Benzinga Market Primer: Wednesday, January 23
Futures Flat on Earnings, Eye House Vote
U.S. equity futures were near unchanged overnight despite mostly positive earnings from large tech and transportation companies. Also, stocks await a vote in the U.S. House of Representatives on raising the debt ceiling.
In other news around the markets:
- Spain's GDP contracted 0.6 percent in the fourth quarter to bring the total year rate of GDP contraction to -1.3 percent. Weak domestic demand and slack in export markets weighed on the Spanish economy, said the Bank of Spain.
- British Prime Minister David Cameron promised a U.K. referendum on Europe in a speech overnight with a full vote not expected until 2017.
- Greece actually beat its deficit targets for 2012 with the total deficit coming in at 15.69 billion euros compared to the forecast of 16.31 billion euros, according to the Greek Accounting Office.
- S&P 500 futures fell 1.5 points to 1,487.90.
- The EUR/USD was higher at 1.3328.
- Spanish 10-year government bond yields fell to 5.072 percent.
- Italian 10-year government bond yields fell to 4.18 percent.
- Gold fell 0.06 percent to $1,692.10 per ounce.
Asian shares were mixed overnight with strong weakness seen in Japanese equities overnight. The Japanese Nikkei Index fell 2.08 percent overnight while the Shanghai Composite Index rose 0.25 percent and the Hang Seng Index fell 0.1 percent. Also, the Korean Kospi fell 0.81 percent and Australian shares rose 0.18 percent.
European shares were also mixed overnight with weakness in the periphery offset by strength in the core. The Spanish Ibex Index fell 0.25 percent and the Italian MIB Index also fell 0.25 percent. Meanwhile, the German DAX rose 0.3 percent and the French CAC fell 0.08 percent while U.K. shares rose 0.19 percent.
Commodities were mostly higher overnight, once again led by Natural Gas futures as the cold weather in the U.S. drives prices higher. WTI Crude futures rose 0.1 percent to $96.77 per barrel and Brent Crude futures rose 0.12 percent to $112.54 per barrel as Natural Gas futures rallied 0.67 percent to $3.58 per million BTU. Copper futures were near flat overnight despite positive comments from Freeport McMoRan Copper and Gold's (NYSE: FCX) CEO stating that he sees low copper inventories and accelerating demand in 2013. Gold was slightly lower and silver futures rose 0.07 percent to $32.20 per ounce.
Currency markets continued to see yen strength Wednesday as the euro was near flat overnight and the pound rallied after selling off late Tuesday on comments that the U.K. is mulling more stimulus. The EUR/USD was slightly higher at 1.3328 and the dollar fell against the yen to 88.35. Overall, the Dollar Index fell 0.14 percent on weakness against the yen, the pound, and the Canadian dollar.
Stocks moving in the pre-market included:
- Google (NASDAQ: GOOG) shares rose 5.05 percent pre-market after the company reported better than expected earnings after the bell despite revenue figures being slightly weak.
- Cree, Inc. (NYSE: CREE) shares rose 14.94 percent after the company reported strong earnings and guidance after the bell.
- Intuitive Surgical (NASDAQ: ISRG) shares rose 8.68 percent after the company reported better than expected earnings.
- IBM (NYSE: IBM) shares rose 4.04 percent pre-market following the company's strong fourth quarter earnings report and guidance for the future.
Notable companies expected to report earnings Wednesday include:
- Abbot Labs (NYSE: ABT) is expected to report fourth quarter EPS of $1.50 vs. $1.45 a year ago.
- McDonald's (NYSE: MCD) is expected to report fourth quarter EPS of $1.33 vs. $1.33 a year ago.
- Netflix (NASDAQ: NFLX) is expected to report a fourth quarter loss of $0.60 per shares vs. EPS of $0.73 a year ago.
- Apple (NASDAQ: AAPL) is expected to report fiscal first quarter EPS of $13.41 vs. $13.87 a year ago.
- Quest Diagnostics (NYSE: DGX) is expected to report fourth quarter EPS of $1.07 vs. $1.23 a year ago.
On the economics calendar Wednesday, it is the first full day of the World Economic Forum in Davos, Switzerland, so look for comments from Davos all day. Also, MBA Purchase Application and the FHFA House Price Index are set to be released. In addition, the Treasury is set to auction 4-week bills and overnight, the Chinese HSBC Manufacturing Index, Eurozone Manufacturing PMI's, and Italian retail sales are expected.
Good luck and good trading.
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