U.S. equity futures traded lower in pre-market trade following weak data out of China and Germany. However, European shares traded higher on hopes of an ECB rate cut.
Top News
In other news around the markets:
- The Flash Chinese HSBC Manufacturing PMI for April fell to 50.5 from 51.6 in March on expectations of a reading of 51.4.
- The German Manufacturing PMI slipped to 47.9 from 49.0 on expectations of a reading of 49.0 while the Services PMI declined to 49.2 from 50.9 on expectations of a reading of 51.
- S&P warned that Japan's new stimulus measures risk a 1/3 chance of a downgrade form its current AA- while Moody's warned that lower long-term rates risk downgrades for Japanese life insurers.
- S&P 500 futures fell 1.4 points to 1,554.50.
- The EUR/USD was lower at 1.2988.
- Spanish 10-year government bond yields declined to 4.43 percent from 4.49 percent.
- Italian 10-year government bond yields fell to 4.0 percent from 4.09 percent, the lowest since November 2010.
- Gold fell 0.35 percent to $1,416.20 per ounce.
Asian shares were lower overnight following weakness in China and yen strength. The Japanese Nikkei Index fell 0.29 percent and the Shanghai Composite Index lost 2.57 percent while the Hang Seng Index lost 1.08 percent. Also, the Korean Kospi declined 0.4 percent and Australian shares gained 1.00 percent on stronger leading indicators.
European Markets
European shares were higher in early trade on comments from ECB President Mario Draghi which hinted at an imminent rate cut. The Spanish Ibex Index rose 1.32 percent and the Italian FTSE MIB Index gained 1.01 percent. Meanwhile, the German DAX gained 0.48 percent and the French CAC 40 rose 1.47 percent while U.K. shares rose 0.81 percent.
Commodities
Commodities were lower overnight but rebounded from session lows following the weak global PMI data. WTI Crude futures declined 0.96 percent to $88.33 per barrel and Brent Crude futures lost 1.13 percent to $99.26 per barrel. Copper futures fell 1.45 percent to $309.85 per pound on Chinese weakness. Gold was lower and silver futures declined 2.39 percent to $22.82 per ounce.
Currencies
Currency markets were in flux overnight as the euro fell and the yen strengthened. The EUR/USD was lower at 1.2988 and the dollar fell against the yen to 98.68. Overall, the Dollar Index gained 0.34 percent on strength against the euro, the pound, the Swiss franc, and the Canadian dollar.
Earnings Reported Yesterday
Key companies that reported earnings Monday include:
- Caterpillar (CAT) reported first quarter EPS of $1.31 vs. $1.45 expected on revenue of $13.21 billion vs. $13.81 billion expected
- Halliburton (HAL) reported first quarter EPS of $0.67 vs. $0.57 expected on revenue of $6.97 billion vs. $6.88 billion expected.
- Netflix (NFLX) reported fourth quarter EPS of $0.31 vs. $0.18 expected on in line revenue.
- Rogers Communication (RCI) reported first quarter EPS of $0.80 vs. $0.75 on revenue of $1.76 billion vs $3.09 billion expected.
- Texas Instruments (TXN) reported first quarter EPS of $0.32 vs. $0.30 expected on revenue of $2.89 billion vs. $2.85 billion.
Stocks moving in the pre-market included:
- Netflix (NFLX) shares rose 22.76 percent pre-market following the strong earnings report, raised guidance, and new products.
- Facebook (FB) shares declined 0.82 percent pre-market as investors await the Timeline patent lawsuit decision.
- Bank of America (BAC) shares rose 1.37 percent pre-market despite insider selling reported Monday.
- Carnival Corporation (CCL) rose 0.42 percent pre-market despite a downgrade from Nomura Monday.
Notable companies expected to report earnings Tuesday include:
- Apple (AAPL) is expected to report second quarter EPS of $10.13 vs. $12.30 a year ago.
- Amgen (AMGN) is expected to report first quarter EPS of $1.84 vs. $1.61 a year ago.
- Cree Inc. (CREE) is expected to report third quarter EPS of $0.34 vs. $0.20 a year ago.
- Juniper Networks (JNPR) is expected to report first quarter EPS of $0.21 vs. $0.16 a year ago.
- Panera Bread (PNRA) is expected to report first quarter EPS of $1.65 vs. $1.40 a year ago.
- Yum! Brands (YUM) is expected to report first quarter EPS of $0.57 vs. $0.67 a year ago.
On the economics calendar Tuesday, the Redbook is due out followed by the U.S. Flash PMI, the FHFA Home Price Index, New Home Sales, and the Richmond Fed Manufacturing Index. Also, the Treasury is set to auction 4-week bills and 2-year notes. Overnight, the RBNZ rate decision is expected as well as the German IFO Business Climate Index.
BY Matthew Kanterman