Benzinga Market Primer Friday, August 16
Futures Higher After Tapering Sell-Off
U.S. equity futures rose in early Friday trade after a sell-off on Thursday driven by fears that the Federal Reserve will begin reeling in its asset purchases in September. Also, weak sales guidance from Cisco (NASDAQ: CSCO) and Wal-Mart (NYSE: WMT) weighed on sentiment.
In other news around the markets:
- The Shanghai Composite flash spiked overnight on what appears to be a fat finger trade. China's securities regulator has attributed the spike to a firm called Everbright Trading and the firm has asked to cancel trades made during the spike.
- A 6.8 magnitude earthquake struck just near Wellington, New Zealand overnight. No tsunami warning was issued and there have been no reports of wide-spread injuries.
- The Eurozone's CPI for July came in exactly in line with expectations with CPI inflation falling 0.5 percent from a month ago and rising 1.6 percent from a year ago.
- S&P 500 futures rose 1.5 points to 1,657.20.
- The EUR/USD was lower at 1.3334.
- Spanish 10-year government bond yields fell 1 basis point to 4.45 percent.
- Italian 10-year government bond yields fell 1 basis point to 4.24 percent.
- Gold rose 0.21 percent to $1,363.70 per ounce.
Asian shares were lower across the board overnight following weakness in the U.S. from Thursday. The Japanese Nikkei 225 Index fell 0.75 percent and the Topix Index declined 0.8 percent. In Hong Kong, the Hang Seng Index fell 0.1 percent while the Shanghai Composite Index closed lower by 0.64 percent in China. Also, the Korean Kospi declined 0.2 percent and Australian shares fell 0.75 percent.
European shares were lower as well overnight in thin trading. The Spanish Ibex Index fell 0.21 percent and the Italian FTSE MIB Index declined 0.43 percent. Meanwhile, the German DAX fell 0.39 percent and the French CAC 40 Index declined 0.34 percent while U.K. shares rose 0.19 percent.
Commodities were little changed overnight on thin volume. WTI Crude futures fell 0.03 percent to $107.30 per barrel and Brent Crude futures declined 0.06 percent to $109.53 per barrel. Copper futures rose 0.94 percent to $337.20 per pound. Gold was higher and silver futures gained 0.24 percent to $22.99 per ounce.
Currency markets were quiet overnight. The EUR/USD was lower at 1.3334 and the dollar gained against the yen. Overall, the Dollar Index rose 0.08 percent on strength against the Canadian dollar, the Swiss franc, the yen, the euro, and the pound.
Key companies that reported earnings Thursday include:
- Dell (NASDAQ: DELL) reported second quarter EPS of $0.25 vs. $0.24 expected on revenue of $14.5 billion vs. $14.18 billion expected.
- Wal-Mart (NYSE: WMT) reported second quarter EPS of $1.25, in line, on revenue of $116.9 billion vs. $119.7 billion expected. The company also cut its full year EPS outlook.
- Nordstrom (NYSE: JWN) reported second quarter EPS of $0.93 vs. $0.88 expected on revenue of $3.2 billion vs. $3.29 billion expected. However, the company cut its outlook for the full year.
- Kohl's (NYSE: KSS) reported second quarter EPS of $1.04 vs. $1.05 expected on revenue of $4.29 billion vs. $4.3 billion expected.
- Perigo (NYSE: PRGO) reported fourth quarter EPS of $1.57 vs. $1.56 expected on revenue of $1.00 billion vs. $831.77 million expected.
Stocks moving in the pre-market included:
- Green Mountain Coffee Roasters (NASDAQ: GMCR) shares rose 0.23 percent in pre-market trade as the company will be joining the NASDAQ 100 Index replacing Life Technologies (NASDAQ: LIFE).
- Nordstrom (NYSE: JWN) shares fell 2.33 percent pre-market after the company beat EPS estimates but missed revenue estimates and cut guidance for the full year. The company also said that no margin expansion in the next few years.
- Facebook (NASDAQ: FB) shares rose 0.98 percent pre-market after the company announced an expansion of its borrowing ability under its credit facility to $6.5 billion from $5.0 billion. The new facility replaces the old one.
- Joseph A. Bank (NASDAQ: JOSB) shares fell 6.44 percent pre-market as the company issued a mid-quarter update. The company now sees Q2 EPS $0.49.0.53 vs. $0.68 expected.
There are no notable earnings scheduled to be reported Friday.
On the economics calendar Friday, housing starts, productivity and costs and the Reuters/University of Michigan Consumer Sentiment Index are due out.
Good luck and good trading.
Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.
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