Futures lower ahead of ahead of jobs data

With a lower outlook out of the EU, investors now await nonfarm payroll report.

By Benzinga May 3, 2013 8:15AM

stock market zurbar age fotostockBy Matthew Kanterman


U.S. equity futures were lower in early premarket trade ahead of the nonfarm payrolls report for April and following the EU Commission cutting its growth forecasts.


Economists surveyed by Bloomberg are expecting nonfarm payrolls rose by 153,000 jobs last month, with the range of estimates wide between 100,000 and 200,000 jobs. The private sector is expected to have added 175,000 jobs, and the unemployment rate is expected to remain flat at 7.6%.


Earlier, the European Commission has released its revised growth forecasts for 2013 and 2014. It now expects the eurozone to contract 0.4% this year before expanding 1.2% next year. Notably, France, Italy and Spain are all expected to contract this year before returning to growth in 2014. France and Spain will also miss deficit targets this year.


European Central Bank President Mario Draghi announced new easing measures Thursday, including a 25 basis point cut to the main refi rate to 0.5% as well as a 50 basis point cut to the marginal lending rate to 1.00%. Also, Draghi announced that the bank will extend its overnight lending program to banks by a full year through 2014 and would consider negative deposit rates should the economy worsen.


China's official services PMI dropped to 54.5 in April from 55.6 in March. However, the British services PMI rose unexpectedly to 52.9 from 52.4 in March on expectations of a flat reading.


The Bank of Canada announced that Stephen Poloz has been named the new central bank chief. He is currently the head of a government finance agency responsible for export controls and has usurped the likely favorite Tim Macklem for the post.

  • S&P 500 futures fell 2.1 points to 1,590.20.

  • The EUR/USD was higher at 1.3121 after plummeting post-Draghi Thursday.

  • Spanish 10-year government bond yields fell 5 basis points to 4.01%.

  • Italian 10-year government bond yields fell 3 basis points to 3.73%.

  • Gold rose 0.57% to $1,476.00 per ounce.

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Asian markets

Asian shares were mostly higher overnight as Chinese shares rallied following the ECB easing efforts because the eurozone is China's largest trade partner. Japanese markets were closed for a holiday. The Shanghai Composite Index rose 1.45% and the CSI 300 Index rose 1.77% while the Hang Seng Index gained 0.1%. Also, the Korean Kospi rose 0.43% and Australian shares were flat.


European markets

European shares were mixed following the revised EC growth forecasts. The Spanish Ibex Index rose 0.29% and the FTSE MIB Index fell 0.31%. Meanwhile, the German DAX gained 0.07% and the French CAC 40 fell 0.17% while U.K. shares rose 0.08%.


Commodities

Commodities were mixed as energy futures lagged and metals rose. WTI crude futures fell 0.28% to $93.73 per barrel and Brent crude futures fell 0.31% to $102.53 per barrel. Copper futures rallied sharply by 2.72% to $318.90 per pound on easing efforts globally. Gold was higher and silver futures rose 0.94% to $24.06.


Currencies

Currency markets were on the move overnight ahead of the Non-Farm Payrolls report with the euro bouncing post-Draghi and the yen sliding despite Japanese markets being closed overnight. The EUR/USD was higher at 1.3121 and the dollar rose against the yen to 98.17. Overall, the Dollar Index fell 0.26% on weakness against the euro, the yen, and the Swiss franc.


Earnings reported Thursday

Key companies that reported earnings Thursday include:

  • American International Group (AIG) reported first quarter earnings per share of $1.34 vs. $0.87 expected.

  • Fortress Investment Group (FIG) reported first quarter earnings per share of $0.05 vs. $0.15 on revenue of $244.0 million vs. $218.79 million expected.

  • General Motors (GM) reported first quarter earnings per share of $0.67 vs. $0.54 on revenue of $36.9 billion vs. $36.0 billion expected.

  • Kraft Foods (KRFT) reported first quarter earnings per share of $0.76 vs. $0.64 on revenue of 4.5 billion vs. $4.49 billion expected.

  • LinkedIn (LNKD) reported first quarter earnings per share of $0.45 vs. $0.31 on revenue of $324.7 million vs. $317.08 million and lowered guidance.

  • Teva Pharmaceuticals (TEVA) reported first quarter earnings per share of $1.11 vs. $1.10 on revenue of $4.9 billion vs. $4.85 billion expected.

Premarket movers

Stocks moving in the premarket included:

  • American International Group (AIG) shares rose 2.78% premarket following its stronger than expected earnings report.

  • Freeport-McMoRan Copper and Gold (FCX) shares rallied 0.69% premarket on stronger copper prices.

  • LinkedIn (LNKD) shares declined 9.98% premarket following the company's lowered guidance.

  • Kraft (KRFT) shares rose 1.98% premarket following the stronger than expected earnings report.

Earnings

Notable companies expected to report earnings Friday include:

  • CBOE Holdings (CBOE) is expected to report first quarter earnings per share of $0.44 vs. $0.37 a year ago.

  • Duke Energy (DUK) is expected to report first quarter earnings per share of $1.04 vs. $1.14 a year ago.

  • Moody's Corporation (MCO) is expected to report first quarter earnings per share of $0.85 vs. $0.76 a year ago.

  • Madison Square Garden (MSG) is expected to report third quarter earnings per share of $0.33 vs. $0.40 a year ago.

Economics

On the economics calendar Friday, aside from the employment report, factory orders and the ISM nonmanufacturing index are set to be released as well as the ECRI weekly index. Also, the Federal Reserve's Daniel Tarullo and Jeffery Lacker are set to speak.


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