathaway (BRK.A) (BRK.B) rose 0.93% premarket as Warren Buffett has indicated that he is "on the hunt for more elephants."
- J.C. Penney (JCP) shares fell 1.43% premarket on reports that a large shareholder is set to sell a 10 million share block.
Notable companies expected to report earnings Tuesday include:
- Checkpoint Systems (CHP) is expected to report fourth quarter earnings per share of $0.17 vs. a loss of $0.10 per share a year ago.
- Qihoo 360 Technology (QIHU) is expected to report fourth quarter earnings per share of $0.17 vs. $0.20 a year ago.
- Smith and Wesson Holding (SWHC) is expected to report third quarter earnings per share of $0.23 vs. $0.07 a year ago.
On the economics calendar Tuesday, chain store sales and the Redbook are due out followed by the ISM non-manufacturing index, the first major indicator ahead of Friday's payrolls report. Also, the Treasury is set to auction four- and 52-week bills and the Fed's Jeffrey Lacker is set to speak.
Overnight, Australian and eurozone GDP data are due out. Also, a speech from Bank of England Governor Mervyn King as well as a German five-year bond auction should move markets.
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