Benzinga Market Primer, Wednesday, January 2
Futures Up Strong on Fiscal Cliff Deal
U.S. equity futures traded up significantly Wednesday morning following the resolution of the fiscal cliff. The U.S. Congress passed a bill late last night that averted the fiscal cliff, keeping tax rates low on those earning less than $400,000 per year and delaying spending cuts for two months.
In other news around the markets:
- Zipcar (NASDAQ: ZIP) was acquired by Avis (NASDAQ: CAR) for $12.50 per share. Zipcar closed on Monday at $8.24.
- Spanish PMI came in at 44.6, less than the 45.1 than anticipated.
- Italian PMI beat expectations at 46.7, more than the 45.40 that was expected.
- French PMI came in line with expectations at 44.6
- German PMI missed expectations at 46, economists were looking for 46.3.
- U.K. PMI came in at 51.4, more than the 49.2 that was expected and solidly above the 50 mark that indicates economic expansion.
- Macau casino revenue is up 13.5 percent to a record $38 billion in 2012.
Markets in Japan and China remain closed for the holiday, but Asian markets that were open traded up strongly higher. The Korea KOSPI Index was up over 1.70 percent, while Australia's S&P/ASX 200 traded up over 1.20 percent.
European stocks traded strongly higher almost across the board, as the resolution of the fiscal cliff in the U.S. outweighed mixed data in the European PMI readings. In the U.K., the FTSE 100 traded up well over two percent, boosted by a stronger than expected PMI. France's CAC 40 Index was higher by 2.40 percent, while Germany's DAX traded up over 2.20 percent. Italy's FTSE MIB Index rose over 3.20 percent.
Commodities were mostly higher, in line with stocks, with the exception of natural gas. WTI crude traded up over 1.25 percent as Brent Crude rose over 0.70 percent. Natural gas dropped by over 1.30 percent. Gold traded up over 0.40 percent, as did silver.
The U.S. dollar was mostly weaker early Wednesday. The greenback dropped against the euro, as the EUR/USD rose to near 1.325. Meanwhile, the GBP/USD also rallied to around 1.63 and the USD/CHF fell to 0.9123. The dollar did show some strength, against Japan's yen, with the pair trading up slightly to 87.11, continuing the recent trend. The AUD/USD traded up almost 0.90 percent to 1.0487, and the USD/CAD dropped to 0.9848.
Stocks moving in the pre-market included:
- Facebook (NASDAQ: FB) up almost three percent.
- Zipcar (NASDAQ: ZIP) up almost 50 percent.
- Apple (NASDAQ: AAPL) up nearly three percent.
On the economics calendar Wednesday, there are a fair number of reports. At 8:00 am EST markets will see data on German inflation. Later, at 9:00, the U.S. manufacturing PMI will be released. Construction spending will follow at 10:00 am along with ISM Manufacturing.
Good luck and good trading.
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