BLBG:U.S. Stock Futures Advance as Treasuries Decline After JPMorgan
U.S. equity-index (MXEF) futures advanced and Treasuries fell for the first time this week after JPMorgan Chase & Co.’s earnings beat analyst estimates. The euro strengthened and Spanish bonds rose for a third day.
Futures on the Standard & Poor’s 500 Index climbed 0.3 percent at 7:24 a.m. in New York with JPMorgan gaining 1.4 percent in pre-market trading. The Stoxx Europe 600 Index dropped 0.1 percent. The yield on 10-year Treasuries climbed 2 basis points. Gasoline fell 1.3 percent. Spain’s 10-year bond yield lost eight basis points. The euro appreciated for a second day against the dollar and the yen.
JPMorgan, the biggest U.S. bank by assets, said net income rose 34 percent on gains from mortgages and trading, in the first report by a large U.S. bank for the third quarter. Data today also may show confidence among U.S. consumers stayed near the highest since May.
“‘Given its scale and reach, JPMorgan tends to set the tone for the rest of the bank earnings season and will have pointers for U.S. and European banks,” Jim Reid, head of fundamental strategy at Deutsche Bank AG in London, said before the earnings.
Michigan Confidence
The gain in S&P 500 (SPX) futures indicated the benchmark U.S. gauge will pare this week’s 1.9 percent decline. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for October fell to 78 from 78.3 in September, according to a Bloomberg survey of economists. The data is due for release at 9:55 a.m. New York time.
With U.S. unemployment falling to 7.8 percent, according to a Labor Department report last week, the jobless rate has become a focal point in President Barack Obama’s bid for a second term. Vice President Joe Biden and Republican Paul Ryan each said in a TV debate yesterday that their parties’ proposals would bring the rate below 6 percent.
The Stoxx 600’s decline extended this week’s drop to 1.4 percent. Akzo Nobel NV (AKZA), the world’s largest paintmaker, slid 4.2 percent after an RTL report that Chief Executive Officer Ton Buechner will extend his sick leave for fatigue. Morgan Crucible Co., which provides body armor to the U.K.’s Ministry of Defence, plunged 11 percent after saying trading deteriorated in the third quarter.
Europe’s Output
Industrial production in the euro area rose 0.6 percent in August from July, the European Union’s statistics office in Luxembourg said today. Economists had projected a drop of 0.4 percent, the median of 36 estimates compiled by Bloomberg. Economic growth in Germany will stagnate in the second half, Bundesbank Jens Weidmann told reporters in Tokyo today.
“The market is nervously trying to focus on where the growth is going to come from,” James Bevan, chief investment officer at London-based CCLA Investment Management Ltd., said on Bloomberg Television’s On the Move with Francine Lacqua. “We know the central banks are prepared to print money. That’s absolutely great. What we haven’t seen is any follow through from the fundamental real economy.”
Spain’s two-year note yield dropped 11 basis points to 3.06 percent. The nation wants there to be consensus among European governments on any bailout request before deciding whether to ask for help, Deputy Prime Minister Soraya Saenz de Santamaria said yesterday.
Germany’s 10-year bund yield fell to 1.48 percent and the rate on the 10-year Treasury note rose to 1.69 percent.
The euro strengthened 0.3 percent to $1.297 and added 0.5 percent to 101.73 yen.
Credit Defaults
The cost of insuring European financial debt fell to the lowest since July 28, 2011, with the Markit iTraxx Financial index (SENSEX) of credit-default swaps linked to 25 banks and insurers dropping five basis points to 176 basis points.
The MSCI Emerging Market Index rose 0.1 percent.
Hong Kong’s Hang Seng gauge advanced 0.7 percent after state-run Central Huijin Investment Ltd. said it will continue market operations after increasing stakes in the nation’s banks.
The BSE India Sensitive 30 Index fell 0.7 percent as Infosys Ltd. slumped the most in six months. The country’s second-largest software services exporter cut its sales-growth forecast and said higher wages and currency fluctuations will hurt profitability.
Rand Gains
The rand extended its gain to 3 percent over four days and is set for its first weekly advance in five after South African truck drivers agreed to end a strike.
China’s yuan strengthened for a 10th straight week, touching the highest level in 19 years, on speculation the government will announce measures to revive growth in the world’s second-largest economy.
Gasoline dropped for a second day to $2.9149 a gallon. Global refiners will process 400,000 barrels a day less crude in the fourth quarter because of plant halts and a lower demand outlook, the Paris-based International Energy Agency said in a monthly report today. Copper in London fell 1 percent to $8,161 a metric ton. Germany is the third-biggest copper buyer.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
