U.S. equity futures gained in early pre-market trade despite weak GDP data from China. China reported second quarter GDP grew 1.7 percent in the quarter, worse than the expected 1.8 percent growth rate. However, the annualized figure posted at 7.5 percent growth, in line with forecasts.
Top News
In other news around the markets:
- Other Chinese data released overnight included the industrial production, retail sales, and fixed asset investment reports. Industrial production and fixed asset investment both grew less than expected in June while retail sales outpaced expectations.
- Barclays issued a note overnight and now sees the Fed tapering asset purchases in September, which is in line with market expectations. They did note that they expect uncertainty over the Fed to continue to mount but note that rate hikes are still very far off on the horizon.
- After the close Friday, AT&T (T) announced its intention to acquire Leap Wireless (LEAP) for $15 per share in cash plus the proceeds of the sale of bandwidth in Chicago.
- S&P 500 futures gained 3.5 points to 1,673.80.
- The EUR/USD was lower at 1.3033.
- Spanish 10-year government bond yields rose 4 basis points to 4.82 percent.
- Italian 10-year government bond yields rose 4 basis points to 4.53 percent.
- Gold rose 0.25 percent to $1,280.80 per ounce.
Asian shares were higher overnight on the back of the China data despite Japanese markets being closed for a holiday. Chinese shares were higher as the Shanghai Composite Index rose 0.98 percent and the CSI 300 Index gained 1.4 percent while the Hang Seng Index in Hong Kong rose 0.12 percent. Also, the Korean Kospi gained 0.28 percent and Australian shares gained 0.15 percent.
European Markets
European shares were higher overnight on little news. The Spanish Ibex Index rose 0.12 percent and the Italian FTSE MIB Index gained 0.73 percent. Meanwhile, the German DAX rose 0.5 percent and the French CAC 40 Index gained 0.71 percent while U.K. shares added 0.68 percent.
Commodities
Commodities were mixed overnight as oil prices dropped. WTI Crude futures fell 0.24 percent to $105.70 per barrel and Brent Crude futures declined 0.02 percent to $108.79 per barrel. Copper futures fell 0.63 percent to $313.50. Gold was higher and silver futures were flat.
Currencies
Currency markets were on the move as dollar strength was seen nearly across the board. The EUR/USD was lower at 1.3033 and the dollar gained against the yen to 99.79. Overall, the Dollar Index rose 0.25 percent on strength against the yen, the Swiss franc, the pound, the euro, and the Canadian dollar.
Earnings Reported Yesterday
Key companies that reported earnings Friday include:
- Infosys (INFY) reported first quarter EPS of $0.73 vs. $0.70 a expected on revenue of $1.99 billion vs. $1.95 billion.
- J.P. Morgan Chase & Co. (JPM) reported adjusted second quarter EPS of $1.45, in line, on revenue of $25.12 billion vs. $25.73 billion expected.
- Wells Fargo (WFC) reported second quarter EPS of $0.98 vs. $0.93 on revenue of $21.4 billion vs. $21.16 billion.
- United Parcel Service (UPS) pre-reported second quarter EPS of $1.13 vs. $1.20 expected.
Stocks moving in the pre-market included:
- Leap Wireless (LEAP) shares gained 116.92 percent pre-market to $17.31 per share as the market tries to value the bandwidth that is to be sold to estimate the total takeover price.
- Citigroup (C) shares gained 0.33 percent heading into its earnings report after a positive mention in Barron's.
- Boeing (BA) shares gained 1.72 percent pre-market as markets believe that the Ethiopian Air incident that saw a 787 catch fire was most likely an accident and not the company's fault.
Notable companies expected to report earnings Monday include:
- Citigroup (C) is expected to report second quarter EPS of $1.18 vs. $1.00 a year ago on revenue of $19.79 billion vs. $18.64 billion a year ago.
- Gardner Denver (GDI) is expected to report second quarter EPS of $1.28 vs. $1.53 a year ago on revenue of $561.49 million vs. $613.01 million a year ago.
- Wynn Resorts (WYNN) is expected to report second quarter EPS of $1.58 vs. $1.38 a year ago on revenue of $1.34 billion vs. $1.25 billion a year ago.
On the economics calendar Monday, the monthly retail sales report and the Empire State Manufacturing Index are due out as well as the business inventories report. Also, the Treasury is set to hold the weekly auction of 3- and 6-month bills. Overnight, the RBA minutes and the German ZEW Economic Sentiment Index are expected to be released.
BY Matthew Kanterman