Benzinga Market Primer: Tuesday, April 9

Futures Rise On Alcoa Beat

U.S. equity futures rose slightly in pre-market trade following a positive report from economic bellwether Alcoa AA.

Alcoa reported first quarter EPS ex-items of $0.11 which beat estimates of $0.08 but sales fell slightly short of the forecast. Alcoa also reaffirmed its global aluminum forecast of seven percent growth and noted strong demand, especially from U.S. automakers and construction companies, and falling global supplies as key catalysts.

Top News

In other news around the markets:

• Ron Johnson has been ousted as CEO at J.C. Penney JCP and his replacement is former CEO Mike Ullman.


• Chinese inflation gained less than expected in March, a sign that the global economy may be slowing slightly from February. Chinese CPI rose 2.1 percent from a year ago in March, slower than forecasts of a rise of 2.4 percent, and producer prices fell 1.9 percent, bigger than the 1.8 percent decline forecast.


• Fed Chairman Ben Bernanke spoke overnight and hinted that any Fed exit policy would begin with hikes in the interest rate on excess reserves (IOER) and that asset sales would come much later, if at all.


• S&P 500 futures rose 2.2 points to 1,561.70.


• The EUR/USD was rose to 1.3035 after holding support at 1.3020.


• Spanish 10-year government bond yields fell to 4.74 percent from 4.75 percent.


• Italian 10-year government bond yields were flat at 4.35 percent.


• Gold rose 0.01 percent to $1,573.70 per ounce.

Asian Markets

Asian shares were mixed overnight as Japanese shares halted their post-Bank of Japan rally and Chinese shares rose on hopes of monetary easing in the face of slowing inflation. The Japanese Nikkei Index was flat overnight and the Shanghai Composite Index rose 0.64 percent while the Hang Seng Index rose 0.7 percent. Also, the Korean Kospi rose 0.11 percent and Australian shares popped 1.45 percent.

European Markets

European shares were higher overnight as Cyprus and Portugal fears blow over. The Spanish Ibex Index rose 0.92 percent and the Italian FTSE MIB Index rose 1.14 percent. Meanwhile, the German DAX rose 0.37 percent and the French CAC rose 0.48 percent while U.K. shares rose 0.48 percent.

Commodities

Commodities were modestly higher overnight despite the weakness in Chinese inflation. WTI Crude futures rose 0.22 percent to $93.60 and Brent Crude futures rose 0.41 percent to $105.07 per barrel. Copper futures rose 0.67 percent to $339.55 on both the Chinese news and the Alcoa guidance on the global economy. Gold was higher and silver futures rose 0.36 percent to $27.24.

Currencies

Currency markets took a proverbial breather overnight after the massive moves in the yen crosses over the past few days. The EUR/USD was higher at $1.3035 and the dollar fell against the yen to 98.84 after briefly probing the 100 level Monday. Overall, the Dollar Index fell 0.26 percent on weakness against the euro, the pound and the yen.

Earnings Reported Yesterday

Key companies that reported earnings Monday include:

• Alcoa AA reported first quarter EPS of $0.11 vs. estimates of $0.08 and better than the $0.10 reported a year ago. However, sales were light at $5.83 billion on forecasts of $5.89 billion.


• A. Schulman SHLM reported second quarter EPS of $0.27 vs. $0.40 a year ago, a miss of 32.5 percent.
• AngioDynamics ANGO reported third quarter EPS of $0.08 vs. estimates of $0.05. Sales were light at $81.6 million on forecasts of $81.7 million.


• Mistras Group MG reported third quarter EPS of $0.07 vs. estimates of $0.17. Revenue was slightly stronger than forecasts at $133.7 million vs. forecasts of $131.62 million.

Pre-Market Movers

Stocks moving in the pre-market included:

• Alcoa AA shares fell 0.6 percent in volatile trading after reporting a bottom-line beat but a bottom-line miss and reaffirming guidance.


• J.C. Penney JCP shares fell 5.1 percent pre-market after they announced the sacking of Ron Johnson.


• Cliff's Natural Resources CLF shares rose 2.45 percent pre-market on bullish sentiment for global metals and mining stocks following Alcoa earnings.


• Advanced Micro Devices AMD shares rose 0.77 percent pre-market on news that Microsoft MSFT is set to include the company's chips in its latest Xbox console update.

Earnings

Notable companies expected to report earnings Tuesday include:

• ADTRAN ADTN is expected to report first quarter EPS of $0.08 vs. $0.20 a year ago.


• PriceSmart PSMT is expected to report second quarter EPS of $0.77 vs. $0.67 a year ago.


• Supervalu SVU is expected to report fourth quarter EPS of $0.18 vs. $0.36 a year ago.

Economics

On the economics calendar Tuesday, the NFIB Small Business Optimism Index and ICSC chain store sales data are expected to be released, followed by the Redbook. Also, Fed President Lacker is set to speak and wholesale trade data is due out. In addition, the Treasury is set to auction 4-week bills and 3-year notes. Overnight, China's trade balance, French, Spanish, and Italian industrial production, and the latest OECD global economic forecasts are all due out.

Good luck and good trading.