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Pre-Market Primer: Mixed Futures Ahead of Consumer Sentiment Report, Yahoo Looks for a Turnaround Expert


Marissa Mayer is searching for a sidekick. Also, traders will be getting a better pay rise than investment bankers this year.


Futures hardly budged today ahead of the the consumer sentiment report.

The Reuters/University of Michigan consumer sentiment index fell to 72 in August from 72.3 last month, according to economists' predictions.

Bad loans at Spanish banks hit a fresh high in June. Non-performing loans rose to 9.42% from 8.95% in May, as a share of all portfolios in the country. Loans in arrears rose to 164.4 billion euros, from 156 billion euros. The huge plunge in home prices is largely to blame for the bad debt. Mounting loan losses have led to bailouts of financial institutions by Madrid and European authorities.

The Japanese yen fell to 98.134 against one euro and 79.410 to the US dollar today after the Japanese government proclaimed that its deflation problem will be solved by April of next year. The last time that Japan had a positive GDP deflator was 1997, when the consumption tax was raised to 5%, from 3%. Prime Minister Yoshihiko Noda is currently trying, with limited success, to push a 10% consumption tax through Parliament.

At 8:30 a.m., stock index futures were mixed. Dow (^DJI) futures fell 0.05% to 13,218.00 and S&P 500 (SPY) futures were down by 0.11% at 1,411.50. Futures on the Nasdaq (^IXIC) were positive, rising 0.13% to 2,767.00.

Clothing retailer Gap Inc. (GPS) reported a 40% increase in earnings in the fiscal second quarter, which ended on July 28. Earnings per share of $0.49 beat analyst estimates, but shares only rose 0.17% as the company issued guidance of $1.95-$2.00 for the full year, a few cents below expectations. Kirkland's (KIRK) shares declined by 6% after the home decor company posted worse-than-expected sales.

BankUnited (BKU), a once-bankrupt Florida bank currently owned by a collection of private equity firms, might sell to Toronto-Dominion Bank (TD) and BB&T Corp (BBT). TD Bank has made a concerted effort to expand in the US by acquiring troubled savings and loans.

Facebook (FB) shares rose 1% in the pre-market after hitting record lows yesterday. The lockup period for some investors ended yesterday, increasing the number of shares available on public markets by 60%.

Yahoo (YHOO) is reportedly searching for a COO to play second fiddle to its products-guru CEO Marissa Mayer. Kara Swisher of AllThingsD reports that Yahoo is looking for an executive with turnaround experience, and might consider choosing someone from outside of the tech industry.

The coveted Wall Street bonus will rise moderately, according to Johnson Associates, a compensation consulting firm. Traders are expected to see the biggest gains, while cuts are expected in investment banks, especially those that are embroiled in the LIBOR-fixing scandal and other high-profile errors. Barclay's (BCS) has already paid out $450 million to settle allegations of fixing the most important interest rate benchmark in the world, and several other banks are also being investigated for possible manipulation of LIBOR.

Twitter: @vincent_trivett
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