Market Primer: Futures Flat on Global Manufacturing Data

U.S. equity futures were flat in early pre-market trade following manufacturing PMI's from both China and the eurozone. China's HSBC Flash Manufacturing PMI rose to 51.7 in March, reversing February's drop and easing fears of a renewed Chinese slowdown. However, the Eurozone Manufacturing PMI came in weaker than expected and showed a further contraction in output in March.

Top News
In other news around the markets:

• The FOMC kept its foot on the proverbial pedal Wednesday in voting to keep policy constant. Although members debated extensively the costs and benefits of additional easing, the committee agreed that more accommodation was necessary in the face of fiscal tightening.
• Germany's manufacturing sector showed a renewed contraction after two months of expansion as the manufacturing PMI fell to 48.9 from 50.3 on expectations of a rise to 50.5.
• New Zealand's fourth quarter GDP rose much more than expected, climbing 1.5 percent from the previous quarter on expectations of a 0.9 percent gain. The data is the latest strong data point from Australia and New Zealand, showing renewed strength in both economies.
• S&P 500 futures fell 1.3 points to 1,547.70.
• The EUR/USD was lower at 1.2905.
• Spanish 10-year government bond yields fell to 4.95 percent from 4.98 percent.
• Italian 10-year government bond yields fell to 4.6 percent from 4.66 percent.
• Gold rose 0.01 percent to $1,607.70.

Asian shares were mixed overnight led by Japanese shares following the one-day holiday as shares rose on hopes of increased easing from the Bank of Japan. The Japanese Nikkei Index rose 1.34 percent and the Shanghai Composite Index gained 0.3 percent while the Hang Seng Index fell 0.14 percent. Also, the Korean Kospi declined 0.44 percent and Australian shares fell 0.16 percent.

European Markets
European shares were weaker on the PMI data overnight as well as continued uncertainty over Cyprus' bailout; the Mediterranean nation continues talks with Russian creditors today and no deal has been reached yet. The Spanish Ibex Index fell 0.4 percent and the Italian FTSE MIB Index fell 0.26 percent. Meanwhile, the German DAX declined 0.74 percent and the French CAC lost 0.86 percent while U.K. shares fell 0.64 percent.

Commodities
Commodities were mixed overnight as energy futures weakened on the European manufacturing data and metals gained. WTI Crude futures fell 0.52 percent to $53.01 per barrel and Brent Crude futures fell 0.29 percent to $108.37 per barrel. Copper futures rose 0.16 percent to $345.15 per pound on the stronger Chinese data. Gold was higher and silver futures gained 0.18 percent to $28.87 per ounce.

Currencies
Currency markets were in flux overnight as the pound and the yen gained while the euro sank. The EUR/USD was lower at 1.2905 and the dollar fell against the yen to 95.46 while the pound gained 0.51 percent to 1.5177 against the dollar. Overall, the Dollar Index gained 0.03 percent on strength against the euro, the Swedish krone, and the Swiss franc. Notably, the EUR/GBP rate fell 0.75 percent to 0.8502 and the EUR/JPY fell 0.8 percent to 123.18.

Pre-Market Movers
Stocks moving in the pre-market included:

• Oracle (ORCL) shares fell 7.73 percent pre-market as the company reported worse than expected earnings due to currency fluctuations.
• Jabil Circuit (JBL) shares fell 4.52 percent pre-market as the company reported weaker than expected earnings.
• J.C. Penney (JCP) rose 1.24 percent as bondholders filed a noticed withdrawing their default notice, meaning that the company does not have to fight the bondholders in bankruptcy court.
• Zimmer Holdings (ZMH) shares rose 0.28 percent pre-market as the company announced an 11 percent rise in its first quarter dividend.

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Notable companies expected to report earnings Thursday include:

• Lululemon (LULU) is expected to report fourth quarter EPS of $0.74 vs. $0.51 a year ago.
• Micron Technology (MU) is expected to report a fourth quarter loss of $0.20 per share vs. a loss of $0.29 per share a year ago.
• Nike (NKE) is expected to report third quarter EPS of $0.67 vs. $0.60 a year ago.
• Ross Stores (ROST) is expected to report fourth quarter EPS of $1.07 vs. $0.85 a year ago.
• Silver Wheaton (SLW) is expected to report fourth quarter EPS of $0.48 vs. $0.41 a year ago.

On the economics calendar Thursday, Irish GDP is due out followed by retail sales and weekly jobless claims. Later, the FHFA house price index is expected followed by the U.S. PMI, existing home sales, and the Philly Fed Manufacturing Index. In addition, the Treasury is set to auction 10-year TIPS. Overnight, the German IFO Business Climate Index should move markets following the weak PMI data today.

BY Matthew Kanterman