Pre-Market: Jobless Claims Rise Less Than Expected; Global Markets Fall After Yellen's Speech

By Alex Brokaw  MAR 20, 2014 9:04 AM

A Hong Kong indicator of Chinese stocks moves into bear territory.

 


Stock futures pointed toward a lower open on Thursday.

Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures fell 0.19% to 16,108. Futures on the S&P 500 (INDEXSP:.INX) were down 0.20% to 1,848.50. Nasdaq (INDEXNASDAQ:.IXIC) futures moved lower, sliding 0.24% to 3,665.50.

Jobless claims kicked off a busy day of economic indicators, with initial claims rising less than expected to 320,000 for the past week. The Bloomberg Consumer Comfort Index will be released at 9:45 a.m. The Philadelphia Federal Reserve delivers its general business conditions index, which is widely followed as an indicator of manufacturing sector trends, at 10:00 a.m. Existing-home sales also arrive at 10:00 a.m. The Conference Board's leading indicators index, which tracks 10 indicators that lead overall economic activity, is expected at 10:00 a.m. as well. The US Treasury will price its 3-month and 6-month bills, its 2-year floating rate note, its 2-year, 5-year, and 7-year notes, and its 10-year TIPS auction from 11 a.m. through 1:00 p.m. At 4:30 p.m. the Federal Reserve will release its balance sheet along with the money supply. Finally, the Fed is expected to release the results of its stress test of 30 banks including Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), and JPMorgan Chase (NYSE:JPM) today.

In her first public address yesterday, newly appointed Fed chairperson Janet Yellen said the US central bank could end its bond-buying program by the fall and raise benchmark interest rates six months later. The announcement sent global stocks and bonds lower, while the dollar dug in at higher levels.

Asian stocks declined overnight; the yuan dropped lower and the Hang Seng China Enterprises Index (a gauge of mainland stocks trading in Hong Kong) fell below a recognized threshold into a bear market. Meanwhile, the Chinese government has pledged to accelerate construction projects in an effort to boost its slowing economy and reach its year-end expansion target.

In Europe, equities began Thursday's session lower on Yellen's words. The EU reached a decision on the final piece of its plan to handle bank crises, which puts in place a unified system for shutting down failing banks in the eurozone.

In earnings news, Nike (NYSE:NKE) is expected to release its fiscal year Q3 results at 4:00 p.m. Analysts agree that earnings per share will be $0.73, unchanged from the same quarter last year. Shares were down 0.19% in pre-market trading.

Hermes (EPA:RMS) reported a record increase in profit margins and an 8.9% earnings increase in 2013. The gain comes in the face of a slowdown of luxury-goods consumption. However, CEO Axel Dumas said that the company expects lower profitability in 2014 due to a weak yen.

In other stock news, Starbucks (NASDAQ:SBUX) announced it will expand its evening alcohol and light bites menu to thousands of stores. The move is part of a long-term plan to double its market value to $100 billion. Shares were down 0.14% in pre-market trading.

There is one final piece of news that's worth paying attention to: Chinese e-commerce leader Alibaba, whose US initial public offering is due later this year, has invested $215 million in Silicon Valley start-up Tango, which offers a popular messaging app. Company co-founder Eric Stetton told the New York Times that the funds give Tango the ability to compete against WhatsApp, the messaging service recently acquired by Facebook (NASDAQ:FB) for $16 billion. 

Twitter: @brokawbrokaw
No positions in stocks mentioned.

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