Pre-Market Primer: Bank of Japan Makes a Big Move; German Confidence Surges

By Vincent Trivett  JAN 22, 2013 8:30 AM

And Washington prepares to boldly kick the can to May. Look forward to it.

 


US stocks are fluctuating between positive and negative territory as investors await earnings from key companies while the Bank of Japan made a historic move and German investor confidence surges.

Dow (INDEXDJX:.DJI) futures fell 0.10% to 13,563. S&P 500 (INDEXSP:.INX) futures dropped 0.11% to 1,477.20. Nasdaq (INDEXNASDAQ:.IXIC) futures ticked up 0.05% to 2,735.25.

The yen rose to 88.72, its highest level against the dollar in eight months after the Bank of Japan announced that it will follow the US Federal Reserve in adopting a program of unlimited asset purchases and formally aim for 2% inflation. Starting in January of 2014, the BOJ will buy 13 trillion yen in bonds every month, 2 trillion of which will be in Japanese government bonds. This is a major change to the already 101 trillion yen asset purchase program. Despite the yen's 0.98% spike, the Nikkei Index (INDEXNIKKEI:.NI225) closed lower today. The Bank of Japan has consistently failed to stall deflation for nearly a quarter century.

Verizon (NYSE:VZ) shares fell 2.3% after its fourth quarter earnings disappointed. Adjusted EPS fell to $0.38 per share from $0.52 per share a year earlier. Analysts expected $0.50 per share.

Research In Motion (NASDAQ:RIMM) shares rose nearly 7% to $16.92 this morning after traders saw that CEO Thorsten Heins told German media that the BlackBerry maker will consider selling its hardware production or license its proprietary software to other companies after the release of BlackBerry 10. Despite its slide in market share, RIM's security technology and messaging service is still valued.

After the bell, Texas Instruments (NYSE:TXI), CSX (NYSE:CSX), IBM (NYSE:IBM) and Google (NASDAQ:GOOG) will report earnings.

The International Labor Organization released a report today saying that there were 197 million jobless in 2012 and that number could rise by as much as 5.1 million in 2013. The youth unemployment rate is 12.6%, it said.

ILO places the blame on the European debt crisis, misguided austerity measures, and policymakers' indecision.

"The indecision of policy-makers in several countries has led to uncertainty about future conditions and reinforced corporate tendencies to increase cash holdings or pay dividends rather than expand capacity and hire new workers," ILO wrote.

As uncertainty over the eurozone recedes, Germany's ZEW Center for European Economic Research's index of investor and analyst sentiment rose to 31.5 this month from 6.9 in December 2012. This is the highest level for the index since May 2010.

The UK's budget deficit, excluding its support for banks, rose to 154 billion pounds last month.

Back in US economics, December 2012 existing home sales numbers are due for release later this morning. Sales of previously constructed homes is slated to rise to a seasonally adjusted annualized rate of 5.1 million from 5.04 million in November.

Tomorrow, the Republican-controlled House of Representatives will temporarily extend the debt ceiling until May.

Twitter: @vincent_trivett
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.