Morning Report: Futures Flat With Mixed Foreign Markets

By Bryan McCormick

US stock index futures are roughly flat after Asian markets finished mostly lower overnight, with the exception of Hong Kong, which was fractionally higher.

The resource company "super tax" issue in Australia came back to the fore. Last week Prime Minister Kevin Rudd, who had championed the tax, lost the leadership of the Labor Party as a result of the backlash over the issue. His successor, Julia Gillard, had promised to significantly modify this tax, and negotiations had begun with several of the mining firms. The Greens Party has threatened to block any dilution of the tax, so we may see those companies active again this morning.

European markets have turned higher after a weak start as the G-20 failed to act on special bank levies, furthering the summit's general tone of inaction. A target of reducing deficits by half by 2013 in the industrialized nations was issued, while simultaneously noting that there would be flexibility for additional stimulus. Both China and the United States had insisted that such steps were still necessary.

The market reaction this morning suggests that these twin goals have essentially canceled one another out, leaving few immediate threats to trading. Financial stocks have rallied in the eurozone but not in the United Kingdom, where the overall tone is weaker.

In currencies, the US dollar has gained against its basket, reducing some of the losses taken ahead of this weekends meetings. Crude oil prices have fallen after a storm in the Gulf of Mexico weakened and bypassed most operational rigs.

Commodities are a mixed bag this morning, largely because of fluctuations in the dollar. There could be a relief rally if the belief that the worst has passed as far as immediate global austerity measures are concerned.

In earnings today, there is just one company set to report, Micron Technology (MU). Traders focus on Micron as a bellwether for memory market health in the semiconductor sector. Tomorrow we will hear from General Mills (GIS).

Disclosure: No positions