Benzinga Market Primer, Wednesday July 17: Bernanke Is Back

Futures Lower Ahead of Bernanke Testimony In Congress

U.S. equity futures fell in early pre-market trade following some mixed earnings yesterday ahead of Ben Bernanke's first of two days of testimony on Capitol Hill. Today, he will speak to the House Financial Services Committee. For a full preview of Bernanke's testimony, read more here and here.

Top News

In other news around the markets:

• The number of people claiming unemployment in the U.K. in June fell much faster than expected, new data revealed. The British Claimant Count fell 21.2 thousand vs. the expected drop of 8 thousand while May's figure was revised lower to show a drop of 16.2 thousand from the previous estimate of 8.2 thousand.


• The minutes of the latest meeting of the Bank of England's Monetary Policy Committee were released and showed that the 9-member board voted 9-0 in favor of keeping the current policy. Previously, the vote was only 6-3 and the new-found consensus for less easing sent the pound higher.


• The minutes of the most recent meeting of the Bank of Japan were released and showed that the BoJ expects the economy to return to a modest recovery path and showed some contention to intervene in the bond markets to cap rate volatility as it could be seen as a change of policy.


• S&P 500 futures fell 3.6 points to 1,667.60.


• The EUR/USD was lower at 1.3146.


• Spanish 10-year government bond yields fell 1 basis point to 4.68 percent.


• Italian 10-year government bond yields fell 1 basis point to 4.45 percent.


• Gold fell 0.46 percent to $1,284.40 per ounce.

Asian Markets

Asian shares were mixed overnight with Chinese shares lagging on comments from a former high-ranking politician who said that the government could revise down its GDP target to 7 percent. The Japanese Nikkei Index rose 0.11 percent and the Topix Index gained 0.22 percent. In Hong Kong, the Hang Seng Index gained 0.28 percent while the Shanghai Composite Index dropped 1.01 percent in China. Also, the Korean Kospi rose 1.13 percent and Australian shares fell 0.09 percent.

European Markets

European shares were lower overnight on global growth fears ahead of Bernanke. The Spanish Ibex Index fell 1.01 percent (is now down 5.12 percent in the last month) and the Italian FTSE MIB Index fell 0.67 percent. Meanwhile, the German DAX dropped 0.47 percent and the French CAC 40 Index declined 0.53 percent while U.K. shares fell 0.4 percent.

Commodities

Commodities were mixed overnight as copper lagged on China fears. WTI Crude futures fell 0.74 percent to $105.22 per barrel and Brent Crude futures rose 0.28 percent to $109.40 per barrel. Copper futures fell 1.41 percent to $314.50 per ounce. Gold was lower and silver futures declined 0.88 percent to $19.76 per ounce.

Currencies

Currency markets were on the move again ahead of Bernanke as the pound gained and the dollar recouped some of yesterday's losses against other majors. The EUR/USD was lower at 1.3146 and the dollar rose against the yen to 99.63 while the pound gained against the dollar to 1.5191. Overall, the Dollar Index rose 0.12 percent on strength against the yen, the Canadian dollar, and the euro.

Earnings Reported Yesterday

Key companies that reported earnings Tuesday include:

• Johnson and Johnson JNJ reported second quarter EPS of $1.48 vs. $1.39 expected on revenue of $17.9 billion vs. $17.71 billion a year ago.


• Coca-Cola KO reported second quarter EPS of $0.63, in line, on revenue of $12.75 billion vs. $12.97 billion expected.


• Goldman Sachs GS reported second quarter EPS of $3.70 vs. $2.82 expected on revenue of $8.61 billion vs. $7.98 billion expected.
• CSX Corp. CSX reported second quarter EPS of $0.52 vs. $0.47 expected on revenue of $3.01 billion vs. $3.02 billion expected.


• Mosaic MOS reported fourth quarter EPS of $1.14 vs. $1.15 expected on revenue of $2.69 billion vs. $2.67 billion expected.


• Yahoo! YHOO reported second quarter EPS of $0.35 vs. $0.30 a year ago on revenue of $1.14 billion vs. $1.08 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• American Tower AMT shares fell 3.74 percent pre-market following a downgrade from buy to neutral at ISI Group.


• Zagg Inc.ZAGG shares fell 12.12 percent pre-market as the company lowered guidance for the second time this year.


• Meade Instruments MEAD shares rose 14.75 percent pre-market as the company terminated its merger agreement with Ningbo Sunny Electric.


• Realogy RLGY shares rose 0.43 percent as the company reported decent guidance and announced the sale of 25.125 million shares of stock by selling holders.

Earnings

Notable companies expected to report earnings Wednesday include:

• IBM IBM is expected to report second quarter EPS of $3.77 vs. $3.51 a year ago on revenue of $25.36 billion vs. $25.78 billion a year ago.


• Bank of America BAC is expected to report second quarter EPS of $0.25 vs. $0.19 a year ago on revenue of $22.79 billion vs. $21.97 billion a year ago.


• Intel INTC is expected to report second quarter EPS of $0.39 vs. $0.54 a year ago on revenue of $12.89 billion vs. $13.5 billion a year ago.


• American Express AXP is expected to report second quarter EPS of $1.22 vs. $1.15 a year ago on revenue of $8.3 billion vs. $7.96 billion a year ago.


• Abbott Labs ABT is expected to report second quarter EPS of $0.44 vs. $0.43 a year ago on revenue of $5.52 billion vs. $9.81 billion a year ago.


• eBay EBAY is expected to report second quarter EPS of $0.64 vs. $0.56 a year ago on revenue of $3.89 billion vs. $3.4 billion a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications and Housing Starts are out ahead of Ben Bernanke's testimony for the House Financial Services Committee. Also, the Beige Book is due out. Overnight, British retail sales are due out and Spain and France are set to auction bonds.

Good luck and good trading.

Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.

For a recap of Tuesday's market action, read Benzinga's daily market wrap here.