Benzinga Market Primer: Friday, January 18
Futures Rise on Strong Chinese GDP
U.S. equity futures rose slightly overnight following the release of China's fourth quarter GDP. The National Statistics Bureau reported that fourth quarter GDP rose at an annualized rate of 7.9 percent, better than the 7.8 percent forecast by economists and better than the 7.4 percent rate of growth seen in the third quarter.
In other news around the markets:
- Spanish and Italian industrial production dropped precipitously in November. Spain's industrial production fell 1.5 percent in the month on expectations of a 2.5 percent rise and Italian industrial production fell 0.5 percent on expectations of a 2.0 percent rise.
- Chinese industrial production rose faster than expected in the fourth quarter, alongside GDP, rising 10.3 percent vs. the 10.1 percent estimate of economists. Also, Chinese retail sales rose at an annualized rate of 15.2 percent in December, better than estimates of a 14.9 percent rise.
- Spain's bad bank ratio rose in November to 11.38 percent from 11.23 percent, more pain for the Iberian economy.
- S&P 500 futures rose 1.10 points to 1,476.80.
- The EUR/USD was was slightly lower at 1.3362.
- Spanish 10-year government bond yields rose to 5.129 percent.
- Italian 10-year government bond yields fell to 4.181 percent.
- Gold rose slightly by 0.02 percent to $1,691.20 per ounce.
Asian shares were higher overnight following the strong Chinese GDP report and also on strong industrial production data from Japan. The Japanese Nikkei Index rose 2.86 percent and the Shanghai Composite Index rose 1.41 percent while the Hang Seng Index rose 1.12 percent.
European shares were higher after a whipsaw open despite the weak Italian and Spanish data. The Spanish Ibex Index rose 0.45 percent and the Italian MIB Index rose 0.45 percent as well. Meanwhile, the German DAX gained 0.14 percent and the French CAC rose 0.36 percent while U.K. shares rose 0.26 percent.
Commodities were mixed overnight with oil lagging and metals rising. WTI Crude futures fell 0.16 percent to $95.34 per barrel and Brent Crude futures fell 0.08 percent to $111.01 per barrel. Copper futures rose 0.25 percent to $367.05 per pound following the strong China data. Gold was slightly higher and silver futures rose 0.17 percent to $31.87 per ounce.
Currency markets were much quieter than previous days overnight save for the Swiss franc. The EUR/USD was lower at 1.3362 and the dollar fell against the yen to 89.96 after breaching 90 Thursday. Overall, the Dollar Index rose 0.15 percent on strength against the euro, the pound, the Canadian dollar, and the Swiss franc. Notably, the USD/CHF rose 0.56 percent to 0.9377 and the EUR/CHF rose 0.31 percent to 1.2513, the highest in 22 months. Barclays analysts see the EUR/CHF heading towards 1.3210, the 200-week moving average, over the next few months. Also, Swiss media has been reporting that the Swiss National Bank may hike the peg to 1.25.
Stocks moving in the pre-market included:
- Carnival Corporation (NYSE: CCL) shares rose 1.6 percent pre-market announced that it kept its dividend constant at $0.25 per share.
- Cliffs Natural Resources (NYSE: CLF) shares fell 2.43 percent pre-market as the company announced Thursday that it is set to divest its Brazilian iron ore operations.
- AT&T (NYSE: T) shares fell 1.36 percent pre-market as the company announced that it is taking a $10 billion charge on pension related costs in the fourth quarter.
- Citigroup (NYSE: C) shares fell 0.8 percent pre-market as the company reported earnings that disappointed investors.
Notable companies expected to report earnings Friday include:
- General Electric (NYSE: GE) is expected to report fourth quarter EPS of $0.43 vs. $0.39 a year ago.
- Johnson Controls (NYSE: JCI) is expected to report first quarter EPS of $0.51 vs. $0.60 a year ago.
- Morgan Stanley (NYSE: MS) is expected to report fourth quarter EPS of $0.29 vs. a loss of $0.14 per share a year ago.
- Schlumberger (NYSE: SLB) is expected to report fourth quarter EPS of $1.08 vs. $1.11 a year ago.
- SunTrust Banks (NYSE: STI) is expected to report fourth quarter EPS of $0.61 vs. $0.28 a year ago.
On the economics calendar Friday, the preliminary University of Michigan Consumer Confidence survey is due out.
Good luck and good trading.
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