Benzinga Market Primer: Friday, February 1: Non-Farm Payrolls Edition
Futures Rise Ahead of Non-Farm Payrolls, Manufacturing Data
U.S. equity futures rose strongly in the pre-market ahead of the much awaited Non-Farm Payrolls report. Also, positive macroeconomic signs were seen in the form of stronger than expected manufacturing PMI's in China and the Eurozone overnight.
In other news around the markets:
- China's official manufacturing PMI fell in January, however the fall was due to a change in the methodology of the index, while the HSBC China Manufacturing PMI rose to 52.3 from 51.9, beating expectations of a reading of 52.1.
- The Eurozone Manufacturing PMI in January rose to to 47.9 from 47.5, beating forecasts of a flat reading month over month, with broad based strength seen across the continent, a very positive signal.
- Spanish bank stocks declined sharply overnight as the Spanish markets regulator lifted the ban on short-selling in the country. In fact, every stock in the Ibex 35 Index was down on the session.
- S&P 500 futures rose 6.00 points to 1,499.20.
- The EUR/USD was rose sharply to 1.3673.
- Spanish 10-year government bond yields fell to 5.23 percent.
- Italian 10-year government bond yields fell to 4.32 percent.
- Gold rose 0.2 percent to $1,665.50 per ounce.
Asian shares were mixed overnight with strength seen in China, Japan, and Australia following the Chinese manufacturing data. The Japanese Nikkei Index rose 0.47 percent and the Shanghai Composite Index rose 1.41 percent while the Hang Seng Index declined 0.03 percent. Also, the Korean Kospi declined 0.21 percent while the Australian S&P ASX Index rose 0.87 percent.
European shares were mostly higher save for Spain following the positive manufacturing data. The Spanish Ibex Index declined 1.08 percent following the lifting of the short-selling ban and the Italian MIB Index rose 0.19 percent. Meanwhile, the German DAX rose 0.69 percent and the French CAC rose 0.97 percent while U.K. shares rose 0.68 percent.
Commodities were mixed overnight with moves contained to small fluctuations. WTI Crude futures declined 0.24 percent to $97.26 per barrel and Brent Crude futures rose 0.19 percent to $115.77 per barrel. Copper futures rose 0.07 percent to $373.45 per pound on the stronger than expected Chinese data. Gold was higher and silver futures rose 0.06 percent to $31.37 per ounce.
Currency markets were showing strong risk-on tones overnight as the euro gained massively against all major partners. The EUR/USD was 0.66 percent higher at 1.3673 and the dollar rose against the yen to 92.14. Overall, the Dollar Index fell 0.3 percent on weakness against the euro, the Swiss franc, and the Swedish krone. The euro was strong against the greenback but was more so against the yen, rising 1.12 percent to 125.93, and rising 0.93 percent against the British pound to 0.8642. Also, the EUR/AUD rose 1.19 percent to 1.3178.
Stocks moving in the pre-market included:
- Bebe Stores (NASDAQ: BEBE) shares fell 4.07 pre-market after the company reported earnings that missed estimates.
- Blackstone (NYSE: BX) shares rose 0.38 percent pre-market as the company reported earnings that beat estimates.
- Facebook (NASDAQ: FB) shares rose 1.09 percent pre-market as the stock was upgraded at Pivotal Research.
- Microsoft (NASDAQ: MSFT) shares rose 0.51 percent pre-market as the Surface Pro is set to launch next week.
Notable companies expected to report earnings Friday include:
- Exxon Mobil (NYSE: XOM) is expected to report fourth quarter EPS of $2.00 vs. $1.97 a year ago.
- Ingersoll-Rand (NYSE: IR) is expected to report fourth quarter EPS of $0.70 vs. $0.76 a year ago.
- Legg Mason (NYSE: LM) is expected to report third quarter EPS of $0.54 vs. $0.20 a year ago.
- Newell Rubbermaid (NYSE: NWL) is expected to report fourth quarter EPS of $0.42. vs. $0.40 a year ago.
- Perrigo (NASDAQ: PRGO) is expected to report second quarter EPS of $1.33 vs. $1.20 a year ago.
On the economics calendar Friday, it's the first Friday of the month and thus it's Non-Farm Payrolls day. Non-Farm payrolls are expected to rise to 160 thousand while private payrolls are expected to rise to 185,000 and the unemployment rate is expected to fall to 7.7 percent. Also on the economics calendar are the U.S. Manufacturing PMI and consumer sentiment, followed by the ISM Manufacturing Index and construction spending data. In addition, William Dudley of the New York Fed is set to speak.
Good luck and good trading.
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