Benzinga Market Primer: Tuesday, April 23

Futures Lower on Weak Chinese, German Data

U.S. equity futures traded lower in pre-market trade following weak data out of China and Germany. However, European shares traded higher on hopes of an ECB rate cut.

Top News

In other news around the markets:

• The Flash Chinese HSBC Manufacturing PMI for April fell to 50.5 from 51.6 in March on expectations of a reading of 51.4.


• The German Manufacturing PMI slipped to 47.9 from 49.0 on expectations of a reading of 49.0 while the Services PMI declined to 49.2 from 50.9 on expectations of a reading of 51.


• S&P warned that Japan's new stimulus measures risk a 1/3 chance of a downgrade form its current AA- while Moody's warned that lower long-term rates risk downgrades for Japanese life insurers.


• S&P 500 futures fell 1.4 points to 1,554.50.


• The EUR/USD was lower at 1.2988.


• Spanish 10-year government bond yields declined to 4.43 percent from 4.49 percent.


• Italian 10-year government bond yields fell to 4.0 percent from 4.09 percent, the lowest since November 2010.


• Gold fell 0.35 percent to $1,416.20 per ounce.

Asian Markets

Asian shares were lower overnight following weakness in China and yen strength. The Japanese Nikkei Index fell 0.29 percent and the Shanghai Composite Index lost 2.57 percent while the Hang Seng Index lost 1.08 percent. Also, the Korean Kospi declined 0.4 percent and Australian shares gained 1.00 percent on stronger leading indicators.

European Markets

European shares were higher in early trade on comments from ECB President Mario Draghi which hinted at an imminent rate cut. The Spanish Ibex Index rose 1.32 percent and the Italian FTSE MIB Index gained 1.01 percent. Meanwhile, the German DAX gained 0.48 percent and the French CAC 40 rose 1.47 percent while U.K. shares rose 0.81 percent.

Commodities

Commodities were lower overnight but rebounded from session lows following the weak global PMI data. WTI Crude futures declined 0.96 percent to $88.33 per barrel and Brent Crude futures lost 1.13 percent to $99.26 per barrel. Copper futures fell 1.45 percent to $309.85 per pound on Chinese weakness. Gold was lower and silver futures declined 2.39 percent to $22.82 per ounce.

Currencies

Currency markets were in flux overnight as the euro fell and the yen strengthened. The EUR/USD was lower at 1.2988 and the dollar fell against the yen to 98.68. Overall, the Dollar Index gained 0.34 percent on strength against the euro, the pound, the Swiss franc, and the Canadian dollar.

Earnings Reported Yesterday

Key companies that reported earnings Monday include:

• Caterpillar CAT reported first quarter EPS of $1.31 vs. $1.45 expected on revenue of $13.21 billion vs. $13.81 billion expected


• Halliburton HAL reported first quarter EPS of $0.67 vs. $0.57 expected on revenue of $6.97 billion vs. $6.88 billion expected.


• Netflix NFLX reported fourth quarter EPS of $0.31 vs. $0.18 expected on in line revenue.


• Rogers Communication RCI reported first quarter EPS of $0.80 vs. $0.75 on revenue of $1.76 billion vs $3.09 billion expected.


• Texas Instruments TXN reported first quarter EPS of $0.32 vs. $0.30 expected on revenue of $2.89 billion vs. $2.85 billion.

Pre-Market Movers

Stocks moving in the pre-market included:

• Netflix NFLX shares rose 22.76 percent pre-market following the strong earnings report, raised guidance, and new products.


• Facebook FB shares declined 0.82 percent pre-market as investors await the Timeline patent lawsuit decision.


• Bank of America BAC shares rose 1.37 percent pre-market despite insider selling reported Monday.


• Carnival Corporation CCL rose 0.42 percent pre-market despite a downgrade from Nomura Monday.

Earnings

Notable companies expected to report earnings Tuesday include:

• Apple AAPL is expected to report second quarter EPS of $10.13 vs. $12.30 a year ago.


• Amgen AMGN is expected to report first quarter EPS of $1.84 vs. $1.61 a year ago.


• Cree Inc. CREE is expected to report third quarter EPS of $0.34 vs. $0.20 a year ago.


• Juniper Networks JNPR is expected to report first quarter EPS of $0.21 vs. $0.16 a year ago.


• Panera Bread PNRA is expected to report first quarter EPS of $1.65 vs. $1.40 a year ago.


• Yum! Brands YUM is expected to report first quarter EPS of $0.57 vs. $0.67 a year ago.

Economics

On the economics calendar Tuesday, the Redbook is due out followed by the U.S. Flash PMI, the FHFA Home Price Index, New Home Sales, and the Richmond Fed Manufacturing Index. Also, the Treasury is set to auction 4-week bills and 2-year notes. Overnight, the RBNZ rate decision is expected as well as the German IFO Business Climate Index.

Good luck and good trading.