Benzinga Market Primer, Friday October 5: Non-Farm Payrolls Day
U.S. equity futures were flat in early Friday trading as the Bank of Japan launched no new easing plans overnight and markets await the Non-Farm Payrolls report in the U.S. at 8:30 am EST. The Bank of Japan did not launch any new plans of easing through its QE program nor did it talk of foreign exchange intervention overnight, but bank officials did cut growth forecasts both domestically and mentioned global weakness as a cause.
In other news around the markets:
- Greek talks with the Troika creditors have broken down overnight, as Greek Finance Minister Stournaras walked out of a meeting with officials just 45 minutes in after failing to agree to an additional 2.5 billion euros in cuts.
- Morgan Stanley (NYSE: MS) Chief Gorman spoke overnight, citing that cost cutting measures have only gotten the bank to earn an ROE of about 5 percent and more are expected in the future to help boost ROE to 10+ percent.
- The IMF cut its global growth forecast for 2012 from 3.4 percent to 3.3 percent. Also, the economists at the IMF cut forecasts for 2013 to 3.6 percent from 3.9 percent and cut its forecast for eurozone growth -0.4 percent in 2012 and -0.2 percent in 2013. China's forecast was also cut 8.2 percent in 2013.
- S&P 500 futures were flat at 1,457.20.
- The EUR/USD was lower at 1.3014.
- Spanish 10-year government bond yields fell to 5.841 percent.
- Italian 10-year government bond yields fell to 5.082 percent.
- Gold fell 0.26 percent to $1,791.90 per ounce.
Asian shares rallied overnight, led by Australia. The S&P ASX 200 rose 0.94 percent and the Japanese Nikkei rose 0.44 percent following the comments from ECB President Mario Draghi to protect the euro and also following the Fed's dismal assessment of the global economy, which points to continued easing. The Hang Seng Index rose 0.5 percent and the Korean Kospi rose 0.12 percent. European shares also rose in early trade led by the core as the German DAX rose 0.6 percent and the French CAC rose 0.8 percent. The Spanish Ibex Index rose 0.6 percent and the Italian MIB Index rose 6.3 percent.
Commodities were weaker in early trade following Thursday's rally. WTI Crude futures fell 0.76 percent to $91.01 per barrel and Brent Crude futures fell 0.66 percent to $11.84 per barrel. Copper futures slipped 0.15 percent to $378.05 per pound and Australian officials denied that the resource boom was ending and noting that it was reaching a more mature phase, with exports still expected to grow. Gold was lower and silver futures slid 0.42 percent to $34.955 per ounce.
Currency markets were relatively quiet overnight, as the Dollar Index was effectively unchanged overnight. The EUR/USD was lower and the dollar fell slightly against the yen. The greenback was slightly weaker against the Canadian dollar and was stronger against the Swiss Franc. The euro was broadly weak in overnight trading, falling against the yen, the pound, and the Australian dollar.
Stocks moving in the pre-market included MetroPCS (NYSE: PCS), which gained 1.65 percent pre-market as the company is subject of a potential takeover from either Sprint (NYSE: S) or some other carrier. Also, Carnival Corp. (NYSE: CCL) was stronger in the pre-market for the second day in a row, as share rose 1.52 percent pre-market. Meanwhile, shares of Advanced Micro Devices (NYSE: AMD) slipped 0.36 percent pre-market as a report overnight showed that prices for chips keep falling.
Notable companies reporting earnings Friday include:
- Constellation Brands (NYSE: STZ) is expected to report quarterly EPS of $0.54 vs. $0.77 a year ago.
On the economic calendar, it's Non-Farm Payrolls day and markets will surely react to this data point, as always. Two internal points of the data to pay attention to are the change in the labor force and the private sector payrolls growth data. Markets are looking for NFP to rise 113,000 in September, higher than the 96,000 in August and July's 41,000. Private payrolls are expected to grow 130,000 jobs in the month. Also, Fed Governor Elizabeth Duke is set to speak on the state of the housing industry.
Good luck and good trading.
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