Today's new economic data is likely to be closely watched. First up is the ICSC-Goldman Sachs weekly chain-store sales index at 7:45 a.m., followed by the second-quarter current account balance at 8:30 a.m. EDT September's homebuilders' index is due at 10 a.m. EDT and is expected to show a rise from 37 to 38.
However, this new data is likely to be overshadowed by disappointing earnings from FedEx, which has already warned investors that first-quarter earnings are likely to be lower than in the same period last year. Consensus forecasts are for $1.40 per share, down from $1.46 last year. Concerns are growing that this will mark the beginning of a run of falling corporate profits as cost-cutting measures run out of steam and a lack of real growth hits home.
In addition to FedEx, companies that could be actively traded today include U.K. soccer team Manchester United, which is due to post its first quarterly figures, and Apple, whose shares approached $700 yesterday after it revealed that it had already received 2 million orders for the iPhone 5. Also worth watching is Advanced Micro Devices, whose share price fell more than 12% in after-hours trading last night after the company's chief financial officer resigned.
European markets headed straight south this morning. At 7 a.m. EDT, the DAX was down 1%, the CAC was down 1.1%, the FTSE MIB was down 2%, and the IBEX was down 1.8%. After rising yesterday, Spain's 10-year bond yields retreated below 6% again after the country held a successful auction of 12- and 18-month bonds, but tension is rising over when the country will capitulate and ask for a bailout, which is seen by most investors as necessary.
There was more bad news in Greece, where the country's finance minister, Yannis Stournaras, admitted to reports that the country would miss its deficit reduction targets because its recession is much worse than expected: The Greek economy is expected to be 25% smaller by 2014. Greece's deficit is now expected to reach 1.5% of GDP by the end of 2012, instead of the targeted 1%. Stournaras emphasised the need for Greece to accelerate privatizations, tax reforms, and other structural changes.
Finally, in London the FTSE 100 (FTSEINDICES:^FTSE) was down by 0.7% at 7 a.m. EDT as mining and financial shares retreated, reflecting the growth concerns now dominating the markets. The biggest faller was insurance giant Aviva, which dropped 4.5% after both Deutsche Bank and Bank of America Merrill Lynch cut their ratings on the company, citing falling valuations.
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