Benzinga Market Primer, Monday August 27
U.S. equity futures rose modestly in early Monday trading with NASDAQ futures showing slight outperformance as Apple (NASDAQ: AAPL), which makes up nearly 20 percent of the NASDAQ, rose 2 percent in pre-market trading after winning a patent lawsuit against Samsung. Also, fears that central bank stimulus may not be as imminent as initially expected kept early markets modest.
In other news around the markets:
- The German IFO Business Climate Index, a survey of over 7000 companies in Germany, slipped to 102.3 from a downwardly revised 103.2 and missed economists estimates of a 102.6 reading. The data shows that German companies remain fearful that the ECB and the other European leaders may be running out of time to save the currency zone.
- Germany auctioned 12-month bills to yield negative 0.025 percent, higher than the previous auction's negative 0.054 percent but still at ultra-low levels.
- Hopes that Greece could be granted more time to implement its bailout measures were thrashed this weekend as numerous leaders, including conservative ally of Chancellor Angela Merkel Alexander Dobrindt said Greece should leave the euro. Chancellor Merkel defended her stance that Greece remain in the euro following these comments.
- Hertz (NYSE: HTZ) has agreed to buy Dollar Thrifty (NYSE: DTG) for $2.3 billion.
- S&P 500 futures rose 3.9 points to 1,413.70, NASDAQ futures rose 13.75 points to 2,788.75.
- EUR/USD higher at 1.2524.
- Spanish 10-year bond yields fell to 6.391 percent.
- Italian 10-year bond yields fell 5.703 percent.
- Gold effectively flat.
Asian shares were mostly weak overnight, with benchmark indexes in China, Hong Kong, and Australia falling. China's Shanghai Composite Index slipped 1.74 percent on fears that the People's Bank of China is not willing to do enough to stimulate the economy further, fueling fears over a hard landing. The Japanese Nikkei did eke out a slight gain of 0.16 percent as Australia's ASX Index fell 0.12 percent and the Hang Seng Index fell 0.41 percent. In Europe, shares were modestly higher across the continent. England's exchanges were closed, however the German DAX rose 0.23 percent despite the weak IFO survey. Italian and Greek shares rose while Spanish shares slipped slightly.
Commodity prices were largely higher in early trading as Isaac has now become a hurricane and is expected to make landfall near New Orleans on the seventh anniversary of the Katrina disaster. WTi Crude futures rose 0.94 percent to $97.50 per barrel and Brent Crude futures rose 0.77 percent to $114.47 per barrel. Notably, RBOB gasoline futures rose 3.48 percent ahead of the landfall of the storm. Copper futures rose 0.1 percent to $349.30 per pound and silver futures rose 0.59 percent to $30.89 per ounce.
The dollar was slightly weak in Monday trading as the Dollar Index slipped 0.07 percent to 81.54. However, forex volumes appeared weak as England was closed for trading and much of the London volume was not at work. The dollar was notably weak against the nordic currencies, the Swedish Krone and the Norwegian Krona, as oil prices rose. The Aussie dollar slipped against the U.S. dollar and the euro on relaxed hopes of Chinese easing.
In earnings news, Tiffany (NYSE: TIF) shares rose in pre-market trading despite the company posting EPS that missed analysts estimates and cutting guidance for the rest of the year. Other companies notably reporting earnings Monday include:
- Donaldson Company (NYSE: DCI) is expected to report Q2 EPS of $0.47 vs. $0.42 a year ago.
- Joseph A Bank (NASDAQ: JOSB) is expected to report Q2 EPS of $0.73 vs. $0.74 a year ago.
- PVH Corp. (NYSE: PVH) is expected to report Q2 EPS of $1.20 vs. $1.07 a year ago.
In economics, the Dallas Fed Manufacturing Survey is set to be released at 10:30 am eastern. Also, Fed members Sandra Pinalto and Charles Evans are set to speak. France is expected to auction 3-, 6-, and 12-month bills and the U.S. is expected to auction 3- and 6-month bills.
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