Benzinga Market Primer, Wednesday May 8

Futures Flat On Strong Chinese Trade Data

U.S. equity futures traded flat in early pre-market trade despite China reporting a rise in its trade balance in April. China reported that its trade balance swung back to a surplus in April of $18.16 billion vs. a deficit of $0.88 billion in March. Economists were expecting a surplus of $15.05 billion and the beat was driven by better than expected export growth, as exports grew 14.7 percent, better than the 10.3 percent expected.

Top News

In other news around the markets:

• Manchester United PLC MANU has announced that its manager, Sir Alex Ferguson, the most successful manager in English soccer history, is set to retire at the end of this season having won the Barclays Premier League for a record 20th time.


• Chinese gold imports more than doubled in March to a record high before the slump in gold prices. Analysts now expect imports to grow further as prices have fallen sharply since then.


• Reuters reported that the European Central Bank is considering buying bad loans from banks in crisis-stricken nations in southern Europe to relieve stresses on banks in an effort to spur more lending to small and medium enterprises (SME's).


• S&P 500 futures were flat at 1,620.60.


• The EUR/USD was higher at 1.3116.


• Spanish 10-year government bond yields fell 2 basis points to 4.09 percent.


• Italian 10-year government bond yields fell 1 basis point to 3.86 percent.


• Gold rose 0.37 percent to $1,454.10 per ounce.

Asian Markets

Asian shares were higher following the better than expected Chinese trade data. The Japanese Nikkei Index rose 0.74 percent and the Shanghai Composite Index rose 0.48 percent while the Hang Seng Index gained 0.86 percent. Also, the Korean Kospi rose 0.11 percent and Australian shares added 1.09 percent.

European Markets

European shares were modestly higher following continued earnings momentum globally as well as following the positive sentiment from Asia on the back of the Chinese trade data. The Spanish Ibex Index rose 0.05 percent and the Italian FTSE MIB Index gained 0.2 percent. Meanwhile, the German DAX added 0.22 percent and the French CAC 40 rose 0.42 percent while U.K. shares gained 0.09 percent.

Commodities

Commodities were mixed as energy futures traded near flat and metals traded mostly higher. WTI Crude futures rose 0.04 percent to $95.66 per barrel and Brent Crude futures fell 0.19 percent to $104.20 per barrel. Copper futures rallied 0.73 percent to $332.65 per pound on the Chinese data. Gold was higher and silver futures declined 0.17 percent to $23.77 per ounce.

Currencies

Currency markets were quiet overnight with moves in major pairs constrained. The EUR/USD was higher at 1.3116 and the dollar fell against the yen to 98.92. Overall, the Dollar Index fell 0.12 percent on weakness against the euro, the yen, and the Swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Tuesday include:

• Disney DIS reported first quarter EPS of $0.79 vs. $0.76 expected on revenue of $10.6 billion vs. $10.48 billion expected.


• Discovery Communications DISCA reported first quarter EPS of $0.63 vs. $0.65 on revenue of $1.16 billion vs. $1.15 billion.


• Marathon Oil Corp. MRO reported first quarter EPS of $0.51 vs. $0.72 on revenue of $4.11 billion vs. $4.25 billion.


• Molson Coors Brewing Co. TAP reported first quarter EPS of $0.30 vs. $0.34 on revenue of $828.5 million vs. $854.16 million.


• TripAdvisor TRIP reported first quarter EPS of $0.50 vs. $0.46 on revenue of $229.9 million vs. $223.76 million.

Pre-Market Movers

Stocks moving in the pre-market included:

• Disney DIS shares fell 0.86 percent pre-market following its first quarter earnings release.


• Marathon Oil MRO shares fell 1.66 percent pre-market following its weaker first quarter earnings report.


• Caterpillar CAT shares fell 0.09 percent pre-market despite the better than expected Chinese trade data.


• U.S. Steel X shares fell 0.66 percent pre-market on fears of future Chinese steel imports following the trade data.

Earnings

Notable companies expected to report earnings Wednesday include:

• AOL AOL is expected to report first quarter EPS of $0.35 vs. $0.22 a year ago.


• CF Industries CF is expected to report first quarter EPS of $6.02 vs. $6.06 a year ago.


• Liberty Media Corp. LMCA is expected to report first quarter EPS of $0.32.


• Sodastream SODA is expected to report first quarter EPS of $0.54 vs. $0.48 a year ago.


• Toyota Motor Corp. TM is expected to report fourth quarter EPS of $1.76. vs. $0.94 a year ago.


• Vivus VVUS is expected to report a first quarter loss of $0.51 per share vs. a loss of $0.20 per share a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications are due out and Fed Governor Jeremy Stein is set to speak. Also, the Treasury is set to auction 10-year notes. Overnight, Chinese inflation data, the ECB Monthly Report, and British Industrial Production data are all expected followed by the Bank of England's interest rate decision.

Good luck and good trading.