Market Primer: Futures Rise Reversing Monday Declines

U.S. equity futures rose in early pre-market trade despite some worrisome economic data being released overnight globally. The Eurozone Unemployment Rate rose to a record 12 percent in March, in line with estimates but actually showing smaller than expected gains in Spain and Italy.

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In other news around the markets:

• The Eurozone Manufacturing PMI rose to 46.8 in March from 46.6 in February, beating expectations of a reading of 46.6. Notably, Germany's manufacturing sector swung to a contraction in March from expansion previously and the Italian and Spanish PMI's were extremely weak.
• The Reserve Bank of Australia left rates unchanged overnight noting that inflation was running near trend despite growth running slightly below trend. The RBA Board noted that the current policy stance left open the chance of further easing but only if demand weakened further.
• Bank of Japan Governor Kuroda spoke overnight saying that the BoJ is looking at buying longer dated government bonds as part of its efforts, however he noted that reflation efforts will take time as wage gains tend to lag broad price inflation.
• S&P 500 futures rose 4.7 points to 1,560.80.
• The EUR/USD was lower at 1.2838.
• Spanish 10-year government bond yields fell to 5.04 percent from 5.06 percent.
• Italian 10-year government bond yields fell to 4.71 percent from 4.76 percent.
• Gold declined 0.14 percent to $1,599.20 per ounce.

Asian shares were mixed overnight as Japanese shares declined sharply for the second consecutive day on weak economic data and fears that easing efforts are failing. The Japanese Nikkei Index fell 1.08 percent and the Shanghai Composite Index declined 0.3 percent while the Hang Seng Index gained 0.31 percent. Also, the Korean Kospi fell 0.49 percent and Australian shares rose 0.38 percent.

European Markets
European shares were mostly higher overnight despite unemployment across the eurozone hitting a new record high as manufacturing PMI's were slightly better than expected in most countries. The Spanish Ibex Index was flat in early trade while the Italian FTSE MIB Index fell 0.43 percent. Meanwhile, the German DAX gained 0.69 percent and the French CAC rose 0.65 percent and U.K. shares rose 0.9 percent.

Commodities
Commodities were mixed overnight as oil gained and gold declined. WTI Crude futures rose 0.01 percent to $97.06 per barrel and Brent Crude futures gained 0.24 percent to $111.31 per barrel. Copper futures rose slightly overnight on not as dovish comments from the RBA Board as the previous statement. Gold was lower and silver futures rose 0.06 percent to $27.96 per ounce.

Currencies
Currency markets were rather quiet overnight as major pairs were relatively unchanged as the Australian dollar was the notable out-performer. The EUR/USD was lower at 1.2838 and the dollar fell against the yen to 93.27. Overall, the Dollar Index rose 0.03 percent on strength against the pound and the euro despite weakness against the yen and the Canadian dollar. The Australian dollar was stronger overnight, gaining 0.34 percent against the greenback and 0.37 percent against the yen.

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

• Humana (HUM) shares rose 11.64 percent pre-market as insurers won a 3.3 percent rate increase in Medicare Advantage payments.
• Hewlett-Packard (HPQ) shares declined 4.29 percent pre-market on fears that a new push into the server space is too late.
• Bank of America (BAC) shares rose 0.41 percent pre-market the company is set to continue to benefit from foreign tax credits as it restructures its international operations.
• Dell (DELL) shares rose 0.14 percent pre-market, continuing recent gains, as Michael Dell supported a competing bid from the Blackstone Group (BX) and warned on the risk of the company remaining public during its restructuring.

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Notable companies expected to report earnings Tuesday include:

• Global Payments Inc. (GPN) is expected to report third quarter EPS of $0.89 vs. $0.83 a year ago.
• McCormick and Company (MKC) is expected to report first quarter EPS of $0.56 vs. $0.55 a year ago.

On the economics calendar Tuesday, motor vehicle sales will be released throughout the day following the Redbook and chain store sales. Also, factory orders are expected to be released and Fed Presidents Naryana Kocherlakota and Charles Evans are set to speak. In addition, the Treasury is set to auction 4- and 52-week bills. Overnight, the British construction PMI is expected to be released and could move markets.

BY Matthew Kanterman