Stock futures are down today as major companies reported poor earnings and Greece's rescue became less certain.
Before the opening bell, Dow
(INDEXDJX:.DJI) futures fell 0.81% to 12,672.00. S&P 500
(INDEXSP:.INX) futures slipped 0.84% to 1,363.80, and Nasdaq
(INDEXNASDAQ:.IXIC) futures declined by 0.58% to 2,557.00.
Import and export prices made paltry gains in October. Export prices were flat and import prices rose only 0.5% on a monthly basis. The Reuters/University of Michigan consumer sentiment survey is expected to show gains in November. Economists say that the index, which will be released later this morning, will rise to 83.3 from 82.6.
Shares of JC Penney
(NYSE:JCP) fell over 10% this morning after reporting a 26.1% drop in same store sales over the last quarter. The retailer swung to a loss of $0.93 per share on $2.9 billion in revenue, missing estimates on both fronts.
(NASDAQ:PCLN) will buy the rival travel site Kayak
(NASDAQ:KYAK) for $1.8 billion, nearly a 30% premium over Kayak's share price.
(NASDAQ:GRPN) shares sank over 18% in after-hours trading after a 4.26% rally yesterday as the company missed earnings estimates. Revenue rose 32% to $568.6 million and earnings per share was zero.
As the electoral dust settles, investors and policymakers are growing more concerned about the looming fiscal cliff. Yesterday, the non-partisan Congressional Budget Office said
that if the tax hikes and spending cuts go into effect, the economy would go back into recession and the jobless rate will return to 9.1% by the end of next year.
The flip side is that even if Congress reaches a deal and avoids fiscal disaster, the federal budget deficit will be $503 billion higher. House Republicans are promising to compromise a bit with Democrats to avoid a mess like last year's debt ceiling fight.
Yesterday, after Greeks railed and protested to stop Parliament from approving a major austerity bill, the labor reforms and pay cuts passed anyway to secure the next tranche of aid. Now it seems like Greece might not get that aid after all.
Several media outlets reported that leaders in the troika (the International Monetary Fund, European Commission, and European Central Bank) are at an impasse over whether they will disburse the next 31.5 billion euros of aid to Greece. On Friday next week, the country has a 5 billion euro bond to repay, and this will not be possible without the aid bundle. The troika is divided over how much debt relief Greece should get and who will take the write-offs.
After a week of nasty economic data, Germany's Economy Ministry said that it expects a "temporary period of weakness" in the winter. Germany will reveal its GDP numbers next week. Economists expect a narrow gain of 0.2% last quarter. Some expect to see a contraction in the fourth quarter. Germany released its CPI today, which showed 2.0% inflation over last year. Prices in October were flat for the second straight month.
China had a mainly positive data dump today. Industrial production in October gained 0.81%, or 9.6% on a yearly basis and retail sales improved by 14.5% over last year. Exports slumped, however. China's trade surplus shrank as imports gained more traction than exports in October. Consumer prices are still stagnating, rising only 0.1% over September and 1.7% from the year before. Producer prices were actually higher this year. All of this data suggests that the Chinese economy is successfully recovering, but there is still room for policy makers to run with more stimulus.
No positions in stocks mentioned.
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