Retailer Gap looks to be heading for a big day with a gain of 19.4% premarket adding to yesterday’s 6.9% advance. Earnings per share crushed expectations ($0.72 vs street $0.58). Management indicated the holiday quarter is off to a strong start and raised guidance. On the other hand, Intuit is down 2.8% premarket despite an earnings beat as guidance fell short of expectations. Today is quiet for earnings, next week’s slate is dominated by mid cap US retailers and technology/communications companies. Canadian banks report the first week of December.
Flash PMI surveys have been rolling out over night. Results from Europe have been disappointing across the board, coming in below expectations, below 50 in contraction territory or down from last month. Asia Pacific results, mainly Australia and Japan, were very mixed. US Flash Manufacturing PMI (street 48.8) and Flash Service PMI (street 55.3) reports are due at 9:45 am this morning.
UK retail sales were also disappointing (2.4% vs street 3.4%). Canada headline retail sales were in line at 0.4% but retail sales excluding autos were strong (0.9% vs street 0.5% and previous -0.8%). Retail sales remain in the spotlight next week heading into Black Friday.
In response to the weak European Flash PMI numbers and with the Ukraine conflict worsening this week, investors appear to be rotating capital into defensive havens. The US Dollar is up 0.4%-0.6% against the Euro and Pound. Meanwhile, Gold and Silver are both up about 0.7%, and the Yen is up 0.2%. The Loonie is holding steady today. A rising greenback has put a headwind in front of commodities with US Crude Oil down 0.8%, Natural Gas down 4.3% and Copper down 1.0%.
Currency moves also appear to be impacting equity markets. European bourses are rallying as their currencies fall with the Dax up 0.6% and the FTSE up 1.1%. US index futures, on the other hand, are flat to down 0.2%.