Benzinga Market Primer, Wednesday, October 31
U.S. equity futures rose in early Wednesday trading as the East Coast rebounds from the effects of Hurricane Sandy. Although it is great news that stock exchanges will reopen Wednesday, we here at Benzinga wanted to say that what is more important is that everyone hopefully ended up safe. To those still suffering the effects of the storm, the 8.2 million or so buildings without electricity, we wish the best.
In other news around the markets:
- David Einhorn of Greenlight Capital is now short iron ore futures as he believes that the global economy and China are both set to slow further.
- Italy's unemployment rate rose to 10.8 percent in September, up from the previous 10.6 percent and in line with economist expectations.
- Greek Finance Minister Stournaras has officially presented a budget to Parliament, who has until November 11 to pass the budget in order to receive the next bailout payment from the Troika.
- S&P 500 futures rose 9.6 points to 1,417.20.
- The EUR/USD was higher at 1.3003.
- Spanish 10-year government bond yields fell to 5.63 percent.
- Italian 10-year government bond yields fell to 4.95 percent.
- Gold rose 0.29 percent to $1,717.10 per ounce
Asian shares were mixed overnight on mixed economic data. Weak manufacturing data sent Japanese shares, as measured by the Nikkei Index, lower by 0.1 percent. Meanwhile, Chinese shares rose on strong earnings from the mega-banks, with the Shanghai Composite Index rising 0.38 percent and the Hang Seng Index rose 1.0 percent. The Korean Kospi fell on weak industrial production data and Australian shares rose.
European shares were higher in early Wednesday trading as Greece prepares its budget and Spanish bank BBVA reported third quarter earnings that fell 82 percent from a year ago, but shares rose 0.2 percent. The Spanish Ibex Index rose 1.08 percent and the Italian MIB Index rose 1.11 percent. Also, the German DAX rose 0.74 percent and the French CAC rose 2.17 percent while U.K. shares fell 0.02 percent.
Commodities were higher in overnight trading as markets had a risk-on sentiment. WTI Crude futures rose 0.84 percent to $86.40 per barrel and Brent Crude futures rose 0.45 percent to $109.57 per barrel. Copper futures rose 1.14 percent to $354.60 as Chinese shares rallied. Gold was higher and silver futures rose 1.00 percent to $32.135 per ounce.
The dollar was for sale and the euro was bid up in overnight trading as risk-on sentiment dominated risk markets. The EUR/USD was higher at 1.3003 and the dollar rose against the yen to 79.74. Overall, the Dollar Index fell 0.24 percent to 79.74 on weakness against the euro, the pound, the Canadian dollar, and the Swiss franc. The EUR/GBP was also bouncing as the Bundesbank was seen buying its month-end flows and the Aussie dollar rose against nearly all partners.
Stocks moving in the pre-market included:
- Advanced Micro Devices (NYSE: AMD) rose 2.42 percent pre-market as the company's price target was reiterated at Barclays.
- Ford (NYSE: F) shares rose 1.93 percent as the company reported strong North American earnings in the third quarter despite weakness in Europe.
- Halliburton (NYSE: HAL) shares fell 1.76 percent in pre-market trading as the company was negatively highlighted in a Seeking Alpha article.
- IBM (NYSE: IBM) shares rose 1.2 percent pre-market as the board increased the size of its share buyback plan by 75 percent to $11.7 billion.
There are several notable companies expected to report earnings Wednesday, including:
- Anheuser-Busch Inbev (NYSE: BUD) is expected to report third quarter EPS of $1.27 vs. $1.09 a year ago.
- Clorox Corporation (NYSE: CLX) is expected to report first quarter EPS of $0.95 vs. $0.98 a year ago.
- General Motors (NYSE: GM) is expected to report third quarter EPS of $0.60 vs. $1.03 a year ago.
- MGM Resorts (NYSE: MGM) is expected to report a third quarter loss of $0.17 vs. a loss of $0.14 a year ago.
- Visa (NYSE: V) is expected to report fourth quarter EPS of $1.50 vs. $1.27 a year ago.
On the economic calendar Wednesday, MBA Purchase Applications and the Chicago PMI are due out. In addition, the Fed's Williams is set to speak. Traders should also watch for data out of China late Wednesday night, as the official Chinese Manufacturing PMI is due out as well as the China HSBC Manufacturing PMI Index.
Good luck, good trading and Happy Halloween!
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