Equity Futures Point to Lower Open
Tue, Sep 7, 8:51 AM ET, by Scott V. Nystrom
Futures point to a lower opening on Wall Street after a long Labor Day weekend. President Obama proposes tax cuts and increased transportation spending to boost the economy. Market Preview Asian markets are mixed today. Hong Kong's Hang Seng index edged up 0.2 percent. Japan's Nikkei 225 dropped 0.8 percent and China's Shanghai Shenzen rose by 0.3 percent. European shares are down this morning, with the German DAX falling 0.7 percent. Britain's Footsie 100 was lower by 0.8 percent in mid-day trading. U.S. S&P 500 index futures were down by 0.5 percent in pre-market action. Crude oil is lower on Tuesday morning, trading just above $73 a barrel. Spot gold was flat in Tuesday morning trading, hovering around $1,247 an ounce. Economic Data On the economic front, consumer credit outstanding for July will be released on Wednesday. Credit contracted in both May and June. Economists are expecting further credit contraction of a minus $3.5 billion. On Thursday, initial jobless claims will be released with expectations for 470,000 new unemployment claims for the week of September 4th. International trade figures will also come out on Thursday. The trade gap spiked to nearly $50 billion in June. Analysts are expecting the July trade deficit to come in at $46.8 billion. President Proposes Tax Cut and New Spending President Obama is expected to propose a 100 percent investment tax credit for business for 2010 and 2011 estimated to increase the budget deficit by $200 billion. He will also propose a $50 billion boost in spending on transportation. The President will roll out his proposals to stimulate the economy in a Cleveland, Ohio speech on Wednesday. Earnings Forecasts Scaled Back Despite a successful second quarter earnings season, earnings projections have been scaled back over the past three months. In April, forecasters were expecting profits to grow by 20 percent in 2011. More recently, they have dialed back next year's earnings estimates to a 15 percent growth rate. Investors are concerned that earnings could be lowered further in the next few months if the economy continues to weaken. Earnings Preview It will be a slow week on the earnings front. On Wednesday after the market closes, Navistar International (NAV) is expected to post $1.36 earnings per share. Pep Boys (PBY) will also report on Wednesday after the close with analysts expecting 19 cents in profits per share. And on Friday before the open, athletic apparel maker Lululemon Athletica (LULU) will release earnings. The consensus number is 24 cents per share.
SDI Glossary: "Analyst" Definition
SDI Glossary: "Earnings" Definition
SDI Glossary: "Footsie" Definition
SDI Glossary: "Futures" Definition
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