Benzinga Market Primer, Thursday July 19

U.S. equity futures rose Thursday on hopes of further Federal Reserve easing despite a weak Spanish auction. Stronger than expected earnings in the U.S. and Europe helped to boost bullish sentiment as well. Spanish yields, however, climbed with the benchmark 10-year yield rising back above the dreaded 7 percent level. S&P 500 futures rose 5.60 points to 1372.78 and NASDAQ futures rose 15.5 points to 2635.5.

In other news:

• German lawmakers are set to approve the Spanish bailout, with Merkel's coalition backing the deal.


• Italian industrial orders rose 1.7 percent in June, faster than the anticipated 0.5 percent rate of growth expected and reversing May's 1.8 percent contraction.


• Spain issued 2-, 5-, and 7-year bonds with yields rising to 5.204 percent, 6.456 percent, and 6.701 percent from 4.706 percent, 6.072 percent, and 4.832 percent respectively.


• France also issued bonds, selling 3-, 4-, and 5-year bonds with yields falling across the curve at auction.


• EUR/USD 1.2299.


• Spanish 10-year yield 7.025 percent.


• Italy 10-year yield 5.994 percent.

Asian shares rose overnight following strength on Wall Street. Chinese shares, measured by the Shanghai Composite Index, and the Nikkei in Japan both rose over 0.7 percent. Thai stocks were notably weak, falling 0.6 percent. In Europe, strength was seen across all major markets except for Italy's MIB. Stocks notably rallied in Spain and Germany on news that German politicians are expected to pass the Spanish bailout agreement.

Commodities rose with global stocks and on the weaker dollar Thursday. WTI Oil climbed back above $90 per barrel to $90.76 and Brent Crude futures climbed 1 percent to $106.20 per barrel. Copper futures rose nearly 1 percent as well, rallying to $350.60 per pound. Gold futures rose 0.73 percent to $1,582.30 per ounce and silver futures rose 1 percent as well.

Dollar weakness was the theme in currencies overnight, as the dollar index fell 0.28 percent. The EUR/USD briefly crossed back above 1.23 but has since traded lower to 1.2299. The EUR/AUD briefly traded to a new all time low below 1.18 before rebounding back above that level. Rumors that the Bundesbank was set to diversify some of its reserves into the Aussie Dollar was responsible for some of the move lower.

Expected earnings announcements today include:

• Freeport McMorran Copper and Gold FCX is expected to report Q2 EPS of $0.77 vs. $1.49 a year ago.


• Microsoft MSFT is expected to report Q2 EPS of $0.62 vs. $0.69 a year ago.


• Morgan Stanley MS is expected to report Q2 EPS of $0.43 vs. a loss of $0.38 per share a year ago.


• Traverlers TRV is expected to report Q2 EPS of 1.38 vs. a loss of $0.91 per share a year ago.


• Verizon VZ is expected to report Q2 EPS of $0.64 vs. $0.57 a year ago.

On the economic calendar, initial jobless claims are set to rise to 365K from 350K last week when data is released at 8:30 am est. At 10:00 am, data on existing home sales, leading indicators, and the Philadelphia Fed Manufacturing index are all due out. AT 4:30, the Fed releases its weekly update on its balance sheet and the money supply.

Good luck and good trading.