#PreMarket Primer: Tuesday, November 5: Fed Speakers Calm Taper Nerves
Several US central bankers spoke late on Monday about the US Federal Reserve’s taper plans.
The speakers, which included the Boston Fed’s Eric Rosengren, St. Louis Fed President James Bullard and Fed Board Governor Jerome Powell, all reiterated that the bank’s stimulus program will continue until data indicates that the US can stand on its own and unemployment has fallen.
In other news around the markets:
- As investor demand picked up ahead of Twitter’s highly anticipated IPO, the company decided to raise the higher end of its price range by 25 percent, making the shares $23 to $25 per share. Reuters reported that final pricing could increase further due to the strong demand among institutional investors.
- BlackBerry shares plummeted on Monday afternoon following an announcement that the company was no longer up for sale and that its CEO was stepping down. Instead, Blackberry is planning to issue convertible notes to long term investors in order to raise $1 billion.
- In what many are considering to be a historic settlement, SAC Capital Advisors LP agreed to pay $1.8 billion and plead guilty to an insider trading indictment. The settlement marks the largest ever financial penalty for an insider trading offense.
- The US and the EU are planning to move forward with free trade negotiations over the next two months despite rising tension over US NSA spying revelations. If followed through, a pact between the two sides could help both regions boost economic growth by cutting tariffs and creating common regulations, all of which would lower the cost of doing international business.
Asian markets were mixed this morning, the Japanese NIKKEI was up 0.17 percent, China’s Shanghai composite was up 0.35 percent and the Shenzhen composite gained 0.95 percent. However the Hang Seng index fell 0.65 percent and Indonesia’s JSX composite was down 0.21 percent.
European markets were down across the board, the UK’s FTSE lost 0.62 percent and the eurozone’s STOXX 600 lost 0.30 percent. The German DAX lost 0.40 percent and France’s CAC 40 was down by 0.43 percent.
Energy futures were quiet with Brent futures up 0.03 percent and WTI futures down 0.18 percent. Precious metals were also down with gold falling 0.24 percent and silver down 0.23 percent. Industrial metals followed suit with aluminum posting the largest loss, down 1.14 percent.
The euro continued to lose ground against the dollar ahead of the ECB meeting, down 0.14 percent. The pound gained 0.55 percent against the dollar and the yen gained 0.32 percent against the greenback
Notable earnings released on Monday included:
- Plains All American Pipeline, L.P. (NYSE: PAA) reported third quarter EPS of $0.53 on revenue of $10.70 billion, compared to last year’s EPS of $0.73 per share on revenue of $9.35 billion.
- Hill International, Inc. (NYSE: HIL) reported EPS of $0.06 on revenue of $142.00 million, compared to last year’s EPS of $0.03 on revenue of $103.56 million.
- CME Group Inc. (NASDAQ: CME) reported third quarter EPS of $0.75 on revenue of $714.60 million, compared to last year’s EPS of $0.70 on revenue of $683.20 million.
- Kellogg Company (NYSE: K) reported third quarter EPS of $0.95 on revenue of $3.72 billion, compared to last year’s EPS of $0.82 on revenue of $3.72 billion.
Stocks moving in the Premarket included:
- Johnson & Johnson (NYSE: JNJ) gained 0.18 percent in premarket trade after a week of choppy trading.
- General Motors Co. (NYSE: GM) lost 1.25 percent in premarket trade following a 4.66 percent rise over the past week.
- Alcoa Inc. (NYSE: AA) lost 1.01 percent in premarket trade after jumping 7.01 percent on Monday.
- Exxon Mobil Corp (NYSE: XOM) lost 0.21 percent in premarket trade after climbing 4.39 percent over the past week.
Earnings reports expected on Tuesday include:
- Tesla Motors, Inc. (NASDAQ: TSLA) is expected to report EPS of $0.11 on revenue of $50.10 million, compared to last year’s loss of $0.92 per share on revenue of $535.41 million.
- Health Net Inc. (NYSE: HNT) is expected to report EPS of $0.60 on revenue of $2.72 billion, compared to last year’s EPS of $0.38 on revenue of $2.78 billion.
- DIRECTV (NASDAQ: DTV) is expected to report third quarter EPS of $1.03 on revenue of $7.85 billion, compared to last year’s EPS of $0.90 on revenue of $7.42 billion.
- Sandridge Energy Inc. (NYSE: SD) is expected to report third quarter EPS of $0.00 on revenue of $448.62 million, compared to last year’s EPS of $0.05 on revenue of $532.80 million.
More PMI data will be out on Tuesday including British and Indian services PMI. Other notable releases include the US ISM non-manufacturing index, Canada’s trade balance and eurozone PPI.
For a recap of Monday’s market action, click here.
Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.
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