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Pre-Market Primer: US Futures Flat Ahead of Consumer Confidence, Home Prices


Asian stocks surged yesterday despite more signs of a slowdown in China, as US investors wait for the release of data on consumer confidence and home prices later this morning.

The global equities buying spree, spurred by Ben Bernanke's suggestion that more easing is to come, spread to Asia. Asian markets rallied yesterday, with Japanese benchmark indices gaining over 2%, passing the highest level since the earthquake and tsunami of 2011. Weaker exports caused industrial profits in China to fall 5.2% over the first two months of this year. The government does not release figures for January because of the Lunar New Year celebration. This data adds to a pile of clear signs that the Chinese economy will be slowing down, making it more likely that the government will enact more stimulative policies.

In Europe, stocks are also getting a boost from a surprising rise in French consumer confidence data. Spain and Italy both sold short-term debt today. Italy's cost of borrowing fell more than half a percentage point from last month. British stocks are down after retail sales in the country stayed steady.

US equities are down slightly today ahead of two data releases on house prices and consumer confidence.
  • Dow (^DJI) futures are off 0.11% at 13,186.00
  • S&P 500 (SPY) futures are down 0.13% at 1,413.20.
  • Nasdaq (^IXIC) futures fell 0.09% to 2,774.50.
Oil futures fell despite reports that the Sudanese military bombed South Sudanese oil fields today. Investors are still concerned about supply disruptions if Western countries tighten sanctions on Iran, but increased US supplies weighed on prices. WTI futures fell 0.16% to $106.86/barrel and Brent fell 0.33% to $125.44/barrel.

After hitting a four-year high last month, consumer confidence is expected to have declined slightly in March. The decline in home prices in the 20 US cities surveyed by the S&P/Case-Shiller property value index probably slowed down slightly in January, according to economists' estimates. The index is expected to show a 3.8% drop in prices from last year.

The country's third-largest home builder, Lennar Corp. (LEN) beat earnings estimates for the three months ending February 29. Income fell from $27.4 million to $15 million last year. Analysts expected the company's profits to fall even further, and the stock is up nearly 4% in early trading.

The for-profit education company Apollo Group (APOL) fell over 6% in after-hours trading despite reporting better-than-expected earnings. The company expects enrollment to remain volatile in the coming quarters. Apollo's enrollment is closely tied to the unemployment rate, as dismissed workers seek new marketable skills to make themselves relevant in the job market.

Neurocrine Biosciences (NBIX) fell over 8% in the pre-market after announcing that data from one testing site of its tardive dyskinesia drug had to be removed from test results due to data inconsistencies. The other seven sites do consistently show that doses of the drug help prevent symptoms of tardive dyskinesia from surfacing.

Twitter: @vincent_trivett
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