Benzinga Market Primer, Friday June 21

Futures Rise On Quadruple Witching

U.S. equity futures gained in early pre-market trade Friday after Thursday's sell off as Chinese lending rates eased. The overnight SHIBOR rate fell to 7.9 percent from 12.8 percent and the seven day repo rate fell 8.1 percent from 11.6 percent Thursday.

Top News

In other news around the markets:

• The CME CME hiked margins on gold and platinum after the close Thursday. Gold margins were raised 25 percent while platinum margins increased 12.5 percent.




• The current account for the Eurozone for April declined less than expected to 19.5 billion euros from 25.9 billion euros vs. the expected 14.2 billion euros.


• S&P 500 futures rose 8.8 points to 1,592.70.


• The EUR/USD was lower at 1.3214.


• Spanish 10-year government bond yields fell 1 basis point to 4.86 percent.


• Italian 10-year government bond yields fell 2 basis points to 4.56 percent.


• Gold rose 0.58 percent to $1,293.70 per ounce.

Asian Markets

Asian shares were mostly lower save for Japanese stocks which gained on stimulus hopes. The Japanese Nikkei 225 Index rose 1.66 percent and the Topix Index gained 0.7 percent. In Hong Kong, the Hang Seng Index fell 0.59 percent and the Shanghai Composite Index shed 0.5 percent in China. Also, the Korean Kospi fell 1.49 percent and Australian shares declined 0.41 percent.

European Markets

European shares were mostly higher following positive comments from EU leaders at the EU summit as well as the better than expected current account data. The Spanish Ibex Index rose 0.14 percent and the Italian FTSE MIB Index gained 0.56 percent. Meanwhile, the German DAX rose 0.32 percent and the French CAC 40 gained 0.8 percent while U.K. shares rose 0.53 percent.

Commodities

Commodities were bouncing off the lows overnight following the Fed's decision and global growth fears sparked by weak Chinese manufacturing data. WTI Crude futures were flat at $95.40 per barrel and Brent Crude futures rose 0.84 percent to $103.01 per barrel. Copper futures rose 0.28 percent to $308.00 per pound, bouncing off the lows. Gold was higher despite margin hikes and silver futures fell 0.44 percent to $19.74 per ounce.

Currencies

Currency markets were much more quiet than Thursday in early trade but the dollar continued to show modest strength. The EUR/USD was lower at 1.3214 and the dollar gained against the yen by 0.56 percent to 97.82. Overall, the Dollar Index was flat on strength against the euro, the pound, and the yen despite weakness against the Canadian dollar.

Earnings Reported Yesterday

Key companies that reported earnings Thursday include:

• Kroger KR reported first quarter EPS of $0.92 vs. $0.88 expected on revenue of $30.04 billion vs. $30.2 billion expected. The company also raised guidance for the full year.


• Oracle ORCL reported fourth quarter EPS of $0.87, in line with forecasts, on revenue of $10.95 billion vs. $11.12 billion expected. However, guidance for the first quarter was slightly weak.


• Pier 1 Imports PIR reported first quarter EPS of $0.19, in line, on revenue of $394.95 million vs. $395.02 million expected. The company also raised full year guidance which was still below Wall Street forecasts.
• Rite Aid RAD reported first quarter EPS of $0.09, in line, on revenue of $6.29 billion vs. $6.27 billion expected. However, full year guidance was weak.

Pre-Market Movers

Stocks moving in the pre-market included:

• Oracle ORCL shares fell 8.31 percent as the company reported lighter than expected revenue and guided below forecasts.


• Five Below FIVE shares rallied 4.25 percent pre-market after the company postponed its proposed secondary offering.

Earnings

Notable companies expected to report earnings Friday include:

• CarMax KMX is expected to report second quarter EPS of $0.58 vs. $0.52 a year ago.


• Darden Restaurants DRI is expected to report fourth quarter EPS of $1.04 vs. $1.15 a year ago.


• Discover Financial DFS is expected to report second quarter EPS of $1.14 vs. $1.21 a year ago.

Economics

On the economics calendar Friday, the Canadian CPI and retail sales reports are expected ahead of the ECRI Weekly Index. Also, note that it is a quadruple witching day. Monday morning, look out for the German IFO Business Climate Index.

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.