Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Pre-Market Primer: US Jobs Data Beats Expectations; Eurozone Crisis Rocks Markets as Portuguese Government Stumbles

By

Oil prices rose as Egypt's military prepares to depose Morsi.

PrintPRINT
Global stocks waned today on renewed fears of instability in Europe and Egypt, but positive US economic news could temper the worldwide sell-off.

In a preview of Friday's big BLS jobs report, payrolls processor ADP reported that private sector employment increased by 188,000 in June. Economists were expecting a smaller increase of 30,000 to 165,000. Initial jobless claims last week were also better than expected. Claims declined by 5,000 from the week before to 343,000, beating estimates by 2,000.

Another government report showed the US trade deficit widened by $4.7 billion to $45 billion in May.

More economic data comes after the opening bell. The Institute for Supply Management's non-manufacturing survey hits the wires at 10 a.m. Economists expect the services sector to have grown more robustly in June. The index is likely to rise to 54.5 from 53.7. (Readings over 50 indicate expansion.)

June composite PMI numbers released today showed a decline in the service and manufacturing sectors. China fell through the 50 threshold to 49.8, signaling the first contraction in business conditions in 10 months. Services booked an expansion at 51.3. Japan showed a smaller improvement. Composite PMI fell to 52.3 from 54.1 and services fell to 52.1 from 54.8. The European Union's contraction became less severe, rising 1 point to 48.7, but missed expectations. France rose 2.8 points to 47.4 and Germany actually improved slightly to 50.4.

Retail sales across the EU rose 1% on a monthly basis in May, but fell 0.1% year-over-year. France and Germany both rose 0.8%. Spain showed signs of stabilizing as sales rose 1.2% monthly, but fell 6.3% from 2012. Portuguese consumers bought 3.6% less than a year ago.

Political concerns overshadowed these indicators, however. European shares were rocked by renewed fears that Portugal's government might collapse following the finance minister's resignation. Vitor Gaspar quit the government, saying that he can't support the unpopular austerity agenda. Rumors circulated this morning that two more ministers might quit and protests in the capital called for prime minister Passos Coelho to step down.

The country's debt sold off overnight. Portugal's 10-year debt yield shot up to 8% from 6.5% Monday morning.

Stock markets were down across the board in Europe, with most indices declining more than 1%. Japan and China also sold off and US futures are set to decline before a shortened trading day.

Dow (INDEXDJX:.DJI) futures were off 0.44% at 14,796 this morning. Futures contracts on the S&P 500 (INDEXSP:.INX) fell 0.49% to 1,599.40 and Nasdaq (INDEXNASDAQ:.IXIC) futures dropped 0.54% to 2,907.50.

The political chaos in Egypt boosted oil prices over $100 today. As Egypt's military reportedly plans a coup against Mohammed Morsi's government, WTI futures are up 1.79% to $101.38. The army's ultimatum for Morsi to bow to protesters' demands is 11 a.m. New York time.

In corporate news, the board of Dell Inc. (NASDAQ:DELL) advised founder Michael Dell to raise his $24.4 billion offer to take the computer company public. Activist investor Carl Icahn promised a higher payout to shareholders.

Bloomberg reported that the Federal Communications Commission will approve the 78% acquisition of Sprint Nextel Corporation (NYSE:S) by Softbank Corp (USA) (OTCMKTS:SFTBF). The vote, according to their sources, was 2-1 in favor. It also approved Sprint's bid to buy the half of Clearwire Corporation (NASDAQ:CLWR) that it doesn't yet own.

Twitter: @vincent_trivett
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE