Benzinga Market Primer: Thursday, February 14
Futures Lower Following Eurozone GDP
U.S. equity futures traded lower in early trade following weak GDP data from eurozone nations released overnight for the fourth quarter. Eurozone GDP fell 0.6 percent in the fourth quarter, worse than expectations of a decline of 0.4 percent and below the previous reading of a 0.1 percent contraction.
In other news around the markets:
- The European Central Bank's monthly report made direct comments about the threats of a strong euro and warned that a strong currency poses downside risks to inflation targets.
- Russia releases a statement overnight calling on the G20 to make a specific, targeted statement against Japan and its moves on FX rates.
- The Bank of Korea took no retaliatory measures against the Bank of Japan overnight, but the Bank of Korea did mention that the weak yen policy of japan poses economic uncertainty to Korea, whose currency has strengthened the most against the yen since the beginning of the BoJ easing cycle.
- S&P 500 futures fell 2.7 points to 1,514.60.
- The EUR/USD was lower at 1.3331.
- Spanish 10-year government bond yields rose to 5.22 percent.
- Italian 10-year government bond yields rose to 4.41 percent.
- Gold fell 0.11 percent to $1,643.00 per ounce.
Asian shares were mostly higher overnight as Japanese shares rose on monetary easing prospects. The Japanese Nikkei Index rose 0.5 percent overnight as the yen weakened. Also, the Korean Kospi rose 0.18 percent and Australian shares rose 0.66 percent.
European shares were sharply lower following the weak GDP data in early trade. The Spanish Ibex Index fell 1.23 percent and the Italian FTSE MIB Index declined 0.83 percent. Meanwhile, the German DAX fell 0.58 percent and the French CAC declined 0.29 percent and U.K. shares shed 0.36 percent.
Commodities were mixed overnight as gold and oil traded lower. WTI Crude futures fell 0.09 percent to $96.96 per barrel and Brent Crude futures fell 0.22 percent to $117.65 per barrel. Copper futures fell 0.39 percent to $372.85. Gold was lower and silver futures fell 0.22 percent to $30.80 per ounce.
Currency markets were in flux overnight as the euro, the yen, and the sterling all weakened. The EUR/USD was lower at 1.3331 and the dollar rose against the yen to 93.44 while the cable broke below 1.55 briefly and trades at 1.5502. Overall, the Dollar Index rose 0.59 percent on strength against the euro, the pound, the yen, and the Swiss franc.
Stocks moving in the pre-market included:
- Constellation Brands (NYSE: STZ) shares rose over 9 percent pre-market as the company announced that it was buying the remaining part of Grupo Modelo from AB InBev (NYSE: BUD), whose shares rose over 4 percent.
- CenturyLink (NYSE: CTL) shares fell 13.14 percent pre-market as the company reported weaker than expected earnings and lowered guidance.
- AIG (NYSE: AIG) shares fell 1.6 percent pre-market despite a new 13-F filing showing the Baupost Group has taken a new stake in the company.
- Zillow (NASDAQ: Z) shares rose 7.01 percent pre-market after rising 7.79 percent Wednesday as the company reported better than expected earnings.
Notable companies expected to report earnings Thursday include:
- CBS (NYSE: CBS) is expected to report fourth quarter EPS of $0.71 vs. $0.57 a year ago.
- Discovery Communications (NASDAQ: DISCA) is expected to report fourth quarter EPS of $0.76 vs. $0.86 a year ago.
- General Motors (NYSE: GM) is expected to report fourth quarter EPS of $0.51 vs. $0.39 a year ago.
- PepsiCo (NYSE: PEP) is expected to report fourth quarter EPS of $1.05 vs. $1.15 a year ago.
- Waste Management (NYSE: WM) is expected to report fourth quarter EPS of $0.60 vs. $0.60 a year ago.
On the economics calendar Thursday, initial jobless claims are due out. Also, the Treasury is set to auction 30-year bonds and speeches from the Fed's Daniel Tarullo and James Bullard are expected. Overnight, Chinese FDI data, the Bank of Japan's monthly report, and British retail sales data are due out and could move markets.
Good luck and good trading.
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