Benzinga Market Primer, Thursday November 29

Futures Rise on Budget Talks

U.S. equity futures rose early Thursday as Congressional leaders continue to meet to some up with a way to avoid the fiscal cliff. Today, leaders will meet with Treasury Secretary Geithner and other White House representatives to continue to work to find an agreement on how to avoid the fiscal cliff.

Top News

In other news around the markets:

• German unemployment increased 5,000 in November, slower than the rate expected by economists of 15,000 but still showing the eighth consecutive monthly increase.


• Italy raised 5.982 billion euros at auction this morning, issuing 5- and 10-year bonds with yields staying low. 10-year bond yields fell in the secondary market to the lowest level since early 2011 following the strong auction.


• Barclays BCS sees a copper shortage extending into the first half of 2011 as Chinese growth accelerates and production remains low.


• S&P 500 futures rose 7.9 points to 1,415.00.


• The EUR/USD was higher at 1.2989.


• Spanish 10-year government bond yields fell to 5.247 percent.


• Italian 10-year government bond yields 4.51 percent.


• Gold rose 0.47 percent to $1,726.60.

Asian Markets

Asian shares were mostly higher overnight on hopes that U.S. leaders could reach a budget deal. The Japanese Nikkei Index rose 0.99 percent while the Shanghai Composite Index fell 0.51 percent and the Hang Seng Index rose 0.99 percent. Also, the Korean Kospi rose 1.15 percent and Australian shares rose 0.68 percent.

European Markets

European shares were higher overnight buoyed by the positive comments from Washington and the strong Italian auction driving down yields. The Spanish Ibex Index rose 1.17 percent and the Italian MIB Index rose 1.7 percent. Meanwhile, the German DAX rose 0.78 percent and the French CAC 40 rose 1.11 percent while U.K. shares gained 0.89 percent.

Commodities

Commodities were stronger overnight on the positive sentiment emanating from Washington. WTI Crude futures rose 1.13 percent to $87.46 per barrel and Brent Crude futures rose 0.89 percent to $110.49 per barrel. Copper futures 0.76 percent to $356.45 per ounce on the Barclays report. Gold was higher and silver futures rose 0.28 percent to $33.87 per ounce.

Currencies

Currency markets showed broad euro strength in early trade following the Italian auction and the better than expected German unemployment data. The EUR/USD was higher at 1.2989 and the dollar rose against the yen to 82.09. Overall, the Dollar Index fell 0.29 percent to 80.11 on weakness against the euro, the Swedish krone, and the Swiss franc. The Aussie dollar was broadly weaker and the Swiss franc and Swedish krone both were stronger after the respective countries reported better than expected GDP data.

Pre-Market Movers

Stocks moving in the pre-market included:

• Aeropostale ARO shares fell 7.58 percent pre-market as earnings disappointed and guidance was lowered.


• Disney DIS shares rose 0.85 percent pre-market as the company hiked its dividend from $0.60 to $0.75 per share.


• Groupon GRPN shares fell 1.13 percent pre-market following an 11.62 percent gain Wednesday after founder Andrew Mason defended the company in an interview.


• Tiffany TIF shares rose 0.82 percent pre-market ahead of its earnings release.

Earnings

Notable companies expected to report earnings Thursday include:

• Barnes and Noble BKS is expected to report a second quarter loss of $0.11 per share vs. a loss of $0.17 per share a year ago.


• Kroger KR is expected to report third quarter EPS of $0.43 vs. $0.33 a year ago.


• Tiffany and Company TIF is expected to report third quarter EPS $0.63 vs. $0.70 a year ago.


• Zumiez ZUMZ is expected to report third quarter EPS of $0.48 vs. $0.45 a year ago.

Economics

On the economics calendar Thursday, lots of economic data is set to be released throughout the day. Chain store sales are expected as well as third quarter GDP data, jobless claims, and corporate profits. Later, Pending Home Sales, the EIA Natural Gas Report, and the Kansas City Fed Manufacturing Index are all expected. In addition, Richard Fisher of the Dallas Fed is set to speak and the Treasury is set to auction 7-year notes.

Good luck and good trading.