Benzinga Market Primer, Thursday August 30

U.S. equity futures slipped Thursday as fears over Europe's debt crisis caused investors to sell risky assets. Fears that Spain may be downgraded to junk spooked investors and weak Eurozone economic sentiment data stirred fears that a break up is not unavoidable in Europe. Also, fears over a hard landing in China rose as ICBC, one of China's largest banks, saw profit growth slip to 11 percent as loans continued to sour.

In other news around the markets:

• Chinese Premier Wen Jiabao has stated that China will continue to buy EU bonds after reassessing risks and stated that he fully supports the leaders in their efforts to prop up the economy. He did note that the Chinese authorities are going to work more closely with the ECB, the EU, and individual governments to boost communication, potentially hinting that there could be more globally coordinated stimulus efforts on the horizon.


• Italy auctioned 5- and 10-year bonds as yields fell from previous auctions on both maturities. The 10-year bond priced at 5.82 percent, below the previous 5.96 percent, and the 5-year priced at 4.73 percent, much lower than the previous 5.29 percent.


• Eurozone economic sentiment fell to 86.1 in August from 87.9 in July, missing economist estimates of a reading of 87.5.


• ECB President Mario Draghi and as many as six other top officials are set to skip the Kansas City Fed's Jackson Hole Summit as leaders at the bank cannot reach an agreement over how to implement a bond-buying plan without prompting further division among members.


• S&P 500 futures fell 5.4 points to 1,401.8.


• EUR/USD higher at 1.2544.


• Spanish 10-year bond yields rose to 6.574 percent.


• Italian 10-year bond yields rose to 5.784 percent.


• Gold fell 0.26 percent to $1,658.70.

Overnight, foreign trading in both Asian and Europe saw equity markets fall. In Asia, shares fell across the region on global growth fears. The Nikkei fell nearly 1 percent and Chinese shares fell as well, while the Hang Seng Index fell 1.19 percent and the Korean Kospi slipped 1.15 percent. European shares showed a similar picture, as indexes fell with notable weakness seen in Spain. The Spanish Ibex Index slipped 1.23 percent on fears that Spain would be downgraded to junk by Moody's as the three month period after being placed on negative watch nears an end. The German DAX fell 0.87 percent and the DJ Stoxx Index fell 0.44 percent.

Commodities were mixed as WTI Crude futures slipped 0.18 percent to $95.32 per barrel while Brent Crude futures rose 0.54 percent to $113.50 per barrel. Copper futures rose 0.45 percent to $346.45 and silver futures slipped 0.56 percent to $30.75 per ounce.

The dollar was slightly weak as currencies saw thin trading overnight. The dollar index slipped 0.1 percent as the euro gained against the dollar slightly and the yen and the pound also strengthened against the green back. The Aussie dollar has continued recent weakness, slipping against both the U.S. dollar and the euro.

Tivo TIVO reported a second quarter loss that was narrower than analysts had forecast as its number of customers rose. Also, Pandora Media P reported that it broke even ex-items for the first time and shares jumped nearly 12 percent in overnight trading. Notable companies reporting earnings Thursday include:

• Zumiez ZUMZ is expected to report quarterly EPS of $0.13.


• SAIC SAI is expected to report quarterly EPS of $0.33.


• Omnivision OTVI is expected to report quarterly EPS of $0.24.


• Splunk SPLK is expected to report a quarterly loss of $0.03.

It's Thursday, and Thursday brings weekly jobless claims. Economists are expecting jobless claims to remain effectively flat at 370,000 vs. the previous 372,000. The range of estimates is from 365,000 to 375,000 and any report in that range should be a relative non-event. Markets would need to see jobless claims increase significantly for the Fed to really be concerned, as claims at these levels indicate continued sluggish improvement in employment but not strong enough to drive down the unemployment rate. Data on income and outlays is also due out and later, the K.C. Fed Manufacturing Index is also expected.

Good luck and good trading.