Benzinga Market Primer: Friday, April 26
Futures Lower Ahead of GDP
U.S. equity futures traded lower in early pre-market trade ahead of the key U.S. first quarter GDP report due out at 8:30 am eastern. Economists surveyed by Bloomberg are expecting a growth rate of 3.1 percent in the first quarter with the range of estimates between 2.3-3.3 percent. This would be a staunch improvement from the fourth quarter's 0.4 percent growth.
In other news around the markets:
- The Bank of Japan released its updated economic forecasts at its interest rate meeting overnight, estimating 2.9 percent growth for fiscal year 2013 and 2014 vs. 2.3 percent previously and sees the BoJ achieving 1.9 percent inflation by 2015 or 2016.
- The China MNI Business Sentiment Index rose to 58.6 in April from 58.2 in March, showing that businesses and managers are still rather optimistic about the Chinese economy despite recent weak data.
- Archer Daniels Midland (NYSE: ADM) increased its bid for Australian company Graincorp to $4.3 billion, making the deal a near certainty to go through according to analysts.
- S&P 500 futures slid 5.5 points to 1,576.20.
- The EUR/USD was flat at 1.3011.
- Spanish 10-year government bond yields rose 5 basis points to 4.34 percent.
- Italian 10-year government bond yields rose 7 basis points to 4.13 percent.
- Gold rose 0.03 percent to $1,462.50 per ounce, retracing nearly 50 percent of its losses since its recent slide from above $1,600 per ounce to below $1,400.
Asian shares were mostly lower overnight on disappointing forecasts from the Bank of Japan as well as no increase in its easing policy while inflation data showed that policy in Japan has had no impact as of yet. The Japanese Nikkei Index fell 0.3 percent and the Shanghai Composite Index fell 0.97 percent while the Hang Seng Index rose 0.65 percent. Also, the Korean Kospi fell 0.36 percent while Australian shares declined 0.1 percent.
European shares gave back gains from earlier this week but peripheral shares were still up more than 4 percent on the week. The Spanish Ibex Index fell 0.94 percent while the Italian FTSE MIB Index fell 0.71 percent. Meanwhile, the German DAX slid 0.63 percent while the French CAC 40 declined 1.12 percent and U.K. shares fell 0.56 percent.
Commodities were mostly weaker overnight, giving back strong gains from earlier this week driven by the weaker than expected Japanese inflation data. WTI Crude futures fell 0.83 percent to $92.86 per barrel and Brent Crude futures fell 0.62 percent to $102.77 per barrel. Copper futures fell 0.57 percent to $322.40 after seeing a nice run this week from recent lows. Gold was slightly higher and silver futures declined 0.34 percent to $24.10.
Currency markets were rather quiet overnight save for yen crosses as the yen strengthened on the back of the Bank of Japan disappointment. The EUR/USD was flat at 1.3011 and the dollar fell 0.59 percent against the yen to 98.67. Overall, the Dollar Index fell 0.07 percent on weakness against the yen, the Swiss franc and the pound.
Earnings Reported Yesterday
Key companies that reported earnings Thursday include:
- Amazon (NASDAQ: AMZN) reported first quarter EPS of $0.18 vs. $0.09 on revenue of $16.07 billion vs. $16.16 billion expected. However, second quarter guidance was slightly weaker than expected.
- Biogen Idec (NASDAQ: BIIB) reported first quarter EPS of $1.97 vs. $1.59 on revenue of $1.4 billion vs. $1.41 billion expected.
- Colgate-Palmolive (NYSE: CL) reported in-line EPS of $1.32 on revenue of $4.32 billion vs. $4.3 billion expected.
- Expedia (NASDAQ: EXPE) reported first quarter EPS of $0.25 vs. $0.23 on revenue of $1.01 billion vs. $967.4 million estimate.
- Lear Corp. (NYSE: LEA) reported first quarter EPS of $1.30 vs. $1.09 on revenue of $3.95 billion vs. $3.68 billion expected.
- 3M (NYSE: MMM) reported first quarter EPS of $1.61 vs. $1.66 on revenue of $7.63 billion vs. $7.81 billion expected.
- Potash (NYSE: POT) reported first quarter EPS of $0.63 vs. $0.61 on revenue of $2.1 billion vs. $1.85 billion expected.
- Starbucks (NASDAQ: SBUX) reported in-line second quarter EPS of $0.48 on revenue of $3.56 billion vs. $3.58 billion expected.
- ExxonMobil (NYSE: XOM) reported first quarter EPS of $2.12 vs. $2.05 expected on revenue of $108.8 billion vs. $119.83 billion expected.
Stocks moving in the pre-market included:
- J.C. Penney (NYSE: JCP) rose 7.15 percent pre-market after George Soros reported a 7.9 percent stake in the company despite another executive leaving the company.
- Amazon (NASDAQ: AMZN) shares declined 3.2 percent pre-market following the weaker than expected guidance.
- Expedia (NASDAQ: EXPE) shares declined 5.34 percent pre-market after reporting better than expected earnings.
- Archer Daniels Midland (NYSE: ADM) shares declined 0.36 percent after the company boosted its bid for Australia's Graincorp to $4.3 billion.
Notable companies expected to report earnings Friday include:
- Chevron (NYSE: CVX) is expected to report first quarter EPS of $3.06 vs. $3.17 a year ago.
- D.R. Horton (NYSE: DHI) is expected to report first quarter EPS of $0.19 vs. $0.13 a year ago.
- V.F. Corp. (NYSE: VFC) is expected to report first quarter EPS of $2.18 vs. $1.94 a year ago.
- Weyerhaeuser (NYSE: WY) is expected to report first quarter EPS of $0.22 vs. $0.02 a year ago.
On the economics calendar Friday, the first look at U.S. first quarter GDP is expected as well as consumer sentiment data later.
Good luck and good trading.
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