Futures edge lower despite Asian gains
US markets to dip at the open on continued Cyprus fears and eurozone concerns.
U.S. equity futures edged slightly lower in early premarket trade despite gains in Asia and as energy futures retreated from range highs touched Tuesday. Also, weak economic data from Europe as well as post-Cyprus fears weighed on markets.
In other news, British fourth quarter GDP fell 0.3%, in line with estimates, marking an official triple-dip recession for the U.K. France's fourth quarter GDP also fell 0.3%, also in line with estimates.
The Bank of Japan will step up its easing efforts in April by increasing the size of its asset purchase program, according to reports. Also, Governor Kuroda spoke saying that the BOJ wants to abolish the bank-note rule, which would allow the BOJ to own more bonds than the amount of bank notes in circulation (the Federal Reserve, for example, has no such rule).
Cypriot finance minister Michael Sarris said that uninsured depositors in Popular Bank of Cyprus (also known as Laiki Bank) will not be paid out for six or seven years and will likely lose around 80% of uninsured assets.
S&P 500 futures were slightly lower at 1,556.00.
The EUR/USD was lower at 1.2805.
Spanish 10-year government bond yields rose 0.05% to 4.99%.
Italian 10-year government bond yields 10 basis points to 4.68%.
Gold fell 0.11% to $1,595.60.
Asian shares were higher overnight following gains in the U.S. The Japanese Nikkei Index rose 0.18% and the Shanghai Composite Index gained 0.16% while the Hang Seng Index rose 0.69%. Also, the Korean Kospi gained 0.49% and Australian shares added 0.9%.
European shares were mostly lower in early trade on some weak economic data. The Spanish Ibex Index fell 1.28%, confirming a recent technical breakdown in Spanish stocks, and the Italian FTSE MIB Index declined 0.66%. Meanwhile, the German DAX declined 0.24% and the French CAC slid 0.57% while U.K. shares gained slightly by 0.06%.
Commodities were slightly weaker overnight as weak European economic data sent futures lower from recent highs, especially in oil. WTI crude futures declined 0.36% to $95.99 per barrel and Brent crude futures fell 0.09% to $109.26 per barrel. Copper futures rose 0.07% to $344.50 per pound despite global inventories hitting a three-year high and hedge funds becoming the most bearish ever on copper. Gold was lower and silver futures fell 1.32% to $28.30 per ounce.
Currency markets saw significant euro weakness overnight following growth fears as well as continued fears following the Cyprus bailout. The EUR/USD was lower at 1.2805 and the dollar rose against the yen to 94.52. Overall, the Dollar Index rose 0.22% on strength against the euro, the pound, the Swiss franc, the yen, and the Canadian dollar.
Stocks moving in the premarket included:
LogMeIn (LOGM) shares fell 2.96% premarket after winning a patent lawsuit.
SAIC (SAI) shares rose 4.21% following stronger than expected earnings and a newly declared $1 per share dividend.
J.C. Penney (JCP) shares fell 0.2% premarket as the company announced that a third key marketing executive has left the company.
Deutsche Bank (DB) shares declined 0.82% premarket as S&P placed the bank on ratings watch negative.
Notable companies expected to report earnings Wednesday include:
Paychex (PAYX) is expected to report third quarter earnings per share of $0.39 vs. $0.37 a year ago.
Progress Software (PRGS) is expected to report first quarter earnings per share of $0.24 vs. $0.28 a year ago.
PVH (PVH) is expected to report fourth quarter earnings per share of $1.50 vs. $1.18 a year ago.
Red Hat (RHT) is expected to report fourth quarter earnings per share of $0.30 vs. $0.29 a year ago.
Texas Industries (TXI) is expected to report a third quarter loss of $0.41 per share vs. a loss of $0.87 per share a year ago.
Verint Systems (VRNT) is expected to report fourth quarter earnings per share of $0.75 vs. $0.75 a year ago.
On the economics calendar Wednesday, MBA mortgage applications and Canadian CPI are due out as well as pending home sales. Also, Chicago Fed President Charles Evans is set to speak and the Treasury is set to auction five-year notes. Overnight, German retail sales and employment data as well as eurozone retail data should move markets.
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