Benzinga Market Primer: Wednesday, March 6
Futures Higher on Global Services Data
U.S. equity futures rose in the pre-market after the Dow Jones Industrial Average posted a new all time closing high and on the back of stronger than expected services PMIs around the world. Notably, the ISM Non-Manufacturing Index in the U.S. beat expectations with employment and new orders sub-indexes remaining strong.
In other news around the markets:
- Eurozone GDP for the fourth quarter was confirmed at a 0.6 percent contraction in the latest revision, in line with estimates and the same as the prior estimate.
- Spanish Treasury Minister Montoro spoke overnight saying that Spain's budget remains strong and any revision to the deficit forecast for 2013 would be downwards from the 6.7 percent estimate.
- Australian fourth quarter GDP was reported as growing 0.6 percent in the quarter or 3.1 percent annualized, in line with expectations though boosted by a 25 percent jump in government spending. Third quarter GDP growth was revised higher to 0.7 percent from 0.5 percent.
- S&P 500 futures rose 5.7 points to 1,542.80.
- The EUR/USD was lower at 1.3031.
- Spanish 10-year government bond yields fell to 5.00 percent.
- Italian 10-year government bond yields fell to 4.64 percent.
- Gold fell 0.05 percent to $1,574.00 per ounce.
Asian shares were stronger overnight following the strength seen in Europe and American stocks Tuesday on the back of strong services data. The Japanese Nikkei Index rose 2.13 percent and the Shanghai Composite Index rose 0.9 percent while the Hang Seng Index gained 0.96 percent. Also, the Korean Kospi rose 0.2 percent and Australian shares gained 0.86 percent.
European shares were higher led by German shares boosted by industrial stocks. The Spanish Ibex Index rose 0.53 percent and the Italian FTSE MIB Index rose 0.11 percent. Meanwhile, the German DAX rose 0.98 percent and the French CAC rose 0.3 percent while U.K. shares gained 0.23 percent.
Commodities were mostly lower overnight despite news that Venezuelan President Hugo Chavez has died. WTI Crude futures fell 0.26 percent to $90.58 per barrel and Brent Crude futures fell 0.31 percent to $111.30. Copper futures declined 0.28 percent to $350.45 per pound despite stronger than expected Australian GDP data. Gold was lower and silver futures rose 0.2 percent to $28.66.
Currency markets were relatively quiet overnight save for the Swiss franc. The EUR/USD was lower at 1.3031 and the dollar gained against the yen to 93.90. Overall, the Dollar Index rose 0.11 percent on strength against the Swiss franc, the pound, the euro and the yen. Notably, the USD/CHF rose 0.4 percent and the EUR/CHF rose 0.23 percent showing broad franc weakness.
Stocks moving in the pre-market included:
- American Express (NYSE: AXP) rose 0.59 percent pre-market after announcing a new partnership with Twitter.
- J.C. Penney (NYSE: JCP) shares continued to slide pre-market, declining 1.00 percent after falling 10.63 percent Tuesday on news that Vornado (NYSE: VNO), a key ally of Bill Ackman's, sold its 10 million share stake. Also, the company is in court with Macy's (NYSE: M) over the use of the Martha Stewart brand name.
- Vodaphone (NYSE: VOD) shares rose 1.57 percent pre-market on reports that the company is considering selling its stake in Verizon (NYSE: VZ).
- Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) shares rose 0.53 percent pre-market as Warren Buffett continues to hint that more large deals are in the pipeline and continues to reject the idea of a dividend.
Notable companies expected to report earnings Wednesday include:
- American Eagle Outfitters (NYSE: AEO) is expected to report fourth quarter EPS of $0.56 vs. $0.35 a year ago.
- Coca-Cola Bottling Co. (NASDAQ: COKE) is expected to report fourth quarter EPS of $0.60 vs. $0.20 a year ago.
- PetSmart (NASDAQ: PETM) is expected to report fourth quarter EPS of $1.21 vs. $0.91 a year ago.
- Staples (NASDAQ: SPLS) is expected to report fourth quarter EPS of $0.45 vs. $0.41 a year ago.
- Vail Resorts (NYSE: MTN) is expected to report second quarter EPS of $1.70 vs. $1.27 a year ago.
On the economics calendar Wednesday, MBA Purchase Applications and ADP Payrolls are due out as well as Factory Orders and the Beige Book. Also, Charles Plosser of the Philadelphia Fed is set to speak and Richard Fisher of the Dallas Fed is set to speak twice. In addition, the Treasury is set to auction STRIPS. Overnight, Central Banks will be in focus as the Bank of Japan, Bank of England, and the European Central Bank all are set to release interest rate decisions.
Good luck and good trading.
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