Benzinga Market Primer: Thursday, February 7
Futures Higher as Euro Gains
U.S. equity futures rose in pre-market trading as the euro rallied and European stocks gained. Markets await the interest rate decisions from the Bank of England and European Central Bank, due out later this morning.
In other news around the markets:
- Australian payrolls grew 10,400 in January, more than double forecasts, as the unemployment rate stayed flat at 5.4 percent when it was expected to rise.
- Spain and France issued bonds overnight with yields rising for all maturities of the bonds issued.
- Greek Finance Minister Yannis Stournaras sees a Greek recovery beginning in 2013 as deposits return to Greece and citizens "bring back their money from their mattresses."
- S&P 500 futures rose 1.9 points to 1,508.70.
- The EUR/USD was was higher at 1.3568.
- Spanish 10-year government bond yields rose to 5.46 percent.
- Italian 10-year government bond yields fell to 4.55 percent.
- Gold fell 0.14 percent to $1,676.30 per ounce.
Asian shares were lower overnight despite the strong Australian employment report as weak earnings from companies such as Sony (NYSE: SNE) weighed. The Japanese Nikkei Index fell 0.93 percent and the Shanghai Composite Index fell 0.66 percent and the Hang Seng Index fell 0.34 percent. Also, the Korean Kospi declined 0.23 percent and Australian shares rose 0.3 percent.
European shares were higher despite the rise in bond yields in early trade ahead of the Bank of England and the European Central Bank rate decisions. The Spanish Ibex Index gained 0.84 percent and the Italian FTSE MIB Index rose 0.76 percent with strength seen in energy and industrial stocks. Meanwhile, the German DAX rose 0.25 percent and the French CAC rose 0.34 percent while U.K. shares rose 0.09 percent.
Commodities were mixed overnight with energy futures gaining and metals futures declining. WTI Crude futures rose 0.3 percent to $96.91 per barrel and Brent Crude futures rose 0.74 percent to $117.59 per barrel. Copper futures rose 0.19 percent on the Australian payrolls data. Gold was lower and silver futures fell 0.29 percent to $31.79 per ounce.
Currency markets were in a slight risk-on mode overnight as the euro gained and the yen declined. The EUR/USD was higher at 1.3568 and the dollar gained against the yen to 93.88. Overall, the Dollar Index fell 0.16 percent on weakness against the euro, the pound, the Swiss franc, and the Canadian dollar. The Australian dollar was also strong against the greenback and it gained against the yen but declined slightly against the euro.
Stocks moving in the pre-market included:
- Visa (NYSE: V) shares fell 1.31 percent pre-market as the company reported earnings that missed estimates but on strong revenue and authorized an additional $1.75 billion share buyback.
- Green Mountain Coffee Roasters (NYSE: GMCR) shares fell 7.03 percent as the company reported earnings that beat estimates but lowered sales guidance.
- News Corp (NYSE: NWSA) shares fell 4.32 percent pre-market as the company reported earnings that beat estimates but lowered guidance.
- Yelp (NYSE: YELP) shares fell 2.82 percent after the company reported earnings that missed estimates on better than expected revenue.
Notable companies expected to report earnings Thursday include:
- Advanced Auto Parts (NYSE: AAP) is expected to report fourth quarter EPS of $0.76 vs. $0.90 a year ago.
- Coca-Cola Enterprises (NYSE: CCE) is expected to report fourth quarter EPS of $0.43 vs. $0.36 a year ago.
- Coinstar (NASDAQ: CSTR) is expected to report fourth quarter EPS of $0.72 vs. $1.00 a year ago.
- KKR (NYSE: KKR) is expected to report fourth quarter EPS of $0.21 vs. $0.33 a year ago.
- LinkedIn (NASDAQ: LNKD) is expected to report fourth quarter EPS of $0.19 vs. $0.12 a year ago.
- Monster Worldwide (NYSE: MWW) is expected to report fourth quarter EPS of $0.08 vs. $0.11 a year ago.
- OpenTable (NASDAQ: OPEN) is expected to report fourth quarter EPS of $0.43 vs. $0.37 a year ago.
- Phillip Morris International (NYSE: PM) is expected to report fourth quarter EPS of $1.22 vs. $1.10 a year ago.
- Sprint Nextel (NYSE: S) is expected to report a fourth quarter loss of $0.46 per share vs. a loss of $0.35 per share a year ago.
On the economics calendar Thursday, chain store sales, initial jobless claims, and non-farm productivity and costs are due out. Also, the EIA natural gas report and consumer credit data are expected. Speeches from Fed members Charles Evans and Jeremy Stein could also move markets and the Fed Balance Sheet and Money Supply update will be released after the close. Overnight, Chinese inflation data and the latest German trade balance should move markets.
Good luck and good trading.
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Tags: Australian Payrolls, Bank Of England, Chain Store Sales, Charles Evans, European Central Bank, Initial Jobless Claims, Jeremy Stein, Non-Farm Productivity, Sony, Spanish bonds, Yannis Stournaras