EU stock futures drop before US jobs data
European stock futures declined as investors awaited the last U.S. monthly jobs report before Presidential elections next week. U.S. index futures were little changed, while Asian shares rose.
HSBC Holdings Plc and Deutsche Bank AG may move as they are among lenders that will be required by global regulators to increase capital. Royal Bank of Scotland Group Plc (RBS) may drop after the UK's biggest governmentowned lender reported thirdquarter loss that exceeded analyst estimates. Alcatel-Lucent SA may move after posting a loss narrower than analyst projections.
Futures on the Euro Stoxx 50 Index expiring in December fell 0.3 percent to 2,523 at 7:33 a.m. in London. Futures on the UK's FTSE 100 Index (UKX) slipped 0.2 percent. The benchmark Stoxx Europe 600 Index rallied the most in two weeks yesterday after U.S. economic reports, including the payrolls data from ADP Research Institute, beat estimates. Standard & Poor's 500 Index futures lost 0.1 percent, while the MSCI Asia Pacific Index added 0.8 percent.
"The improved ADP number has raised expectations that today's non-farms number will be equally as good," said Michael Hewson, a market analyst at CMC Markets Plc in London. "Today's release of the latest payrolls report for October could well be the piece of data that makes a difference as to who manages to get their hands on the keys to the White House in next week's Presidential election."
The Stoxx 600 has climbed 1.2 percent so far this week as data from China and the U.S. indicated the global economic recovery is on track and as companies reported better-than- forecast earnings. The gauge has rallied 17 percent from this year's low on June 4 low.
In the US, Labor Department figures to be released at 8:30 a.m. in Washington may show unemployment rose in October from a three-year low. The jobless rate climbed to 7.9 percent from 7.8 percent in September, economists forecast in a Bloomberg survey. Payrolls will gain 125,000, from 114,000 a month earlier, economists said in a separate survey. The report may also show private payrolls, which exclude government jobs, climbed by 123,000 in October after rising 104,000 the prior month, according to a Bloomberg survey. It will be the last of the monthly jobs reports before Barack Obama and Mitt Romney face off in the Nov. 6 polls.
Of the 164 companies in the Stoxx 600 that have reported earnings so far this season, 88 have exceeded estimates, while 74 have missed them, data compiled by Bloomberg show.
HSBC and Deutsche Bank may move after an updated list published yesterday by the Financial Stability Board showed that the lenders are among firms that will be asked to set aside a capital surcharge of 2.5 percent.
RBS may be active after the lender said third-quarter net loss was 1.38 billion pounds ($2.22 billion) after setting aside 400 million pounds more to compensate clients wrongly sold loan insurance. Analysts had forecast a loss of 276 million pounds. The net loss includes a 1.5 billion-pound accounting loss on the fair value of RBS's debt.
Alcatel-Lucent may be active after the French phoneequipment maker said thirdquarter net loss was 146 million euros ($188 million), beating the average analyst estimate calling for a loss of 149.1 million euros. Sales declined 2.8 percent to 3.6 billion euros, compared with the 3.55 billion- euro average estimate.