Benzinga Market Primer, Monday September 17

U.S. equity futures fell in early Monday trading after weakness in Chinese markets reverberated globally and sent investors into risk-off mode. After the U.S. announced it was prepared to file new charges against China to the World Trade Organization over cars and auto parts. Also, Australian resource minister Martin Ferguson said that the Australian resource boom has ended, which indicates that China is slowing as its demand fro natural resources falls.

In other news around the markets:

• German Chancellor Angela Merkel defended the euro, stating that the single currency stands for European unity, that Greece will remain in the euro, and that investors are having trouble investing in Europe. However, a new survey also shows that 49 percent of Germans believe they would be better off outside of the currency bloc.


• A massive military exercise by more than 20 countries is being held in the Persian Gulf as Israel/Iran tensions rise.


• New reports indicate that it may take some time for Spain to request formal aid to receive ECB bond support, as Prime Minister Mariano Rajoy has instructed Finance Minister Luis de Guindos to be aggressive on every detail of a program.


• Apple AAPL sold out of pre-orders of the iPhone 5 within hours of it being launched online and customers are already lining up outside of stores, awaiting the launch of the latest installment of the phone later this week.


• Do note that today, UnitedHealth Group UNH replaces Kraft KFT in the Dow.


• S&P 500 futures fell 3.1 points to 1,455.90.


• The EUR/USD fell marginally to 1.3115 but near where it closed in New York on Friday.


• Spanish 10-year government bond yields rose to 5.89 percent.


• Italian 10-year government bond yields rose to 5.064 percent.


• Gold rose 0.06 percent to $1,773.70 per ounce.

Overnight, Asian shares were mostly higher however Chinese shares were notably weak. The Shanghai Composite Index slipped 2.14 percent on growth fears and also as tensions between China and Japan increased. The Nikkei did rise 1.83 percent and Australian shares did rise a modest 0.29 percent despite the weakness in China. In Europe, shares were mostly lower as of writing, as the Spanish Ibex fell 0.92 percent and the Italian MIB slipped 1.15 percent. The German DAX fell 0.24 percent and the French CAC 40 fell 0.61 percent.

Commodities were weak, seemingly consolidating gains of the past week. The energy complex rallied strongly last week as Middle East fears and further Fed easing boosted prices. This morning, prices gave back some gains, as WTI Crude futures fell 0.08 percent to $98.92 per barrel and Brent Crude fell 0.17 percent to $116.46 per barrel. Copper futures slipped from multi-month highs by 0.68 percent to $380.65 per ounce. Gold rose slightly and silver fell 0.19 percent to $34.59 per ounce.

Currencies also were in reversal mode as the dollar gained back modestly following massive losses last week. The Dollar Index rose 0.08 percent but remained below 79 on strength against the Swedish Krona, the Canadian dollar, and the euro. The Canadian dollar retreated from year lows against the greenback as investors piled into the currency in hopes that Canada would receive the economic benefits of QE3 without the currency devaluation seen in the U.S. Also, the EUR/CHF continued to be strong as investors continue to increase bets that the Swiss National Bank is prepared to hike the peg of the pair to 1.30 from 1.20.

Stocks moving higher pre-market included:

• Amazon AMZN gained 0.95 percent pre-market.


• Apple AAPL rose 0.54 percent on heavy volume as investors await the release of the iPhone 5.


• Coca Cola KO rose 0.31 percent.


• Cisco Systems CSCO gained 0.31 percent.


• Boeing BA gained 0.24 percent.

Stocks moving lower pre-market included:

• Home Depot HD slid 4.79 percent pre-market as it closed all of its Chinese stores and will take an approximately $130 million loss in the third quarter due to the closings.


• Cliff's Natural Resources CLF fell 2.59 percent.


• Sprint Nextel S fell 2.28 percent in the pre-market.


• U.S. Steel X fell 2.01 percent as steel prices fell on Chinese fears.


• United Technologies UTX fell 1.76 percent.

In economics, the Empire State Manufacturing Index is due out at 8:30 am EST. France is also expected to auction short-term bills this morning with maturities of three-, six-, and 12-months.

Good luck and good trading.