Benzinga Market Primer, Friday August 10
U.S. equity futures fell Friday following weak economic data in both China and Europe. Investors had been hoping that new economic data would be pointing to a bottom in the global economy, however the weak data dampens any hopes of a bottom. S&P 500 futures fell 4.5 points to 1396.10.
In news around the markets:
- Chinese trade balance plummeted in July, falling to 25.1 billion Chinese yuan from 31.7 billion in June and missing expectations of 35.1 billion.
- Fitch believes that the Spanish bank bailout may not be the last.
- The French budget deficit fell in June to -56.7 billion euros from -69.6 billion euros in May, a good sign for France's finances.
- French industrial production did not grow nor contract in June following 2.1 percent contraction in May on expectations of a 0.4 percent growth in IP.
- Manchester United (NYSE: MANU) priced its IPO at $14 per share, below the expected range but still on strong demand.
- EUR/USD fell to 1.2263.
- Spanish 10-year bond yields rose to 6.88 percent, 2-year bond yields rose to 4.067 percent.
- Italy 10-year bond yield rose to 5.902 percent, 2-year bond yields rose to 3.351 percent.
- Gold fell $7.50 to $1,612.70.
Asian shares were weak overnight following the Chinese trade data release. The Nikkei fell 0.97 percent and the Shanghai Composite Index fell 0.24 percent. However, the Korean Kospi Index bucked the trend and rose 0.3 percent as inflation fell and hopes of monetary easing rose. Europe was a sea of red as of writing, as shares from Madrid to Frankfurt all fell. The Spanish Ibex fell 1.04 percent following the Fitch report and Italy's MIB Index fell 0.54 percent. The French CAC 40 fell 0.78 percent on the weak IP data and the German DAX fell 0.46 percent.
Commodities were also weak on the poor economic data, as WTI Crude futures fell 1.2 percent to $92.24 per barrel and Brent Crude futures fell 1.27 percent to $111.78 per barrel. Copper futures fell 1.15 percent to $338.55 and silver futures fell 0.81 percent to $27.87 per ounce.
Currencies continued to reflect dollar strength Friday as the dollar index rose 0.14 percent to 82.75. The euro was weak for a second consecutive day, as the EUR/USD fell to 1.2269, the EUR/AUD rose (from record lows) to 1.1658, and the EUR/JPY fell to 96.23. The EUR/CHF fell to 1.2003, just 3 pips above the floor at 1.20 and closing in on levels where the Swiss National Bank has been seen buying euros to protect the floor.
It's Friday in the summer and so the earnings calendar is rather light. JC Penny (NYSE: JCP) reported a loss of $0.37 per shares on estimates of a $0.25 loss, revenues fell short of estimates, and the company slashed guidance. Later, Harman International (NYSE: HAR) is expected to report Q2 EPS of $0.64.
There is no important data of note on the economic calendar during New York trading. Good luck and good trading.
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