U.S. equity futures traded lower in pre-market trade as the G20 nations condemned Japan's moves on the yen in favor of market determined exchange rates. Leaders from the 20 economies are looking for common ground to make a formal joint statement on Japan's moves but have yet to do so.
Top News
- Italy's trade surplus was smaller than expected in December at 2.16 billion euros vs. economist estimates of a surplus of 2.22 billion. Also, the European trade surplus rose to 12 billion euros in December, better than forecasts of a surplus of 10.7 billion euros.
- ECB President Mario Draghi spoke overnight saying that the exchange rate is not a policy tool but is rather a factor that goes into the price stability equation and that the fourth quarter GDP report Thursday was disappointingly weak.
- RBA Board member John Edwards believes that the Australian dollar is too high and is a risk to Australian growth going forwards. Australian authorities would like to see a weaker Aussie dollar to boost exports and fuel growth.
- S&P 500 futures fell 1.6 points to 1,516.90.
- The EUR/USD was lower at 1.3338.
- Spanish 10-year government bond yields fell to 5.19 percent.
- Italian 10-year government bond yields fell to 4.39 percent.
- Gold fell 0.48 percent to $1,627.80.
Asian shares were mixed overnight as weakness in Japan was offset by strength elsewhere. The Japanese Nikkei Index fell 1.18 percent and the Shanghai Composite Index rose 0.57 percent while the Hang Seng Index rose 0.13 percent. Also, the Korean Kospi Index rose 0.08 percent and Australian shares fell 0.06 percent.
European Markets
European shares were mixed and traded near flat in early trade ahead of the release of the official G20 statement. The Spanish Ibex Index fell 0.02 percent and the Italian FTSE MIB Index rose 0.14 percent. Meanwhile, the German DAX fell 0.05 percent and the French CAC rose 0.34 percent while U.K. shares rose 0.04 percent.
Commodities
Commodities were mostly lower overnight on Euro fears ahead of the G20 statement on currencies. WTI Crude futures fell 0.47 percent to $96.83 per barrel and Brent Crude futures fell 0.19 percent to $117.76 per barrel. Copper futures rose 0.09 percent to $375.55 per barrel. Gold was lower and silver futures fell 0.54 percent to $30.19 per barrel.
Currencies
Currency markets showed euro weakness overnight as the dollar and the yen reigned. The EUR/USD was lower at 1.3338 and the dollar fell against the yen to 92.56. Overall, the Dollar Index fell 0.03 percent despite strength against the euro, the Canadian dollar, and the Swiss franc and weakness against the yen and the pound. The EUR/JPY was a large mover, declining 0.56 percent to 123.42.
PreMarket Movers
Stocks moving in the pre-market included:
- Herbalife (HLF ) shares rose 24.43 percent pre-market as notable investor Carl Icahn has taken a 12.7 percent stake in the company.
- Nu Skin Enterprises (NUS) shares rose 4.94 percent despite noted short seller Muddy Waters Research taking a new short position in the company.
- Ellie Mae (ELLI) shares rose 10.15 percent as the company reported better than expected earnings.
- B&G Foods (BGS) shares fell 7.38 percent following a weak fourth quarter earnings report.
Notable companies expected to report earnings Friday include:
- American Electric Power (AEP) is expected to report fourth quarter EPS of $0.45 vs. $0.40 a year ago.
- Campbell's Soup Co. (CPB) is expected to report second quarter EPS of $0.66 vs. $0.64 a year ago.
- Rogers Communication (RCI) is expected to report fourth quarter EPS of $0.72 vs. $0.70 a year ago.
- TRW Automotive Holdings (TRW) is expected to report fourth quarter EPS of $1.35 vs. $1.84 a year ago.
- VF Corp. (VFC) is expected to report fourth quarter EPS of $3.03 vs. $2.32 a year ago.
On the economics calendar Friday, the Empire State Manufacturing Index, TIC flows, and industrial production data are due out. Also, the Fed's Sandra Pinalto is set to speak.
BY Matthew Kanterman