Benzinga Market Primer: Tuesday, May 14
Futures Slightly Lower on Mixed European Data
U.S. equity futures traded slightly lower in early pre-market trade following mixed economic data out of the eurozone. The moves follow basically flat trading on Wall Street from Monday after futures rallied into the open following weaker than expected Chinese data.
In other news around the markets:
- The German ZEW Economic Sentiment Index rose to 36.4 in May from 36.3 in April but missed expectations of a gain to 38.3. The current conditions index was also weak and over 77 percent of respondents said they do not expect another rate cut in the next six months.
- Industrial Production across the eurozone rose faster than expected in March as IP rose 1.0 percent vs. a 0.4 percent forecast gain.February's reading was revised downwards to 0.3 percent from 0.4 percent.
- Australia's just released budget for the next fiscal year sees growth at 3 percent, alleviating some fears of a more protracted slowdown in the resource-rich nation.
- S&P 500 futures fell 2.8 points to 1,628.00.
- The EUR/USD was higher at 1.3006.
- Spanish 10-year government bond yields rose 3 basis points to 4.32 percent.
- Italian 10-year government bond yields rose 3 basis points to 4.01 percent.
- Gold rose 0.05 percent to $1,435.00 per ounce.
Asian shares were mostly lower overnight as the yen retreated from recent lows against the dollar. The Japanese Nikkei Index fell 0.16 percent and the Shanghai Composite Index fell 1.11 percent while the Hang Seng Index lost 0.26 percent. Also, the Korean Kospi gained 1.03 percent and Australian shares rose 0.2 percent.
European shares were mostly lower following the mixed economic data. The Spanish Ibex Index fell 0.6 percent and the Italian FTSE MIB Index declined 0.22 percent. Meanwhile, the German DAX declined 0.21 percent and the French CAC 40 lost 0.43 percent while U.K. shares fell 0.1 percent.
Commodities were mixed overnight in quiet moves as the dollar gave back some of its recent gains, boosting commodity prices. WTI Crude futures rose 0.02 percent to $95.19 per barrel and Brent Crude futures rose 0.07 percent to $102.89 per barrel. Copper futures declined 1.56 percent to $330.70 on headlines from the Australian budget noting that mining investment is falling at a faster rate than initially thought. Gold was higher and silver futures declined 0.26 percent to $23.64.
Currency markets were in reversal overnight as the dollar gave back some of its recent gains against major pairs. The EUR/USD was higher at 1.3006 and the dollar fell against the yen to 101.57. Overall, the Dollar Index fell 0.24 percent on weakness against the Swiss franc, the yen, the euro, and the pound.
Earnings Reported Yesterday
Key companies that reported earnings Monday include:
- InterOil (NYSE: IOC) reported first quarter EPS of $0.08 vs. an expected loss of $0.12 per share on revenue of $350.3 million vs. $331.46 million expected.
- Take-Two Interactive (NASDAQ: TTWO) reported first quarter EPS of $0.38 vs. $0.23 on revenue of $299.5 million vs. $280.36 million expected.
Stocks moving in the pre-market included:
- WPX Energy (NYSE: WPX) shares rose 6.96 percent pre-market after being positively recommended by Rational's Guy Gottfried last week at the Value Investing Conference.
- Take-Two Interactive (NASDAQ: TTWO) shares rose 5.73 percent pre-market after beating earnings estimates.
- Sony (NYSE: SNE) shares rose 1.59 percent pre-market after Dan Loeb recommended the company split up to save itself from bankruptcy.
- Nokia(NYSE: NOK) shares fell 5.47 percent pre-market after investors did not like the release of the company's latest phone.
Notable companies expected to report earnings Tuesday include:
- Valspar Corp. (NYSE: VAL) is expected to report second quarter EPS of $0.91 vs. $0.84 a year ago.
- Voxx International (NASDAQ: VOXX) is expected to report fourth quarter EPS of $0.19 vs. $0.46 a year ago.
On the economics calendar Tuesday, the NFIB Small Business Optimism Index is expected to be released while same store sales, import and export prices, and the Redbook are also expected. In addition, the Treasury is expected to auction 4-week bills. Overnight, eurozone GDP data is due out as well as British employment data.
Good luck and good trading.
Click here to view Benzinga's Market Wrap for Monday, May 13.
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