Benzinga Market Primer, Monday June 17

Futures Gain On Fed Hopes

U.S. equity futures advanced in early pre-market trade ahead of the much anticipated FOMC meeting this week, which concludes Wednesday. Despite recent fears of tapering, the Fed is expected to downgrade its economic forecasts near consensus economist forecasts which could increase dovish rhetoric in the policy statement.

Top News

In other news around the markets:

• The Spanish government blocked AT&T's T bid for Telefonica, Europe's most indebted telecommunications company, citing its strategic position to the Spanish economy.


• Bloomberg reported that Boeing BA is expected to announce a new order of 10 787 Dreamliners from General Electric's GE aircraft leasing unit.


• Time Warner's TWX Man of Steel, the relaunch of the Superman movie series, became the second-most successful movie of the year after the film made $113 million in its first weekend, behind only Iron Man 3.


• S&P 500 futures rose 10.8 points to 1,629.90.


• The EUR/USD was lower at 1.3337.


• Spanish 10-year government bond yields were flat at 4.58 percent.


• Italian 10-year government bond yields fell to 4.28 percent from 4.29 percent.


• Gold declined 0.07 percent to $1,386.60 per ounce.

Asian Markets

Asian shares were mixed overnight as the Nikkei recovered some recent losses. The Japanese Nikkei 225 Index gained 2.73 percent and the Topix Index rose 2.68 percent. In China, the Shanghai Composite Index fell 0.25 percent while the Hang Seng Index rose 1.08 percent in Hong Kong. Also, the Korean Kospi declined 0.32 percent and Australian shares rose 0.71 percent.

European Markets

European shares were mostly higher in early trade as well save for Italian stocks. The Spanish Ibex Index gained 0.54 percent while the Italian FTSE MIB Index declined 0.78 percent. Meanwhile, the German DAX rose 0.8 percent and the French CAC 40 gained 0.62 percent while U.K. shares rose 0.55 percent.

Commodities

Commodities were mixed overnight as markets awaited the Fed's decision later this week. WTI Crude futures were flat at $97.85 per barrel and Brent Crude futures were flat as well at $105.93 per barrel. Copper futures rose 0.64 percent to $322.20 per pound. Gold was lower and silver futures declined 0.34 percent to $21.88 per ounce.

Currencies

Currency markets some tentative dollar strength overnight as the euro fell and the yen both fell against the dollar. The EUR/USD was lower at 1.3337 and the dollar gained against the yen to 94.94. Overall, the Dollar Index rose 0.14 percent on strength against the yen, the Swiss franc, and the euro.

Earnings Reported Yesterday

Key companies that reported earnings Friday include:

• American Semiconductor AMSC reported a fourth quarter loss of $0.21 per share, in line, on revenues of $20.4 million vs. $18.8 million expected. However, first quarter guidance was well below expectations.


• Smithfield Foods SFD reported fourth quarter EPS of $0.21 vs. $0.43 on revenue of $3.22 billion vs. $3.27 billion expected.

Earnings

Notable companies expected to report earnings Monday include:

• China Sunergy CSUN is expected to report a first quarter loss of $1.01 per share vs. a loss of $0.71 per share a year ago.


• IHS Inc. IHS is expected to report second quarter EPS of $1.03 vs. $0.97 a year ago.


• Korn/Ferry International KFY is expected to report fourth quarter EPS of $0.31 vs. $0.28 a year ago.

Economics

On the economics calendar Monday, the OECD Composite Leading Indicators are due out at 6 am, followed by the Empire State Manufacturing Index and the NAHB Home Price Index. In addition, the Fed's Bullard is expected to speak at 9:50 and the Treasury is set to hold its weekly auction of 3- and 6-month bills. Overnight, the Bank of Japan press conference and the British Industrial Production report are due out.

Good luck and good trading.

Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.

For a recap of yesterday's market action, read Benzinga's daily market wrap here.