LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.22% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down by 0.10%, after US lawmakers agreed a temporary deal to reopen government until January 15 and extend the debt ceiling until February 7, but failed to agree on budgetary issues, suggesting that a re-run of this week’s events is likely early in 2014. The budgetary shutdown is estimated to have cost the US economy $24bn, and CNN’s Fear & Greed Index is expected to open at 43 this morning — still in the fear zone — after closing at 35 yesterday.
European markets were unimpressed by the news from Washington, and edged lower through the morning. Amongst the biggest movers was Dutch cellular operator Royal KPN, which fell almost 8% after Carlos Slim’s America Movil SAB withdrew its bid for the firm. At 7am ET, the FTSE 100 was down 0.12%, the DAX was down 0.46%, and the CAC 40 was down 0.34%.
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US federal agencies will reopen today, but it may be a few days before the backlog of economic reports which were delayed by the government shutdown become available. Today’s key report, the weekly jobless claims report, is due at 8.30am and is expected to show 335,000 new unemployment claims last week, down from 374,000 the previous week. September’s housing starts, building permits, industrial production and capacity utilization reports — all due today — are all expected to be delayed.
Given the lack of economic data, investors’ attention may return to corporate news today. Earlier this morning, UnitedHealth Group reported a 0.8% increase in third-quarter earnings and said that it had added 500,000 new members in the last quarter, taking its membership to 89.7m. Amongst the other companies due to report before markets open this morning is Goldman Sachs, which is expected to report third-quarter earnings of $2.43 per share on revenue of $7.36bn, according to consensus forecasts. Other big names scheduled to report before the bell include Verizon, Peabody Energy, Philip Morris International and Union Pacific, while Google is due to report after the close.
IBM was down by 6.2% in pre-market trading and may be actively traded when markets open, after the tech firm’s sales missed expectations on Wednesday, falling for the sixth consecutive quarter. Internet auction giant eBay was down 4.2% in pre-market trading, and may also be out of favour today, after it reported a surprise fall in US sales over the last quarter.
