Benzinga Market Primer, Tuesday March 5

Futures Higher on Strong European Services Data

U.S. equity futures rallied in early pre-market trade following stronger than expected Non-Manufacturing PMI data from the Eurozone and the U.K. The Eurozone services PMI rose to 47.9 in February from 47.3 in January on expectations of a flat reading month-over-month. Also, the U.K. Non-Manufacutring PMI rose to 51.8 from 51.5 in January, beating expectations of a reading of 51.

Top News

In other news around the markets:

• The Reserve Bank of Australia kept rates on hold at 3.00 percent. The accompanying statement was slightly more optimistic on the global economy despite recent poor Chinese data however the Bank still said that there is room for more accommodative policy.


• European regulators issued a statement overnight indicating that Spain's bank reform plan is on track so far and that the Bad Bank plan is working.


• The China HSBC Services PMI confirmed the official Non-Manufacturing PMI released over the weekend by falling to 52.1 in February from 54 in January. However, it is yet to be seen if this slowdown is due to transitory effects emanating from the Lunar New Year Holiday.


• S&P 500 futures rose 3.60 points to 1,529.30.


• The EUR/USD was higher at 1.3043.


• Spanish 10-year government bond yields fell to 5.06 percent.


• Italian 10-year government bond yields fell to 4.77 percent.


• Gold rose 0.53 percent to $1,580.80 per ounce.

Asian Markets

Asian shares were higher in overnight trade following large losses Monday. The Japanese Nikkei Index rose 0.27 percent and the Shanghai Composite Index rose 2.33 percent while the Hang Seng Index gained 0.1 percent. Also, the Korean Kospi rose 0.17 percent and Australian shares rallied 1.29 percent following the RBA rate decision.

European Markets

European shares were higher following the stronger than expected services PMI data. The Spanish Ibex Index rose 1.19 percent and the Italian FTSE MIB Index gained 1.86 percent. Meanwhile, the German DAX rose 1.67 percent and the French CAC gained 1.38 percent and U.K. shares added 0.73 percent.

Commodities

Commodities were stronger overnight after oil touched a new 2013 low Monday. WTI Crude futures rose 0.31 percent to $90.41 per barrel and Brent Crude futures rose 0.57 percent to $110.72 per barrel. Copper futures rose 0.63 percent to $352.40 following the RBA decision. Gold was higher and silver futures gained 1.35 percent to $28.88 per ounce.

Currencies

Currency markets showed broad sterling strength overnight as the yen strengthened as well. The EUR/USD was higher at 1.3043 and the dollar fell against the yen to 93.13 while the pound rose to 1.5168 against the dollar. Overall, the Dollar Index fell 0.2 percent on weakness against the pound, the yen, and the euro.

Pre-Market Movers

Stocks moving in the pre-market included:

• Marathon Petroleum Cop. MPC shares rose 0.12 percent pre-market after the stock climbed 5.62 percent Monday to a new all-time high. The stock has more than doubled in the last 52-weeks.


• United States Steel X shares rose 1.25 percent pre-market on bullish options market activity.


• Berkshire Hathaway BRK BRK rose 0.93 percent pre-market as Warren Buffett has indicated that he is "on the hunt for more elephants."


• J.C. Penney JCP shares fell 1.43 percent pre-market on reports that a large shareholder is set to sell a 10 million share block.

Earnings

Notable companies expected to report earnings Tuesday include:

• Checkpoint Systems CHP is expected to report fourth quarter EPS of $0.17 vs. a loss of $0.10 per share a year ago.


• Qihoo 360 Technology Co. QIHU is expected to report fourth quarter EPS of $0.17 vs. $0.20 a year ago.


• Smith and Wesson Holding Corp. SWHC is expected to report third quarter EPS of $0.23 vs. $0.07 a year ago.

Economics

On the economics calendar Tuesday, chain store sales and the Redbook are due out followed by the ISM Non-Manufacturing Index, the first major indicator ahead of Friday's payrolls report. Also, the Treasury is set to auction 4- and 52-week bills and the Fed's Jeffrey Lacker is set to speak. Overnight, Australian and Eurozone GDP data are due out and a speech from Bank of England Governor Mervyn King as well as a German 5-year bond auction should move markets.

Good luck and good trading.