SF: U.S. Futures Slip Before Earnings Season as Yen, Gold Advance
Jan. 8 (Bloomberg) -- U.S stock-index futures retreated as investors awaited the start of earnings season, while European shares pared earlier gains triggered after economic confidence increased more than forecast. The yen and gold advanced.
Standard & Poor’s 500 Index futures slipped 0.1 percent and the Stoxx Europe 600 Index added 0.1 percent, with trading volume almost 50 percent higher than the three-month average at 9:23 a.m. in New York. The yen appreciated 0.4 percent versus the dollar after touching a 2 1/2-year low last week. Sweden’s krona fell after the central bank said the economy is slowing. Treasuries rose before a $32 billion note auction today. Gold gained for the first time in four days.
Alcoa Inc. will unofficially start the U.S. earnings reporting season after the market closes today. A gauge of euro- region executive and consumer sentiment rose to 87 last month, exceeding the 86.3 median of 24 estimates in a Bloomberg survey. Japan’s Finance Minister Taro Aso said the government will use reserves to buy euro-denominated sovereign debt to weaken the yen, while stopping short of signaling direct euro purchases.
“We’re waiting for earnings to come out,” John Manley, who helps oversee about $212 billion as chief equity strategist for Wells Fargo Advantage Funds in New York, said in a telephone interview. “Valuations are far from excessive. Yet we’ve had a strong rally very quickly. Now the market is adjusting.”
The S&P 500 retreated for a second day after reaching a five-year high last week. Fourth-quarter profits at companies in the measure probably grew an average 2.9 percent, according to analyst estimates compiled by Bloomberg. Excluding financial companies, income increased 0.5 percent.
Earnings Season
Alcoa, the largest U.S. aluminum producer, will today report fourth-quarter profit after one-time items of 6 cents a share, according to the average of 19 analysts’ estimates compiled by Bloomberg, compared with a year-earlier loss of 3 cents. Earnings in 2013 will more than double to 65 cents a share while the aluminum price will rise 6.4 percent, the estimates show.
Almost three shares rose for every two that declined in the Stoxx 600. Debenhams Plc sank 6.5 percent after the second- largest U.K. department-store chain cut its goal for annual profit-margin growth as it stepped up discounting.
Vodafone Climbs
Vodafone Group Plc gained 2.4 percent, the most in five months, as the Wall Street Journal reported that Verizon Communications Inc. Chief Executive Officer Lowell McAdam said buying the U.K. company’s stake in their Verizon Wireless joint venture is feasible. TGS Nopec Geophysical ASA rallied 8.1 percent as the Norwegian offshore surveyor forecast 2012 revenue that exceeded analysts’ estimates.
The yen gained against all its 16 major peers. Japan’s currency has climbed 0.8 percent against the dollar this week after touching 88.41 on Jan. 4, the weakest level since July 2010. The yen’s 14-day relative strength index against the dollar was below the 30 level that traders view as a signal that an asset’s price has fallen too fast.
Sweden’s krona weakened against all its major peers, declining 0.6 percent against the euro. Minutes from the Riksbank’s meeting last month showed that the central bank considered cutting the benchmark rate by twice as much as it did.
‘More Sharply’
“New information received since the monetary policy meeting in October indicates that the Swedish economy is slowing down more sharply than was assessed then,” minutes of the Dec. 17 meeting of Riksbank policy makers published today said.
Treasuries had their worst start to a year since 2009, Bank of America Merrill Lynch indexes showed. U.S. government securities handed investors a 0.7 percent loss in 2013 as of yesterday. Benchmark 10-year yields decreased two basis points to 1.87 percent today.
The yield on Ireland’s five-year note fell seven basis points to 3.25 percent as the nation began selling securities via banks for the first time in three years.
Gold climbed 0.6 percent to $1,656.88 an ounce after falling 2.4 percent since Jan. 3. Oil in New York advanced 0.5 percent to $93.66 a barrel before the American Petroleum Institute’s inventory report today.
The MSCI Emerging Markets Index fell 0.4 percent, declining for a third day, as results from Samsung Electronics Co. and HTC Corp. disappointed some investors. South Korea’s Kospi Index slid 0.7 percent and Taiwan’s Taiex lost 0.4 percent. The Shanghai Composite Index lost 0.4 percent and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong sank 2.2 percent, the most in two months.
Russia’s Micex Index jumped 2.5 percent on the first day of trading this year and Turkish stocks gained for a second day after a report showed a pickup in industrial output. Brazil’s Bovespa index slipped 0.6 percent.
--With assistance from Adria Cimino in Paris and Claudia Carpenter, Paul Dobson, Andrew Rummer and Michael Shanahan in London. Editors: Stephen Kirkland, Michael P. Regan
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
