Futures climb on global stimulus hopes
Markets are set for a higher open as investors await more earnings, data.
U.S. equity futures rose in premarket trade as investors became increasingly hopeful of more global easing following weaker than expected economic data around the world. Also, Goldman Sachs upgraded global equities to overweight from neutral, saying investors should hold an overweight position in equities for the next three months.
In other news, the German IFO Business Climate index for April declined to 104.4 in April from 106.7 in March on expectations of a reading of 106.2. The chief economist at the IFO said that he does not expect a European Central Bank rate cut next week and sees more growth in the second quarter than in the first.
Apple (AAPL) reported fiscal second quarter results that were largely in line with expectations. The company announced an additional $50 billion stock buyback, increasing the total program to $60 billion. Apple is also selling debt to fund a higher dividend and the buyback and was downgraded slightly overnight by ratings agencies due to this new debt.
Twitter is reeling from a massive hack Tuesday when hackers broke into the Associated Press Twitter account and posted a fake tweet that bombs had gone off and injured President Barack Obama. Markets shuddered but quickly recouped losses on news of the hack.
S&P 500 futures rose 3.8 points to 1,577.40.
The EUR/USD was higher at 1.3018.
Spanish 10-year government bond yields declined to 4.26% from 4.27%.
Italian 10-year government bond yields fell to 3.94% from 3.95%.
Gold rose 1.17% to $1,425.30 per ounce.
Asian shares were higher overnight as the yen weakened and also on the Goldman call, boosting Japanese equities. The Japanese Nikkei Index rose 2.32% and the Shanghai Composite Index bounced back by 1.55% while the Hang Seng Index added 1.73%. Also, the Korean Kospi gained 0.87% and Australian shares rose 1.72% despite weaker than expected inflation data.
European shares were mostly higher overnight save for Italian equities on hopes of an ECB rate cut next week. Credit Suisse, UBS, Barclays and Commerzbank all recently updated forecasts and expect a rate cut next week now. The Spanish Ibex Index rose 1.03% as the Italian FTSE MIB Index declined 0.4%. Meanwhile, the German DAX rose 0.39% while the French CAC rose 0.64% and U.K. shares gained 0.28%.
Commodities were higher overnight as risk appetite improved on hopes of further central bank stimulus and increased equity risk appetite. WTI crude futures rose 0.78% to $89.88 per barrel and Brent crude futures gained 0.73% to $101.04 per barrel. Copper futures added 1.87% to $316.20 per pound on hopes of a rebound in the Chinese economy. Gold was higher and silver futures gained 0.72% to $23.03 per ounce.
Currency markets were rather quiet overnight as the yen continued to slide and the euro ticked higher. The EUR/USD was higher at 1.3018 and the dollar rose against the yen to 99.58. Overall, the Dollar Index fell 0.13% on weakness against the euro, the pound, and the Swedish krona.
Earnings reported Tuesday
Key companies that reported earnings Tuesday include:
Apple (AAPL) reported fiscal second quarter earnings per share of $10.09 vs. $10.07 expected on revenue of $43.6 billion vs. $42.6 billion. The company also boosted its dividend to $3.05 per share and increased the stock buyback by $50 billion to $60 billion but cut guidance for both revenue and margins, noting a higher amount of iPad sales than expected is hurting margins.
Amgen (AMGN) reported first quarter earnings per share of $1.96 vs. $1.84 on revenue of $4.24 billion vs. $4.37 billion expected.
Broadcom (BRCM) reported first quarter earnings per share of $0.65 vs. $0.56 expected on revenue of $2.01 billion vs. $1.91 billion expected.
Coach (COH) reported first quarter earnings per share of $0.84 vs. $0.81 expected on revenue of $1.19 billion vs. $1.18 billion expected.
Cree Inc. (CREE) reported third quarter earnings per share of $0.19 vs. $0.34 expected on revenue of $105.2 million vs. $104.0 million expected.
Delta Air Lines (DAL) reported first quarter earnings per share of $0.10 vs. $0.06 a year ago on revenue of $8.5 billion vs. $8.51 billion expected.
Lockheed Martin (LMT) reported first quarter earnings per share of $2.33 vs. $2.03 expected on revenue of $11.07 billion vs. $10.31 billion expected.
Norfolk Southern (NSC) reported first quarter earnings per share of $1.22 vs. $1.15 on revenue of $2.74 billion vs. $2.76 billion expected.
AT&T (T) reported first quarter earnings per share of $0.64 vs. $0.64 on revenue of $31.4 billion vs. $31.75 billion expected.
Yum Brands (YUM) reported first quarter earnings per share of $0.70 vs. $0.57 on revenue of $2.54 billion vs. $3.03 billion expected.
Stocks moving in the premarket included:
Yum Brands (YUM) shares rose 4.46% premarket after reporting stronger than expected earnings.
Amgen (AMGN) shares fell 6.21% premarket following weaker than expected revenue.
Newmont Mining (NEM) shares rose 1.11% premarket as metals prices rose.
Notable companies expected to report earnings Wednesday include:
Boeing (BA) is expected to report first quarter earnings per share of $1.47 vs. $1.22 a year ago.
Ford Motor (F) is expected to report first quarter earnings per share of $0.39 vs. $0.39 a year ago.
Hess (HES) is expected to report first quarter earnings per share of $1.59 vs. $1.50 a year ago.
NASDAQ OMX Group (NDAQ) is expected to report first quarter earnings per share of $0.62 vs. $0.61 a year ago.
Qualcomm (QCOM) is expected to report second quarter earnings per share of $1.16 vs. $1.01 a year ago.
Procter & Gamble (PG) is expected to report third quarter earnings per share of $0.96 vs. $0.94 a year ago.
Zynga (ZNGA) is expected to report a first quarter loss of $0.04 per share vs. earnings per share of $0.06 a year ago.
On the economics calendar Wednesday, MBA purchase applications and the durable goods report are expected, as well as a five-year note auction from the Treasury. Overnight, the Spanish unemployment rate and the latest look at British GDP are expected to be released.
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