Benzinga Market Primer: Friday, June 28: End of Month Edition
Futures Rise On Better Japan Data
U.S. equity futures rose in early pre-market trade following lots of stronger than expected economic data from Japan. Better manufacturing data as well industrial production figures boosted assets pre-markets as fears that the massive stimulus will fail abated partially.
In other news around the markets:
- PBOC Governor Zhou gave a speech overnight on the state of the liquidity crisis among Chinese banks. His words seemed to ease fears as he talked down the risk of a full-scale banking crisis.
- German retail sales jumped 0.8 percent in May vs. April on expectations of a modest gain of 0.2 percent.
- One other strong data point in Japan was housing starts, which rose 14.5 percent on a year-over-year basis vs. the 6.2 percent expected rise. A jump in housing starts could mean that Japanese citizens are preparing for inflation by investing in real estate, which tends to be a store of value in inflationary situations.
- S&P 500 futures rose 5.1 points to 1,611.70.
- The EUR/USD was higher at 1.3049.
- Spanish 10-year government bond yields fell 5 basis points to 4.72 percent ahead of the budget statement.
- Italian 10-year government bond yields fell 5 basis points to 4.52 percent.
- Gold fell 0.83 percent to $1,201.50 per ounce.
Asian shares were mostly stronger overnight on the better Japan data and relaxed China fears. The Japanese Nikkei 225 Index rose 3.51 percent and the Topix Index gained 3.19 percent. In Hong Kong, the Hang Seng Index rose 1.78 percent while the Shanghai Composite Index gained 1.5 percent in China. Also, the Korean Kospi rose 1.56 percent but Australian shares declined 0.18 percent.
European shares were mixed in thin trade early following the strong move in Asia overnight. The Spanish Ibex Index rose 0.03 percent and the Italian FTSE MIB Index declined 0.54 percent. Meanwhile, the German DAX rose 0.01 percent and the French CAC 40 Index fell 0.23 percent while U.K. shares inched higher by 0.06 percent.
Commodities were on the move while energy futures rose and gold hovered just above $1,200 per ounce. WTI Crude futures rose 0.49 percent to $97.53 per barrel and Brent Crude futures gained 0.34 percent to $103.17 per barrel. Copper futures fell 0.07 percent to $305.75 per pound. Gold was lower and silver futures rose 1.41 percent to $18.82 per ounce.
Currency markets were on the move overnight as the yen weakened following some of the economic data. The EUR/USD was higher at 1.3049 and the dollar gained against the yen by 0.69 percent to 99.03. Overall, the Dollar Index rose 0.06 percent on strength against the yen, the pound, and the Swiss franc.
Key companies that reported earnings Thursday include:
- Accenture PLC (NYSE: ACN) reported third quarter EPS of $1.14 vs. $1.13 expected on revenue of $7.2 billion vs. $7.42 billion a year ago. However, revenue guidance for the fourth quarter was below forecast.
- Nike (NYSE: NKE) reported fourth quarter EPS of $0.76 vs. $0.75 expected on revenue of $6.7 billion vs. $6.64 billion expected.
- ConAgra Foods (NYSE: CAG) reported fourth quarter EPS of $0.60 vs. $0.59 expected on revenue of $4.59 billion vs. $4.61 billion expected.
- Commercial Metals (NYSE: CMC) reported third quarter EPS of $0.16 vs. $0.18 expected on revenue of $1.8 billion vs. $1.93 billion expected.
- KB Homes (NYSE: KBH) reported a second quarter loss of $0.04 per share vs. an expected loss of $0.07 per share on revenue of $524.4 million vs. $450.8 million expected.
Stocks moving in the pre-market included:
- Accenture (NYSE: ACN) shares declined 7.75 percent pre-market following some weak guidance.
- Pfizer (NYSE: PFE) shares rose 1.1 percent pre-market as the board authorized an additional $10 billion share buyback plan.
- Nike (NYSE: NKE) shares declined 0.91 percent pre-market as investors realized that the next quarter may be slower for the company following some inventory and backlog data released in the earnings report.
- United Continental Holdings (NYSE: UAL) shares fell 0.81 percent pre-market on some mixed guidance from the company for the current quarter.
Notable companies expected to report earnings Friday include:
- Blackberry (NASDAQ: BBRY) is expected to report first quarter EPS of $0.09 vs. a loss of $0.37 per share a year ago on revenue of $3.377 billion vs. $2.814 billion a year ago.
- The Finish Line (NASDAQ: FINL) is expected to report first quarter EPS of $0.16 vs. $0.24 a year ago on revenue of $344.22 million vs. $319.05 million a year ago.
On the economics calendar Friday, the Chicago PMI and the final reading of the Reuters/University of Michigan Consumer Confidence Index are due out as well as the GDP report from Canada. Also, Fed members Jeremy Stein, Jeffrey Lacker, and John Williams are expected to speak. Monday morning, its manufacturing PMI day as PMIs from the eurozone should be released ahead of the U.S. open.
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.
For a recap of Monday's market action, read Benzinga's daily market wrap here.
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