Benzinga Market Primer: Thursday May 23

Things went from euphoric to worrisome on Wednesday as the Dow saw a 200 point swing. Technicians note that the charts show an outside reversal. In other words—cause for concern.

There is a global selloff taking place this morning with the Dow poised to print a triple digit loss at the open. Will it hold through the day or will we see another big reversal like we saw Wednesday?

Morning News

• S&P 500 futures are down 19.50 points to 1636
• The EUR/USD was up at 0.23 percent to 1.2886.
• German 10-year government bond yields fell 3 basis points to 1.375 percent.
• Italian 10-year government bond yields rose 8 basis points to 3.969 percent.
• Gold was up 1.58 percent to $1,389 per ounce.

Asia Pacific Markets

The Nikkei plunged 7.32 percent or 1143.23 to 14483.98. Weak Chinese data and the growing fear that the Fed might dial back its bond buying sooner than expected is causing a global selloff.

Other markets were mostly down. The Kopsi was down 1.24 percent, the Shanghai composite was down 1.16 percent, and the ASX 200, the Australian index, was down 2 percent.

European Markets

European markets aren’t immune from this morning’s selloff. The Spanish Ibex Index was down 2.3 percent and the Italian FTSE MIB Index was down 3 percent. Meanwhile, the German DAX was down 2.77 percent and the French CAC 40 shed 2.57 percent while the U.K. market was down 2 percent.

Commodities

Commodities were mostly lower with gold attracting some risk-off interest. WTI Crude futures fell 1.33 percent to $93.03 per barrel while Brent Crude futures fell 1.13 percent to $101.44 per barrel. Copper futures were down 2.28 percent to $330.35 and silver futures were up 0.08 percent to $22.49 per ounce.

Currencies

The Japanese Yen showed strength against the dollar, gaining 1.69 percent at101.41. The GBP/USD was up fractionally at 1.507, and the EUR/USD was up 0.27 percent to 1.2386.

Earnings Reported Wednesday

• Hewlett-PackardHPQ reported EPS of $0.87—seven percent higher than the consensus number of $0.81. Revenues were light at $27.58 versus an expectation of $28.51 billion.
• LowesLOW reported EPS of$0.49 versus estimates of $0.51 with revenues of $13.09 billion. Analysts expected $13.49 billion
• Limited BrandsLTD reported EPS $0.48 on revenues of $2.27 billion. Analysts expect $0.46 and $2.25 billion respectively.
• StaplesSPLS reported EPS of $0.26 versus estimates of $0.27. Revenues came in at $5.8 billion versus consensus of $5.93 billion.
• Target TGT reported EPS of $1.05 versus the consensus of $0.86 on revenues $16.71 billion. The street expected $16.85 billion

Thursday’s Earnings

• Sears HoldingsSHLD is expected to report EPS of -$0.65 with revenues of $8.16 billion.
• Gap, Inc.GPS is expected to report EPS of $0.57 with revenues of $3.68 billion
• Salesforce.com Inc.CRM is expected to report EPS of $0.10 with revenues of $887.1 million.
• Marvell TechnologyMRVL is expected to report EPS of $0.14 with revenues of $721.55 million.
• Pandora P is expected to report EPS of -$0.10 on revenues of $124.03 million.

Pre-Market Movers

• Hewlett-PackardHPQ is up 14 percent on better than expected earnings.
• GamestopGME is up 3.31 percent. The company will report earnings today.
• AMDAMD is down 4.04 percent
• CitigroupC is down 3.37 percent with the rest of the sector on yesterday’s fed comments.

Economics

Today, initial jobless claims will be reported at 8:30 am EST, new home sales at 10:00 am, and natural gas inventories at 10:30 am.

Have a great day and remember that in an overbought market, a selloff is healthy market behavior. Don’t trade on fear.