Day Traders Diary
11/7/12After showing early gains, U.S. equity futures have weakened and are now firmly lower after Barack Obama was reelected to a second term as President. The S&P 500 futures are lower by 0.8%.
Overnight, the global markets were focused on the outcome of the presidential election. As the results began rolling in, equity futures and Asian markets were all in negative territory, until it was clear that Mr. Obama would indeed be reelected. Markets began to respond favorably and the S&P 500 futures recovered from being down nearly 1.0%. Likewise, bond yields came in, commodities caught a bid, and the dollar weakened as it became clear status quo would be preserved. In Asia, Japan's Nikkei and China's Shanghai Composite finished unchanged while Hong Kong's Hang Seng gained 0.7%.
Futures were unable to hold their gains through the overnight session, and began deteriorating shortly after the European markets opened. This coincided with the euro falling to its lowest level against the dollar in nearly two months as the pair currently trades near 1.2760. In addition, Spain and Germany reported disappointing industrial production figures. In Spain, the reading showed a 7.0% year-over-year drop, while a 3.6% decline was expected. Meanwhile, German industrial output decreased by 1.8% month-over-month, while expectations called for a 0.5% dip. Also of note, the Eurozone Autumn Forecast was released, and the report points to an expected slowdown in the German economy. With the U.S. election in the rear-view mirror, attention turns back to Europe where Greece is set to vote on austerity measures today. It should be noted that protests in Athens are intensifying. In addition, the European Central Bank and Bank of England will hold policy meetings tomorrow. European indices have given up their early gains as markets near midday. Germany's DAX, France's CAC, and UK's FTSE are all down near 0.3%.
In U.S. corporate news, News Corp (NWSA 24.80, +0.52) is higher by 2.1% after beating on earnings. During the first quarter, the media company earned $0.43 on $8.14 billion in revenue. The company's bottom line exceeded the Capital IQ consensus estimate by $0.05, while the revenue was in-line with expectations. Randgold Resources (GOLD 114.13, -7.33) is sliding 6.0% after reporting revenue of $319.9 million, which was roughly $59 million short of analyst expectations.
The weekly MBA Mortgage Index showed a 5.0% decrease in new applications. This follows prior week's decline of 4.8%.
Today's only remaining data point is the September consumer credit report, which will be released at 15:00 ET.
The U.S. Treasury will auction off $24 billion in 10-yr notes.
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