Benzinga Market Primer: Tuesday, June 18
Futures Edge Higher In Calm Before the Storm
U.S. equity futures rose slightly in pre-market trade Tuesday as investors eagerly awaited the FOMC decision and statement Wednesday. Monday trading was a whip-saw marked by a steep sell-off over tapering fears.
In other news around the markets:
- The German ZEW Economic Sentiment Index rose to 38.5, beating expectations of a reading of 38.1 and better than the prior 36.4.
- European Central Bank President spoke in Jerusalem overnight and hinted that the LTRO operations could be extended as a means of providing additional bank liquidity. Speculation had grown that the ECB could do this however it is the first time Draghi has addressed it directly.
- European car sales fell to a 20-year low in May as new car registrations fell to 1.08 million from 1.15 million a year ago. Sales at General Motors (NYSE: GM) fell over 10 percent.
- S&P 500 futures rose 2.8 points to 1,636.50.
- The EUR/USD was higher at 1.3396.
- Spanish 10-year government bond yields fell 1 basis point to 4.57 percent.
- Italian 10-year government bond yields fell 1 basis point to 4.26 percent.
- Gold fell 0.41 percent to $1,377.40 per ounce.
Asian shares were mixed overnight in unusually quiet trading as markets eagerly anticipate the Fed's decision, the proverbial calm before the storm. The Japanese Nikkei 225 Index declined 0.2 percent and the Topix Index gained 0.15 percent. Shares in Hong Kong were flat while the Shanghai Composite Index gained 0.41 percent. Also, the Korean Kospi rose 0.93 percent while Australian shares fell 0.24 percent.
European shares were mixed overnight ahead of the Fed following mixed regional economic data. The Spanish Ibex Index rose 0.41 percent and the Italian FTSE MIB Index gained 0.16 percent. Meanwhile, the German DAX fell 0.32 percent and the French CAC 40 fell 0.31 percent while the U.K. FTSE rose 0.36 percent.
Commodities were weaker overnight, erasing Monday's gains. WTI Crude futures fell 0.2 percent to $97.57 per barrel and Brent Crude futures declined 0.19 percent to $105.27 per barrel. Copper futures fell 0.75 percent to $317.35 per pound. Gold was lower and silver futures fell 0.22 percent to $21.71 per ounce.
Currency markets sang a familiar tune overnight as the yen and the Australian dollar weakened precipitously. The EUR/USD was higher at 1.3396 and the dollar gained against the yen to 95.14. Overall, the Dollar Index fell 0.17 percent on weakness against the euro and the Canadian dollar.Gen
Earnings Reported Yesterday
Key companies that reported earnings Monday include:
- Korn/Ferry International (NYSE: KFY) reported fourth quarter EPS of $0.32 vs. $0.31 expected on revenue of $238.6 million vs. $223.58 million.
Stocks moving in the pre-market included:
- GenMark Diagnostics (NASDAQ: GNMK) shares fell 4.74 percent pre-market after the company lowered full-year revenue guidance.
- Rambus (NASDAQ: RMBS) shares climbed 3.85 percent pre-market after the company signed a new contract with STMicroelectronics (NYSE: STM).
- New Mountain Finance Corp. (NYSE: NMFC) shares declined 3.16 percent pre-market after the company announced a secondary offer.
Notable companies expected to report earnings Tuesday include:
- Adobe (NASDAQ: ADBE) is expected to report second quarter EPS of $0.34 vs. $0.60 a year ago.
- FactSet Research Systems (NYSE: FDS) is expected to report third quarter EPS of $1.15 vs. $1.05 a year ago.
- La-Z-Boy Inc. (NYSE: LZB) is expected to report fourth quarter EPS of $0.28 vs. $0.18 a year ago.
On the economics calendar Tuesday, CPI and the NAHB Home Price Index are due out as well as the Redbook and Housing Starts. Overnight, the Japanese Trade Balance and the Bank of England's MPC Minutes 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.
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