#PreMarket Primer: Wednesday, November 20: Bernanke Confirms That The Fed Will Put Off Tapering
Comments from the Federal Reserve's current chief Ben Bernanke cemented investor expectations that the US central bank would hold off on tapering in December.
Bernanke, who surprised markets back in September when he opted not to begin the taper, said the bank was planning to continue with its quantitative easing plan for as long as was necessary. He also reiterated the bank's past sentiments, that a taper would begin once labor markets showed a marked, sustainable improvement.
In other news around the markets:
- The committee tasked with revamping Japan's Government Pension Investment Fund is set to release a report detailing their recommendations at 8:30 GMT on Wednesday. Most expect the panel to recommend that the fund be completely overhauled with changes to both its supervision as well as its investment strategy. The report is likely to suggest that the fund shift away from investments in benchmark passive equities to a new index that would be based on investment returns.
- Devon Energy is getting closer to buying GeoSouthern Energy Corp in a $6 billion dollar acquisition deal. The Wall Street Journal reported that the deal could be announced on Wednesday and would be the largest oil and gas transaction in 2013.
- With Black Friday on the horizon and the threat of a difficult holiday season with fewer shopping days between Thanksgiving and Christmas, large retailers are struggling to gain market share by offering deep discounts on this year's hottest electronics. Best Buy announced that it was planning to keep up with rivals like Wal-Mart by sharply lowering prices, even if it means cutting into the company's profits.
- A sizable jump in car shipments helped boost Japan's export data for October to its highest level in three years. The nation's exports increased by 18.6 percent last month, far surpassing analysts' predictions of a 16.5 percent increase and a sizable jump from September's 11.5 percent gain.
Asian shares were mostly lower with the exception of the Shanghai composite up 0.62 percent, the Shenzhen composite, up 0.70 percent and the Hang Seng index, up 0.33 percent. The Japanese NIKKEI lost 0.33 percent and the South Korean KOSPI was down 0.72 percent.
Europe's markets were moderately lower, the UK's FTSE lost 0.12 percent and the eurozone's STOXX 600 lost 0.10 percent. The Spanish IBEX was down 0.18 percent and Italy's MIB was down 0.07 percent.
Bernanke's comments helped boost commodity markets, energy futures were higher with Brent futures up 0.10 percent and WTI futures up 0.29 percent. Gold was flat and silver gained 0.55 percent. Industrial metals were up across the board with copper up 0.57 percent and aluminum up 0.62 percent.
The euro reached above $1.35 on Wednesday and the pound gained 0.06 percent against the dollar. The dollar lost 0.15 percent against the yen and gained 0.49 percent against the Australian dollar.
Notable earnings released on Tuesday included:
- Home Depot, Inc (NYSE: HD) reported third quarter EPS of $0.95 on revenue of $19.50 billion, compared to last year’s EPS of $0.88 on revenue of $18.13 billion.
- Medtronic, Inc. (NYSE: MDT) reported second quarter EPS of $0.91 on revenue of $4.19 billion, compared to last year’s EPS of $0.88 on revenue of $4.10 billion.
- Campbell Soup Company (NYSE: CPB) reported third quarter EPS of $0.63 on revenue of $2.17 billion, compared to last year’s EPS of $0.88 on revenue of $2.34 billion.
- TJX Companies, Inc. (NYSE: TJX) is expected to report third quarter EPS of $0.75, compared to last year’s EPS of $0.62 on revenue of $6.41 billion.
- Best Buy Co., Inc (NYSE: BBY) reported third quarter EPS of $0.18 on revenue of $9.36 billion, compared to last year’s EPS of $0.04 on revenue of $10.75 billion.
Stocks moving in the Premarket included:
- J.C. Penney Company, Inc. (NYSE: JCP) continued to rise after gaining 1.26 percent on Tuesday and gained 1.03 percent in premarket trade
- Best Buy Co. Inc. (NYSE: BBY) gained 0.75 percent in premarket trade after falling 10.97 percent on Tuesday
- Cabot Oil & Gas Corp (NYSE: COG) rose 0.63 percent in premarket trade after choppy trading took the stock down 1.25 percent over the past five days.
- JP Morgan Chase and Co (NYSE: JPM) lost 0.27 percent in premarket trade after gaining 4.04 percent over the past week.
Notable earnings expected on Wednesday include:
- J.C. Penney Company, Inc. (NYSE: JCP) is expected to report a third quarter loss of $1.75 per share on revenue of $2.80 billion, compared to last year’s loss of $0.93 per share on revenue of $2.93 billion.
- Green Mountain Coffee Roasters (NASDAQ: GMCR) is expected to report fourth quarter EPS of $0.75 on revenue of $966.27 million, compared to last year’s EPS of $0.64 on revenue of $946.74 million.
- Limited Brands, Inc. (NYSE: LTD) is expected to report third quarter EPS of $0.28 on revenue of $2.17 billion, compared to last year’s EPS of $0.36 on revenue of $2.05 billion.
- Lowe's Companies, Inc. (NYSE: LOW) is expected to report third quarter EPS of $0.48 on revenue of $12.72 billion, compared to last year’s EPS of $0.40 on revenue of $12.07 billion.
- Staples, Inc. (NASDAQ: SPLS) is expected to report third quarter EPS of $0.42 on revenue of $6.18 billion, compared to last year’s EPS of $0.46 on revenue of $6.35 billion.
US data will dominate Wednesday's economic calendar with several important releases including FOMC minutes, existing home sales, retail sales and CPI data. Investors will also be focused on the Bank of England's meeting minutes, German PPI and the Spanish trade balance.
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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