Benzinga Market Primer, Wednesday July 25

U.S. equity futures were flat early Tuesday after Apple Inc. AAPL missed analyst estimates for only the second time in 39 quarters. Apple's stock fell 5 percent in overnight trading and dragged NASDAQ futures, of which it has a larger than 10 percent weight, lower in tandem. However, Dow and S&P futures rose, even as the situation in Spain continues to deteriorate by the minuted.

Other news moving markets included:

• German IFO Business Climate missed estimates, reading 103.3 vs. estimates of 104.7 and the lower than the previous 105.2.


• British GDP was much worse than expected in the second quarter, falling 0.7 percent on an annualized basis as compared to economists expectations of a 0.2 percent contraction.


• Germany auctioned 30-year bonds at a low yield of 2.17 percent, well below the previous auction of 2.41 percent.


• Spain's yield curve has effectively flattened, with yields on bonds with maturities of greater that 2 years now over 7.5 percent. This flattening signals that investors believe that Spain is now shut out of sovereign debt markets and needs a bailout.


• S&P 500 futures rose 4.2 points to 1,333.70.


• NASDAQ futures fell 12 points to 2,536.75.


• 7.523 percent after reaching a new high of 7.751 percent.


• Italy 10-year yield 6.513 percent after rising as high as 6.706 percent.


• Gold up $13.00 to $1,593.90.

Overnight, Asian shares were weak following a bad day on Wall Street. Japanese shares measured by the Nikkei and Korean shares measured by the Kospi Index both fell over 1 percent on Spanish fears. European shares rose as Spanish bonds reversed earlier losses and risk sentiment improved. The Spanish Ibex index rose nearly 2 percent and Italian shares rose over 1.5 percent, leading gains in Europe. Other European markets such as the DAX and the CAC rose more measuredly.

Commodities showed moderate strength in early trading, as Brent Crude futures rose 0.25 percent to $103.68 per barrel and WTI Crude futures rose 0.19 percent to $88.67 per barrel. Corn futures reversed two days of losses due to cool weather and rain, rising 0.84 percent to near $8 per bushel. Copper and silver futures also rose.

In currencies, the EUR/USD rose back above 1.21 as Spanish yields reversed. Notable weak currencies Wednesday morning were the Japanese yen and the Great Britain pound, as the risk-on sentiment created yen weakness and the weak British GDP data was much worse than expected.

Earnings were largely weak Tuesday, even dismissing Apple's large beat. Companies such as UPS UPS, AT&T T, and Netflix NFLX all missed analysts estimates either on the top or bottom line. Notable earnings Wednesday include:

• ConocoPhillips COP is expected to report Q2 EPS of $1.17 vs. $2.41 a year ago.


• Delta Airlines DAL is expected to report Q2 EPS of $0.68 vs. $0.43.


• Eli Lilly LLY is expected to report Q2 EPS of $0.77 vs. $1.18 a year ago.


• Nasdaq OMX Group NDAQ is expected to report Q2 EPS of $0.60 vs. $0.62 a year ago and should comment on the Facebook FB litigation in its conference call.


• Visa V is expected to report Q2 EPS of $1.45 vs. $1.26 a year ago.

The economic calendar is fairly empty, with MBA purchase applications, new home sales, and the EIA Petroleum report the only notable U.S. economic releases. Secretary Geithner also speaks at 10:00 am.

Good luck and good trading.