A number of stories affected overnight trading in European and Asian equities. The Chinese government announced that they were taking over all coal consumption in the country, which is harmful to coal producers here in the US. Italian politician Matteo Renzi made a push for early elections that would expedite the exit of current Prime Minister Enrico Letta. The Italian FTSEMIB (INDEXBIT:FTSEMIB) declined for the first time in seven days in today's session.
The January retail sales report posted some worrisome declines in spending. Sales fell 0.4% month-over-month, worse than the expectations that the number would be unchanged. Sales grew 2.6% year-over-year, the slowest rate of growth since 2009. The December 2013 retail sales report was also revised down to a -0.1% monthly growth rate from the prior estimate of +0.2%, which caused many economists to revise down their fourth-quarter GDP growth forecast.
US stocks had an extremely volatile day following five very strong days. S&P 500 (INDEXSP:.INX) futures fell by 14.75 points in the pre-market following the poor retail sales report before mounting a serious rally into the day's end and finishing the session in the positive. Utilities stocks led the day, thanks to a strong rally in US Treasuries. The 10-year Treasury yield declined by six basis points today to 2.73%
It was announced early this morning that Comcast (NASDAQ:CMCSA) would acquire Time Warner Cable (NYSE:TWC) for $45.2 billion in common stock, or roughly $158 per share. Each Time Warner shareholder will receive 2.875 shares of Comcast stock, though the deal is still subject to approval by regulators. Charter Communications (NASDAQ:CHTR) had made a number of offers for Time Warner over the past four months and was hit hard in today's session.
Natural gas futures rose by 7.76% in today's session following a very strong inventory report from the EIA. Stockpiles fell by 237 billion cubic feet in the past week, more than the 227 to 232 bcf draw that had been expected by analysts.
Tomorrow morning the initial estimate of the February University of Michigan/Reuters consumer confidence index will be released. Economists expect the index to fall marginally to 80.5 from 81.2 in the month prior. Also scheduled to be reported tomorrow is January industrial production, which is expected to rise 0.3% from the month prior. Lastly, the January import/export price indices will be released early in the morning.
The main event tomorrow is the preliminary fourth-quarter GDP estimates in the major eurozone countries. The broader 17-nation (sans Latvia, which was recently added) growth will be reported at 10:00 a.m. GMT, but France, Germany, and Italy will be reported individually in the hours leading up to it. China is scheduled to release producer and consumer inflation figures from January overnight.
The only notable earnings report scheduled for tomorrow morning is Campbell Soup (NYSE:CPB).
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