Benzinga Market Primer: Wednesday, July 30: Futures Higher After Asia Turnaround
Futures Higher After Asia Turnaround
U.S. equity futures rose slightly in early pre-market trade as Asian shares reversed losses from Monday and rose overnight. Market now look to earnings and the flood of economic data that begins today and continues through the rest of the week for direction.
In other news around the markets:
- J.P. Morgan Chase (NYSE: JPM) was charged by regulators of manipulating the power market and costing citizens over $70 million in additional power costs.
- Overnight, the People's Bank of China injected funds into the short-term lending market for the first time since February, finally acting to ease credit conditions.
- RBA Governor Glenn Stevens spoke overnight and hinted at more rate cuts to come at the August 6 meeting of the central bank.
- S&P 500 futures rose 0.7 points to 1,683.20.
- The EUR/USD was higher at 1.3273.
- Spanish 10-year government bond yields were flat at 4.68 percent.
- Italian 10-year government bond yields were flat at 4.46 percent.
- Gold fell 0.41 percent to $1,324.10 per ounce.
Asian shares were higher overnight on some positive economic news and also on a reversal of Monday's losses. The Japanese Nikkei 225 Index gained 1.53 percent and the Topix Index rose 1.78 percent. In Hong Kong, the Hang Seng Index rose 0.48 percent and the Shanghai Composite Index rose 0.7 percent in China. Also, the Korean Kospi rose 0.9 percent and Australian shares rose 0.02 percent.
European shares mixed but roughly unchanged in early trade on little news. The Spanish Ibex Index fell 0.12 percent and the Italian FTSE MIB Index rose 0.1 percent. Meanwhile, the German DAX rose 0.08 percent while the French CAC 40 Index fell 0.03 percent and U.K. shares rose 0.14 percent.
Commodities were lower overnight as the dollar gained back some losses. WTI Crude futures fell 0.68 percent to $103.84 per barrel and Brent Crude futures declined 0.2 percent to $107.24 per barrel. Copper futures fell 0.84 percent to $308.15 per pound. Gold was lower and silver futures declined 1.33 percent to $19.60 per ounce.
Currency markets were on the move as the Aussie dollar plunged on comments from Governor Stevens. The EUR/USD was higher at 1.3273 and the dollar rose against the yen to 98.03. Overall, the Dollar Index rose 0.1 percent on strength against the pound, the Canadian dollar, and the yen. Notably, the AUD/USD declined 1.5 percent to 0.9068 and the AUD/JPY fell 1.41 percent to 88.9070.
Key companies that reported earnings Monday include:
- Herbalife (NYSE: HLF) reported second quarter EPS of $1.41 vs. $1.18 expected on revenue of $1.22 billion vs. $1.16 billion expected.
- Wynn Resorts (NYSE: WYNN) reported second quarter EPS of $1.51 vs. $1.57 expected on revenue of $1.33 billion vs. $1.34 billion expected.
- U.S. Steel (NYSE: X) reported a second quarter loss of $0.54 per share vs. an expected loss of $0.79 per share on revenue of $4.43 billion vs. $4.61 billion expected.
- Roper Industries (NYSE: ROP) reported second quarter EPS of $1.16 vs. $1.30 expected on revenue of $784 million vs. $806.67 million expected.
Stocks moving in the pre-market included:
- Mosaic (NYSE: MOS) shares fell 6.28 percent as the world's largest potash produced, OAO Uralkali forecast global prices will fall 25 percent.
- Potash (NYSE: POT) shares fell 9.23 percent pre-market on the same news.
- Herbalife (NYSE: HLF) shares rose 5.42 percent pre-market after reporting better than expected earnings and raising full year guidance.
- Alcoa (NYSE: AA) rose 0.5 percent pre-market after U.S. Steel (NYSE: X) reported a narrower than expected loss and also on its newly announced $1 billion accelerated buyback program.
Notable companies expected to report earnings Tuesday include:
- BP (NYSE: BP) is expected to report second quarter EPS of $1.13 vs. $1.16 a year ago on revenue of $62.35 billion vs. $99.34 billion a year ago.
- Pfizer (NYSE: PFE) is expected to report second quarter EPS of $0.55 vs. $0.62 a year ago on revenue of $13.03 billion vs. $15.06 billion a year ago.
- Aetna (NYSE: AET) is expected to report second quarter EPS of $1.40 vs. $1.31 a year ago on revenue of $11.9 billion vs. $8.83 billion a year ago.
- Merck (NYSE: MRK) is expected to report second quarter EPS of $0.83 vs. $1.05 a year ago on revenue of $11.22 billion vs. $12.31 billion a year ago.
- Dollar General (NYSE: DG) is expected to report second quarter EPS of $0.74 vs. $0.69 a year ago on revenue of $4.36 billion vs. $3.95 billion a year ago.
On the economics calendar Tuesday, the weekly Redbook is due out followed by the S&P Case-Shiller Home Price Index and the CB Consumer Confidence Report. The Treasury is also expected to auction 4-week bills. Overnight, the German retail sales and unemployment reports 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 Monday's market action, read Benzinga's daily market wrap here.
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