US markets are following their overseas counterparts lower this morning amid a deluge of central bank, economic and corporate announcements. Dow and S&P futures are trading down about 0.8% with NASDAQ futures down about 0.4% cushioned by positive earnings from Facebook (NASDAQ:FB) and other technology companies overnight.
We could see significant action in a number of stocks this morning on both sides of the border. Facebook rallied in aftermarket trading after posting EPS of $0.77 way above the $0.62 street estimate. First Solar (NASDAQ:FSLR), on the other hand declined on news of an upcoming change in CEO. Symantec (NASDAQ:SYMC) may come under pressure after surprising the street with next its CEO is stepping down, cutting guidance and postponing its analyst day.
In Canada today, Bombardier (TO:BBDb) is in the spotlight once again after the company confirmed that it has won a big $5.6 billion order for 125 CSeries jets from Delta Air Lines (NYSE:DAL) (75 firm and 50 options). Potash, on the other hand, cold come under pressure after missing on earnings and cutting guidance. BCE (TO:BCE) beat the street.
Mixed earnings reports from big integrated oils may also attract attention today. Suncor’s results were worse than expected but the company boosted production guidance. ConocoPhillips (NYSE:COP) results were not as bad as feared but the company cut capex spending again.
Overseas and forex trading overnight and this morning have been dominated by the swift and severe reaction to the Bank of Japan’s decision to maintain current interest rate policy to give it more time to assess how the recent introduction of negative interest rates is working. This was a hawkish surprise to the street as many traders had been looking for another big stimulus package. The news sent JPY soaring over 2% (which is a huge move in a day in forex, like a 20% move in a stock) against USD, CAD, EUR, AUD and other major currencies. The JPY rally crushed Japanese stocks sending the Nikkei down 3.6%.
Japan isn’t the only country to see its currency soar overnight. NZD has gained 1.6% against USD after the Reserve Bank of New Zealand maintained its overnight rate as well surprising some who had been hoping for a rate cut. The RBNZ left the door open to a future rate cut but didn’t say when and tried to talk down the dollar a bit but didn’t make any serious threats so the street took the statement as neutral and more hawkish than expected.
Meanwhile, yesterday’s FOMC announcement dropped concerns about overseas economies and financial markets and took a neutral tone leaving the door open to a June rate hike, and Brazil’s central bank held rates steady through the country’s political crisis. Overall, these decisions suggest that the recent cycle of monetary easing is winding down and that pendulum is starting to swing back in a less dovish direction toward neutrality at least. This change continues to take pressure off USD which could help to boost the earnings prospects for US exporters and multinationals in coming quarters.
There’s more news on the way that could move the markets today. In particular the first crack at US Q1 GDP may attract significant attention and could start to influence Fed June meeting speculation on US indices and USD.