Market Overview

Benzinga Market Primer, Quadruple Witching Friday September 21

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U.S. equity futures climbed in early Friday trading as reports surfaced that Spain is in talks with the European Union to receive a full bailout as early as next week. The Financial Times was the first to report the news Thursday afternoon but the story has spread since and risk assets rallied broadly on the news. For options traders, do note that today is a quadruple witching Friday.

In other news around the markets:


  • An advisor to the People's Bank of China expects the slowdown to continue into 2013 and see fourth quarter GDP between 7.3 and 7.4 percent annualized growth, lower than consensus estimates.
  • European Union officials have announced that discussions with Greece will take a pause as both sides try to agree on a new round of spending cuts and tax increases so that Greece can receive the next bailout tranche.
  • The Swiss National Bank released a statement hinting that the peg of the franc against the euro could be lifted as the bank noted that a strong currency is hurting its economy.
  • Knight Capital Group (NYSE: KGC) moved its head of technology into a new role two months after a software glitch cost the company $40 million.
  • S&P 500 futures rose 3.9 points to 1,457.70.
  • The EUR/USD rose above 1.30 but has since retreated back to levels near 1.2990.
  • Spanish 10-year government bond yields rose to 5.764 percent.
  • Italian 10-year government bond yields rose to 5.021 percent.
  • Gold rose 0.31 percent to $1,775.70 per ounce.

Overnight, Asian shares rose on hopes that Spain would receive a bailout and the ECB would step in and cap yields on its bonds. The Shanghai Composite Index rose 0.09 percent and the Japanese Nikkei rose 0.25 percent. The Hang Seng Index rose 0.7 percent and the Korean Kospi rose 0.6 percent. In Europe, shares were mostly higher, led by Spain and Italy. Spanish shares climbed 0.61 percent and Italy's MIB Index rose 0.68 percent. The German DAX rose but Greek and English shares were weaker in early trading.

Commodities were stronger early Friday as investors bought risk assets. WTI Crude futures rose 0.65 percent to $93.02 per barrel and Brent Crude futures rose 0.38 percent to $110.45 per barrel. Copper futures rose 0.68 percent to $378.45 despite the warning on China's economy. Gold rose and silver futures climbed 0.12 percent to $34.725.

Currencies were back in risk-on mode reversing yesterday's pattern as the Aussie and New Zealand dollars gained and the U.S. dollar declined. The dollar index slipped 0.07 percent on weakness against the pound and the yen. The EUR/USD was marginally higher and the AUD/USD climbed near 1.05. The EUR/CHF also climbed back above 1.21 on hopes that the peg would be raised.

Stocks moving in the pre-market included Micron Technology (NASDAQ: MU), which rose 2.48 percent pre-market despite negative comments from Jim Cramer last night who called the company a value trap. Altria Group (NYSE: MO) also gained pre-market on a positive article from Seekingalpha. AIG (NYSE: AIG) shares slipped 0.35 percent in pre-market trading as a report showed that a lack of collateral in fixed income markets could hurt insurers.

In earnings, eyes are on K.B. Home (NYSE: KBH), as the homebuilder is expected to report a loss 0f $0.16 per share, lower than the $0.13 per share loss reported a year ago. Also, Darden Restaurants (NYSE: DRI) reported net earnings of $110.8 million or $0.85 per share for the first quarter, up from $106.6 million or $0.78 per share reported a year ago.

The economic calendar is empty save for a speech from Fed President Dennis Lockhart.

Good luck and good trading.

Posted-In: bailout European Central Bank Federal Reserve OMT spainBonds Earnings News Futures Commodities Previews Forex Global Econ #s Economics Hot Pre-Market Outlook Markets Trading Ideas Best of Benzinga

 

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