Benzinga Market Primer: Wednesday, April 24

Futures Higher on Global Stimulus Hopes

U.S. equity futures rose in pre-market trade as investors became increasingly hopeful of more global easing following weaker than expected economic data around the world. Also, Goldman Sachs upgraded global equities to overweight from neutral overnight, saying investors should hold an overweight position in equities for the next three months.

Top News

In other news around the markets:

• The German IFO Business Climate Index for April declined to 104.4 in April from 106.7 in March on expectations of a reading of 106.2. The chief economist at the IFO said that he does not expect an ECB rate cut next week and sees more growth in Q2 than in Q1.


• Apple AAPL reported fiscal second quarter results that were largely in line and the company announced an additional $50 billion stock buyback increasing the total program to $60 billion. Apple is also selling debt to fund a higher dividend and the buyback and was downgraded slightly overnight by ratings agencies due to this new debt.


• Twitter is reeling from a massive hack yesterday which saw hackers break into the Associated Press' twitter account and post a fake tweet saying that bombs had gone off and injured the President. Market shuddered but quickly recouped losses on the news.


• S&P 500 futures rose 3.8 points to 1,577.40.


• The EUR/USD was higher at 1.3018.


• Spanish 10-year government bond yields declined to 4.26 percent from 4.27 percent.


• Italian 10-year government bond yields fell to 3.94 percent from 3.95 percent.


• Gold rose 1.17 percent to $1,425.30 per ounce.

Asian Markets

Asian shares were higher overnight as the yen weakened boosting Japanese equities and also on the Goldman call. The Japanese Nikkei Index rose 2.32 percent and the Shanghai Composite Index bounced back by 1.55 percent while the Hang Seng Index added 1.73 percent. Also, the Korean Kospi gained 0.87 percent and Australian shares rose 1.72 percent despite weaker than expected inflation data.

European Markets

European shares were mostly overnight save for Italian equities on hopes of an ECB rate cut next week. Credit Suisse, UBS, Barclays and Commerzbank all recently updated forecasts and expect a rate cut next week now. The Spanish Ibex Index rose 1.03 percent as the Italian FTSE MIB Index declined 0.4 percent. Meanwhile, the German DAX rose 0.39 percent while the French CAC rose 0.64 percent and U.K. shares gained 0.28 percent.

Commodities

Commodities were higher overnight as risk appetite improved on hopes of further central bank stimulus and increased equity risk appetite. WTI Crude futures rose 0.78 percent to $89.88 per barrel and Brent Crude futures gained 0.73 percent to $101.04 per barrel. Copper futures added 1.87 percent to $316.20 per pound on hopes of a rebound in the Chinese economy. Gold was higher and silver futures gained 0.72 percent to $23.03 per ounce.

Currencies

Currency markets were rather quiet overnight as the yen continued to slide and the euro ticked higher. The EUR/USD was higher at 1.3018 and the dollar rose against the yen to 99.58. Overall, the Dollar Index fell 0.13 percent on weakness against the euro, the pound, and the Swedish krone.

Earnings Reported Yesterday

Key companies that reported earnings Tuesday include:

• Apple AAPL reported fiscal second quarter EPS of $10.09 vs. $10.07 expected on revenue of $43.6 billion vs. $42.6 billion. The company also boosted its dividend to $3.05 per share and increased the stock buyback by $50 billion to $60 billion but cut guidance for both revenue and margins, noting a higher amount of iPad sales than expected is hurting margins.


• Amgen AMGN reported first quarter EPS of $1.96 vs. $1.84 on revenue of $4.24 billion vs. $4.37 billion expected.
• Broadcom BRCM reported first quarter EPS of $0.65 vs. $0.56 expected on revenue of $2.01 billion vs. $1.91 billion expected.


• CoachCOH reported first quarter EPS of $0.84 vs. $0.81 expected on revenue of $1.19 billion vs. $1.18 billion expected.


• Cree Inc. CREE reported third quarter EPS of $0.19 vs. $0.34 expected on revenue of $105.2 million vs. $104.0 million expected.


• Delta Air Lines DAL reported first quarter EPS of $0.10 vs. $0.06 a year ago on revenue of $8.5 billion vs. $8.51 billion expected.


• Lockheed Martin LMT reported first quarter EPS of $2.33 vs. $2.03 expected on revenue of $11.07 billion vs. $10.31 billion expected.


• Norfolk Southern NSC reported first quarter EPS of $1.22 vs. $1.15 on revenue of $2.74 billion vs. $2.76 billion expected.


• AT&T T reported first quarter EPS of $0.64 vs. $0.64 on revenue of $31.4 billion vs. $31.75 billion expected.


• Yum! Brands YUM reported first quarter EPS of $0.70 vs. $0.57 on revenue of $2.54 billion vs. $3.03 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• Yum! Brands YUM shares rose 4.46 percent pre-market after reporting stronger than expected earnings.


• Amgen AMGN shares fell 6.21 percent pre-market following weaker than expected revenue.


• Newmont Mining NEM shares rose 1.11 percent pre-market as metals prices rose.


• FedEx FDX shares rose 1.21 percent pre-market after beating out UPS UPS for a $10.5 billion U.S. Postal Service contract.

Earnings

Notable companies expected to report earnings Wednesday include:

• Boeing BA is expected to report first quarter EPS of $1.47 vs. $1.22 a year ago.


• Ford Motor Corp. F is expected to report first quarter EPS of $0.39 vs. $0.39 a year ago.


• Hess HES is expected to report first quarter EPS of $1.59 vs. $1.50 a year ago.


• NASDAQ OMX Group NDAQ is expected to report first quarter EPS of $0.62 vs. $0.61 a year ago.


• Qualcomm QCOM is expected to report second quarter EPS of $1.16 vs. $1.01 a year ago.


• Proctor & Gamble PG is expected to report third quarter EPS of $0.96 vs. $0.94 a year ago.


• Zynga ZNGA is expected to report a first quarter loss of $0.04 per share vs. EPS of $0.06 a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications and the Durable Goods Report is expected as well as a 5-year note auction from the Treasury. Overnight, the Spanish unemployment rate and the latest look at British GDP are expected to be released.

Good luck and good trading.