BLBG: U.S. Futures Rise on JPMorgan; Euro Gains After Spain Bond Sale
U.S. index futures gained and stocks rebounded after JPMorgan Chase & Co.’s earnings beat analysts’ estimates and Spain’s bond sale drew increased demand. The euro strengthened to a two-month high against the dollar.
Futures on the Standard & Poor’s 500 Index climbed 0.3 percent, paring earlier gains, at 8:36 a.m. in New York. The MSCI World Index of 24 developed countries rose 0.2 percent after losing as much as 0.4 percent. Greek lenders rallied after Piraeus Bank SA offered to buy stakes in two banks. The euro appreciated 0.8 percent to $1.2847 and Spanish 10-year government bond yields fell nine basis points to 4.66 percent. Oil advanced 0.3 percent.
JPMorgan, the second-biggest U.S. bank by assets, said profit rose 76 percent, helping offset concerns that a slowing global economic recovery will erode earnings. Spain sold the full 3 billion euros ($3.84 billion) of 15-year bonds it planned to issue, attracting bids for 2.57 times the securities on offer, compared with 1.79 at an April auction. Stocks fell earlier after a government report showed China’s growth ebbed in the second quarter by more than economists predicted.
“We are in a transition phase,” Urs Eilinger, Zurich-based chief investment officer at Infidar Investment Advisory Ltd., which manages about $3 billion. “We will have a weaker economy in the second half of the year but not a double dip. China is slowing and the U.S. will slow down too.”
The Federal Reserve cut its forecast for U.S. growth this year, saying the risks to the outlook “shifted to the downside,” it said in the minutes of its June meeting yesterday. A report today will probably show industrial output fell 0.1 percent, following a 1.3 percent jump in May, according to the median of 76 economists’ forecasts in a Bloomberg survey. Separately, the Senate is set to vote on an overhaul of the nation’s financial regulation.
JPMorgan
The increase in U.S. index futures indicated the S&P 500 may rebound. Futures trimmed gains after a gauge of New York manufacturing trailed economists’ estimates, overshadowing a bigger-than-forecast decrease in jobless claims.
JPMorgan, the second-largest U.S. bank, had second-quarter profit of $1.09 a share. That compared with an average estimate for adjusted earnings of 71 cents projected by 22 analysts surveyed by Bloomberg. JPMorgan rose 0.5 percent in pre-market trading.
The Stoxx Europe 600 Index added 0.1 percent. National Bank of Greece, EFG Eurobank Ergasias SA and Alpha Bank SA rallied more than 6 percent as Piraeus Bank submitted a bid to buy “significant stakes” in state-controlled lenders Agricultural Bank of Greece SA and Hellenic Postbank SA. Piraeus Bank jumped 11 percent.
Euro, Aussie
The euro rose against most of its peers after the Spanish debt auction. The Australian dollar fell against 15 of 16 major currencies on concern slower growth in China will dent demand for commodities. The yen weakened against 11.
The yield on Spanish 15-year bonds slipped 12 basis points to 5.12 percent. The cost of protecting Spanish debt lost 4 basis points to 216, according to data provider CMA DataVision. German bunds erased their advance after the auction, leaving the yield four basis point higher at 2.70 percent.
Ten-year Treasuries fell, with the yield rising one basis point to 3.06 percent, while two-year note yields rose two basis point to 0.63 percent.
The Shanghai Composite Index of stocks declined 1.9 percent, the most in two weeks, after the government said gross domestic product rose 10.3 percent in the second quarter, less than the 10.5 percent median estimate in a Bloomberg News survey of 28 economists. The 21-country MSCI Emerging Markets Index fell for the first time in six days, losing 0.2 percent.
Copper for delivery in three months dropped 0.7 percent to $6,675 a metric ton on the London Metal Exchange. China is the world’s largest buyer of the metal.
Crude oil for August delivery added 22 cents to $77.26 a barrel on the New York Mercantile Exchange, erasing an earlier decline of as much as 0.7 percent. Gold climbed 0.5 percent to $1,212.90 an ounce.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
