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Pre-Market Primer: Earnings Off to a Wobbly Start, Beijing Thumbs Its Nose at Tokyo


We might be in for a rocky month of earnings announcements.

MINYANVILLE ORIGINAL Stock futures were hardly changed today after Alcoa (NYSE:AA) cut its forecast for global aluminium demand, raising concerns for the health of the economy.

The major US stock indices headed down yesterday when the IMF cut its estimates for global economic growth. Today, European and Asian shares mostly declined overnight and the euro fell as well. Spanish and Italian bonds came under pressure due to the weakening economy. Dow (INDEXDJX:.DJI) futures fell 0.07% to 13,403.00. S&P 500 (INDEXSP:.INX) futures gained 0.09% to 1,437.30, and Nasdaq (INDEXNASDAQ:.IXIC) futures dropped 0.11% to 2,774.50.

Industrial production in Italy and France grew by 1.7% and 1.5% on a monthly basis in August. Both countries saw industrial production fall from last year's levels.

A report on wholesale trade in the United States is expected to show that inventories grew by 0.4% in August, according to the consensus estimate of economists. The report is due out today at 10:00 a.m. EDT.

Earnings season came to an inauspicious start when Alcoa posted a third quarter loss of $143 million on one-time charges due to a bribery settlement . Excluding those items, adjusting earnings per share of $0.03, down from $0.15 last year, beat expectations.

Yum Brands (NYSE:YUM) raised its earnings outlook for the full year yesterday after reporting profits of $0.99 per share, beating expectations by $0.02. Despite China's faltering economy, brands such as Kentucky Fried Chicken thrived. Sales in China increased by 22%, helping the company's profits rise by 23% worldwide.

FedEx (NYSE:FDX) said that it will aim to cut costs to improve profitability by $1.7 billion over the next three years. The transport company will offer some US employees a voluntary buyout and modernize its aircraft.

Chevron (NYSE:CVX) shares could experience high volume trading as the energy company warned investors that its third quarter earnings were "substantially lower" than in the second quarter. Hurricane Isaac resulted in a drop in production for the company.

Zhou Xiaochuan, the governor of the People's Bank of China said that he will not be attending the IMF's and World Bank's meetings in Tokyo , where he was scheduled to give the keynote speech. This is seen as a deliberate diplomatic snub while the two countries grapple in a dispute over a few rocky islands.

Twitter: @vincent_trivett
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