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Pre-Market Primer: Stocks Flat Ahead of Consumer Confidence

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Plus, Japanese households are showing their willingness to spend as unemployment falls

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Stock futures are pointed toward a negative open this morning as investors await consumer confidence and housing indicators.

Dow (INDEXDJX:.DJI) futures are off 0.03% at 14,743 and S&P (INDEXSP:.INX) futures ticked down 0.09% to 1,586.80. Futures on the Nasdaq (INDEXNASDAQ:.IXIC) were dead flat at 2,858.75.

Later this morning, the Conference Board will publish its reading of consumer confidence for April. The index is expected to rise 2.3 points to 62 this month. Yesterday, we found that incomes lagged behind estimates and only rose 0.2% in March and consumer spending rose by just as much. The S&P Case-Shiller Home Price Index will also hit the wires. Economists predict that the index will show a 1% month-over-month rise in home prices in the 20 cities that it tracks in February.

Asian markets were mostly lower overnight after Japan released a mixed bag of economic data. PMI showed a better-than-expected expansion of 51.1 in manufacturing. (Readings over fifty signal growth in the sector.) Also surprising on the upside were household spending, which jumped 5.2% year-over-year, and the unemployment rate, which fell 0.2 percentage points to 4.1%. Industrial production fell 6.1% (a drop of 7.2% was expected). On the down side, retail sales unexpectedly sank 0.3%. The rise in spending and fall in unemployment reflects improving confidence in Japan as the government embarks on a radical plan to jolt the economy back to life with fiscal and monetary stimulus.

Unemployment in the eurozone hit an all-time high of 12.1% in March, falling in line with expectations. Austria had the lowest unemployment at 4.7% and Greece took the worst spot with 27.2% (in January, the latest available figure), followed closely by Spain with 26.7%. From last year, 19 European Union member states saw their unemployment rates rise. Also, consumer price inflation slowed on a yearly basis in the eurozone. The flash reading of CPI for April showed that prices rose only 1.2% year-over-year. Increasing unemployment and slowing inflation provide a backdrop for Thursday's European Central Bank announcement; the ECB is widely expected to cut rates to mitigate the situation.

In corporate news, beverage conglomerate Anheuser-Busch InBev (NYSE:BUD) saw adjusted earnings fall to $3.43 billion as a slowdown in Brazil hurt revenues. Sales in China rose 16%.

Herbalife (NYSE:HLF) beat expectations for first-quarter earnings, booking earnings per share of $1.10 as revenue climbed 17% yearly to $1.1 billion. The company has faced criticism from high-profile hedge fund manager Bill Ackman, who claims that it is a pyramid scheme. Shares rose slightly, as the company forecast weaker growth than expected for the current quarter.

Buffalo Wild Wings (NASDAQ:BWLD) shares fell 2% in the pre-market after it reported earnings of $0.87 per share, missing estimates by $0.12. The chain restaurant said that same-store sales are improving, gaining 5.2% this month.


Twitter: @vincent_trivett
No positions in stocks mentioned.
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