Benzinga Market Primer: Thursday, February 21

Futures Lower on Weak European Manufacturing Data

U.S. equity futures fell in pre-market trading following weak Eurozone manufacturing PMI's. The Eurozone manufacturing PMI for February fell to 47.8 from 47.9 in January, worse than forecasts of a reading of 48.5, with weakness in France and Germany weighing on the broad Eurozone measure.

Top News

In other news around the markets:

• China's Leading Economic Index rose nearly one percent in January to 253.4, faster than the 0.4 percent gain seen in December, a large jump and a bullish sign for the Chinese and global economies.


• Several members of the FOMC warned in the recent minutes that the committee should be prepared to taper purchases even before economic targets have been met.


• Spain and France issued more than 12 billion euros in bonds with Spanish yields falling from the previous auction while French yields ticked higher.


• S&P 500 futures fell 4.2 points to 1,502.90.


• The EUR/USD was fell to 1.3172.


• Spanish 10-year government bond yields fell to 5.18 percent.


• Italian 10-year government bond yields rose to 4.46 percent.


• Gold fell 0.65 percent to 1,567.70 per ounce.

Asian Markets

Asian shares were sharply lower overnight on fears over liquidity and the housing bubble in China. The Japanese Nikkei Index fell 1.39 percent and the Shanghai Composite Index fell a whopping 2.97 percent and the Hang Seng Index fell 1.72 percent. Also, the Korean Kospi fell 0.47 percent and Australian shares fell hard with Chinese ones by 2.33 percent.

European Markets

European shares were lower in early trade following the weaker than expected PMI data for February. The Spanish Ibex Index fell 1.24 percent and the Italian FTSE MIB Index fell 2.42 percent ahead of the Italian parliamentary elections this weekend. Meanwhile, the German DAX fell 1.48 percent and the French CAC fell 1.44 percent while U.K. shares fell 1.48 percent.

Commodities

Commodities were also sharply overnight, reflecting the broad risk-off environment of global markets. WTI Crude futures fell 1.23 percent to $94.46 per barrel and Brent Crude futures fell 0.87 percent to $114.62 per barrel. Copper futures fell 1.41 percent to $357.45 per pound. Gold was lower and silver futures fell 0.5 percent to $28.48 per ounce.

Currencies

Currency markets were in flux overnight as the euro weakened and the yen rose. The EUR/USD was lower by 0.84 percent at 1.3172 and the dollar fell against the yen to 93.16. Overall, the Dollar Index rose 0.48 percent on strength against the euro, the pound, the Swiss franc and the Canadian dollar.

Pre-Market Movers

Stocks moving in the pre-market included:

• Tesla Motors TSLA shares fell 6.07 percent pre-market as the company reported a wider than expected quarterly loss.


• VeriFone Systems PAY shares declined a whopping 33.74 percent after the company missed earnings estimates and slashed guidance.


• Michael Kors KORS shares rose 0.57 percent pre-market after the company priced its secondary offering at $61.50 per share.


• TRW Automotive Holdings TRW shares fell 1.48 percent pre-market after the company commenced the book building for its secondary offering.

Earnings

Notable companies expected to report earnings Thursday include:

• AIG AIG is expected to report a fourth quarter loss of $0.09 per share vs. EPS of $0.82 a year ago.


• Hewlett-Packard HPQ is expected to report fourth quarter EPS of $0.71 vs. $0.92 a year ago.


• Nordstrom JWN is expected to report fourth quarter EPS of $1.34 vs. $1.11 a year ago.


• Wal-Mart WMT is expected to report fourth quarter EPS of $1.57 vs. $1.44 a year ago.


• WedMD Health Corp. WBMD is expected to report a fourth quarter loss of $0.04 per share vs. EPS of $0.33 a year ago.

Economics

On the economics calendar Thursday, CPI inflation, jobless claims and the Flash Manufacturing PMI are due out. Later, existing home sales data, the Philly Fed Survey, and leading indicators are expected. Also, James Bullard, Richard Fisher and John Williams of the Fed are set to speak and the Treasury will auction 30-year TIPS. Overnight, the latest revision to German GDP and the German IFO Business Climate Index could move markets.

Good luck and good trading.