#PreMarket Primer: Wednesday, November 6: ECB Under Pressure
After the EU released a lackluster forecast for the future of the eurozone, many are calling for the region’s central bank to step in and ease its policies.
The report said the region will grow only moderately and unemployment rates will remain at record highs through 2015. Government austerity and private sector debt cutting were cited as reasons for suppressing the region’s growth prospects.
With the European Central Bank’s monthly policy meeting coming up on Thursday, some are looking to the bank to lower interest rates and help support the region’s fragile recovery.
In other news around the markets:
- With Microsoft CEO Steve Ballmer’s retirement coming up this summer, the company has narrowed its list of potential candidates. Those being considered include Nokia’s former CEO Stephen Elop and former Skype CEO Tony Bates.
- The Organization for the Prohibition of Chemical Weapons, the group responsible for destroying Syria’s chemical weapons supply, may not have enough money to continue operating past November. The OPCW has raised nearly 10 million euros, but will need a great deal more in order to move forward with destroying over 1,000 tons of Syrian chemical weapons.
- The bank of Japan released its October policy meeting minutes with few surprises. The minutes showed that the bank had a favorable outlook for the region’s economy and prices, but that all members agreed on the need for caution as US monetary policy rocks markets.
- John Chen has been named as Blackberry’s new CEO, where he faces an uphill battle to breathe life into the company. Chen said he isn’t planning to do away with the company’s handset division and although he has been vague about his strategic plans, he has said he thinks he can turn the company around in just six quarters.
Asian markets were mixed on Wednesday, the Japanese NIKKEI was up 0.79 percent but China’s Shanghai composite lost 0.78 percent and the Shenzhen composite was down 1.13 percent. Hong Kong’s Hang Seng index gained 0.05 percent and Indonesia’s JSX composite was up 0.08 percent.
European markets slid as poor inflation data and a weak EU forecast painted a gloomy picture of the bloc’s future. The UK’s FTSE was down 0.25 percent and the eurozone’s STOXX 600 was flat. Italy’s MIB also fell, down 1.13 percent.
Energy futures climbed on Wednesday, Brent futures were up 0.59 percent and WTI futures gained 0.58 percent. Precious metals were also higher with gold up 0.41 percent and silver up 0.43 percent. Industrial metals were mixed with tin up 1.28 percent and aluminum down 0.56 percent.
The euro treaded water ahead of the ECB meeting and traded at $1.35 and the pound gained 0.22 percent against the dollar. The dollar was higher against the yen and the Australian dollar, up 0.14 percent on both.
Notable earnings released on Tuesday included:
- Tesla Motors, Inc. (NASDAQ: TSLA) reported EPS of $0.12, compared to last year’s loss of $0.92 per share on revenue of $535.41 million.
- Agrium Inc (NYSE: AGU) reported EPS of $0.50 on revenue of $2.87 billion, compared to last year’s EPS of $1.34 on revenue of $2.96 billion.
- DIRECTV (NASDAQ: DTV) reported third quarter EPS of $1.28 on revenue of $7.88 billion, compared to last year’s EPS of $0.90 on revenue of $7.42 billion.
- Mosaic Company (NYSE: MOS) reported third quarter EPS of $0.51 on revenue of $1.91 billion, compared to expected EPS of $0.56 on revenue of $1.98 billion.
Stocks moving in the Premarket included:
- Blackberry Limited (NASDAQ: BBRY)gained 1.92 percent in premarket trade after the company’s new CEO announced that he planned to turn Blackberry around in just 6 quarters.
- Facebook, Inc. (NASDAQ: FB) lost 0.93 percent after reports that the company’s userbase was declining.
Earnings reports expected on Wednesday include:
- Humana Inc. (NYSE: HUM) is expected to report EPS of $2.14 on revenue of $10.27 billion, compared to last year’s EPS of $2.62 per share on revenue of $9.65 billion.
- Duke Energy Corporation (NYSE: DUK) is expected to report EPS of $1.53 on revenue of $7.38 billion, compared to last year’s EPS of $1.47 on revenue of $6.72 billion.
- Time Warner Inc. (NYSE: TWX) is expected to report third quarter EPS of $0.89 on revenue of $6.93 billion, compared to last year’s EPS of $0.86 on revenue of $6.84 billion.
- CenturyLink, Inc. (NYSE: CTL) is expected to report third quarter EPS of $0.63 on revenue of $4.51 billion, compared to last year’s EPS of $0.66 on revenue of $4.57 billion.
Wednesday’s economic calendar will be dominated by data from Europe including British industrial production and manufacturing production, German factory orders, and eurozone retail sales and services PMI. Investors will also be anticipating US crude oil inventory data and Canadian building permits.
For a recap of Tuesday’s market action, click here.
Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.
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