Benzinga Market Primer: Thursday, January 10
Futures Higher Ahead of ECB, BOE
U.S. equity futures rose modestly in early Thursday trade following strong Chinese trade data and ahead of the interest rate decisions of the European Central Bank and the Bank of England. Overnight, China reported that the trade balance was $31.6 billion in December, well ahead of consensus forecasts of a $20.0 billion trade balance. Also, exports grew at a 14.1 percent annualized rate, well faster than consensus expectations of a 5.0 percent rise and also the report showed strong signs of credit growth.
In other news around the markets:
- Spain sold 5.7 billion euros of 2-, 5-, and 13-year bonds with yields falling across the curve and on strong demand.
- Italy sold 8.5 billion euros of 1-year notes with yields falling and demand remaining strong as well. The yield was the lowest since January 2010 at the auction.
- The Greek unemployment rate rose to 26.8 percent in October from an upwardly revised 26.2 percent in September showing that the Greek tragedy that is the debt crisis is not anywhere near over yet.
- S&P 500 futures rose 4.2 points to 1,460.00.
- The EUR/USD was higher at 1.3102.
- Spanish 10-year government bond yields fell to 4.99 percent. This is the first time that 10-year yields fell below 5 percent since March of 2012.
- Italian 10-year government bond yields fell to 4.192 percent.
- Gold rose 0.42 percent to $1,662.50 per ounce.
Asian shares were higher overnight following the strong Chinese trade data as investors' fears over a collapse in global trade receded following the report. The Japanese Nikkei Index rose 0.7 percent in Tokyo while the Shanghai Composite Index rose 0.37 percent and the Hang Seng Index rose 0.59 percent. Also, the Korean Kospi jumped 0.75 percent and Australian shares rose 0.31 percent.
European shares were mostly higher in early trade and were rising following the strong auctions from Spain and Italy. The Spanish Ibex Index rose 0.15 percent overnight and the Italian MIB Index rose 0.63 percent following the strong auctions. Meanwhile, the German DAX rose 0.24 percent and the French CAC slipped 0.1 percent while U.K. shares rose 0.12 percent in early trade.
Commodities were higher overnight led by energy futures on the back of the Chinese trade data. WTI Crude futures rose 1.58 percent to $94.56 per barrel and Brent Crude futures rose 1.23 percent to $113.15 per barrel. Copper futures rose 1.14 percent to $371.25 per pound as a stronger Chinese economy points to higher copper demand. Gold was higher and silver futures rose 0.95 percent to $30.54 per ounce.
Currency markets were in risk-on mode on the back of the Chinese trade data and the strong European auctions. The EUR/USD was higher at 1.3102 and the dollar gained against the yen to 88.08. Overall, the Dollar Index fell 0.23 percent on weakness against the euro, the Canadian dollar, the Swiss franc and the Swedish krone. Also, the AUD/USD was demonstrably stronger overnight after the Chinese trade data and AUD/JPY was the best gainer, rising 0.82 percent.
Stocks moving in the pre-market included:
- Corning Inc. (NYSE: GLW) shares rose 2.02 percent pre-market as the company announced at CES that it is working with t.v. manufacturers to create large panels of Gorilla Glass for large appliances.
- Microsoft (NASDAQ: MSFT) shares fell 0.75 percent pre-market as the company announced a new partnership with Sprint (NYSE: S) to launch Windows smartphones on Sprint's network.
- Newmont Mining (NYSE: NEM) shares rose 0.42 percent pre-market as gold prices rallied sharply.
- Caterpillar (NYSE: CAT) shares rose 0.38 percent pre-market following the strong Chinese data.
- MSC Industrial Direct Co (NYSE: MSM) is projected to report its Q1 earnings at $1.01 per share on revenue of $582.26 million.
- SUPERVALU (NYSE: SVU) is expected to report its Q3 earnings at $0.06 per share on revenue of $7.90 billion.
- Ceres (NASDAQ: CERE) is estimated to post a Q1 loss at $0.32 per share on revenue of $1.33 million.
- Xyratex (NASDAQ: XRTX) is projected to post a Q4 loss at $0.32 per share on revenue of $255.18 million.
On the economics calendar Thursday, the ECB and the BOE interest rate decisions are expected early this morning followed by initial jobless claims and wholesale trade. In addition, the Treasury is set to auction 30-year bonds and Esther George of the Kansas City Fed, James Bullard of the St. Louis Fed, and Narayana Kocherlakota of the Minneapolis Fed are set to speak during the day.
Good luck and good trading.
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