BLBG: U.S. Index Futures Slip With Europe Equities as Oil Drops
U.S. stock futures fell from near records, paring a seventh straight December gain, while Treasuries rose and the dollar weakened. European and emerging equities slipped as a drop in oil prices (SPCPEUYY) led energy shares lower.
Standard & Poor’s 500 Index futures dropped 0.2 percent at 9 a.m. in New York after the gauge closed at a record for the 53rd time this year. The Stoxx Europe 600 Index slid 0.8 percent to extend a December retreat. The MSCI Emerging Markets Index fell 0.4 percent to push its loss this year to near 5 percent. U.S. crude lost 0.9 percent and the dollar weakened against all but two of its 16 major counterparts. Russia’s ruble strengthened 2 percent, trimming its worst year since 1998. Italy sold 10-year debt at the lowest yield on record.
The S&P 500 has risen 1.1 percent in December, bolstered by the fastest expansion for the American economy in more than a decade. A report will show U.S. consumer confidence increased this month, economists forecast. Oil traded near the lowest since 2009 in New York and London amid speculation U.S. crude inventories will stay at the highest for the time of year in at least three decades. Greek Prime Minister Antonis Samaras will request elections for Jan. 25, with the anti-austerity party Syriza leading polls.
Photographer: Kostas Tsironis/Bloomberg
Antonis Samaras, Greece's Prime Minister, stands to announce his vote to parliament... Read More
“It hasn’t been a fantastic year for equities, and now those who can, are taking profits,” Luca Paolini, chief strategist at Pictet Asset Management Ltd., said by phone from London. “The concerns about Greece and the euro zone, the price of oil, and the Fed hiking rates are not critical, but they do add up. There is this feeling that the good years of the bull market are behind us. Next year will be more difficult.”
Energy Producers
Europe’s benchmark index headed for the first December decline since 2008 and emerging-market shares slid toward a second yearly decline as energy shares continued to retreat. Total SA and Royal Dutch Shell Plc slid at least 1.7 percent. A measure of developing-nation energy shares is poised for its steepest annual drop since 2008.
West Texas Intermediate crude fell 0.7 percent to $53.24 a barrel, near the lowest closing price since May 2009. The U.S. benchmark slumped 46 percent this year as the largest U.S. oil output in about 30 years combines with slowing global demand and the refusal of the Organization of Petroleum Exporting Countries to reduce production levels.
Crude stockpiles in the U.S., the world’s largest oil consumer, are estimated to have remained at 387.2 million barrels last week, the highest for the time of year since at least 1982, according to a Bloomberg News survey before government data tomorrow.
Equity Records
The S&P 500 has gained 13 percent this year, while the Dow is up 8.8 percent in 2014 after climbing above 18,000 for the first time last week. The Russell 2000 of small-cap stocks climbed to an all-time high on Dec. 26. The Nasdaq Composite Index reached its highest since March 2000 that same day, closing about 5 percent below its record.
Italy’s 10-year yield dropped nine basis points, or 0.09 percentage point, in the secondary market to 1.89 percent. The Italian government sold 2.996 billion euros ($3.6 billion) in 2.5 percent 10-year bonds in an auction today at a record-low average yield of 1.89 percent, the Bank of Italy said. The auction caps the best year for European government bonds since 1995 and a rally that has sent borrowing costs from Germany to Ireland to all-time lows.
Spain’s consumer prices fell the most since 2009 this month, raising the prospects for central-bank stimulus to ward off deflation. Prices dropped 1.1 percent from a year earlier, the most since July 2009, the Madrid-based National Statistics Institute said today.
Greek Yields
Three-year yields in Greece held above 12 percent. The nation’s early return to the ballot box was sealed yesterday when Samaras failed to get his candidate, Stavros Dimas, confirmed by the requisite supermajority of 180 lawmakers. Credit-default swaps insuring $10 million of Greek debt for five years were quoted at $3.68 million upfront and $500,000 annually, signaling a 64 percent probability of default, according to CMA.
The stock-benchmark index fell 1.5 percent this month, heading for its first December decline since 2008. It’s advanced 4.3 percent this year.
The ruble rose 2 percent against the dollar while Russia’s Micex Index (INDEXCF) headed for the first decline in three years. The yuan strengthened by 0.4 percent. An official Purchasing Managers’ Index for December is expected to indicate Chinese manufacturing failed to expand for the first time in more than two years, based on the median estimate of economists surveyed by Bloomberg before the data are released on Jan. 1.
Rubber for June delivery rallied to 213.3 yen a kilogram on the Tokyo Commodity Exchange and palm oil climbed as much as 0.8 percent in Kuala Lumpur as flooding across Malaysia and parts of Thailand hurt supplies of both commodities and forecasters predicted more rain.
To contact the reporter on this story: James Herron in London at jherron9@bloomberg.net
To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net Jeremy Herron
