Market Overview

#PreMarket Primer: Thursday, January 23: Syrian Peace Conference Off To A Volatile Start

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The much anticipated Syrian peace conference got off to a rocky start on Wednesday in Montreux, Switzerland. US Secretary of State John Kerry started the talks off by calling for Syrian President Bashar al-Assad's removal from power.

Syrian Foreign Minister Walid al-Moallem countered by saying the US and its allies were supporting terrorist groups.

The tumultuous beginning added to doubt that the negotiations would provide a diplomatic solution to the crisis in Syria. The deep divide between the two sides is unlikely to be bridged anytime soon. However, a UN mediator has said that the two may agree to more practical next steps such as cease fires and humanitarian aid which would ease the suffering for civilians.

Top News

In other news around the markets:

  • On Wednesday, McDonald's fought back against media allegations that the company has avoided 2.2 billion euros worth of taxes in France over the past five years. McDonald's France Vice President Alexis Bourdon said the company has paid all the required taxes according to current legislation. The French ministry has said they are keeping a close eye on the situation, but have not made any specific allegations yet.
  • Activist investor Carl Icahn has acquired a 0.82 percent stake of eBay's shares and nominated two people to the company's board as he works to coerce eBay to cut out its payment unit, PayPal. Following Icahn's proposal, eBay shares rose 5 percent in after hours trading.
  • Lenovo Group Ltd, the largest PC maker in the world, has made a deal to buy IBM's low end server business in a $2.3 billion deal. Lenovo announced the details of the deal to the Hong Kong exchange on Thursday, marking China's largest ever tech acquisition.
  • Eurozone PMI data helped offset disappointment from news that China's factory activity fell for the first time in six months on Thursday morning. The weak Chinese data added fuel to worries that the country's slowdown was worsening, but eurozone PMI rose to 53.2 in January from 52.1 in December and improved confidence in the region. Led by a strong performance in Germany, the eurozone PMI figure was well above analysts' forecasts.

Asian Markets

Asian markets were weaker on Thursday, the Japanese NIKKEI was down 0.79 percent and China's Shanghai composite lost 0.47 percent. The South Korean KOSPI lost 1.16 percent and the Hang Seng index fell 1.51 percent.

European Markets

Despite better than expected PMI figures, European markets were mixed. The UK's FTSE fell 0.12 percent and the eurozone's STOXX 600 was down 0.03 percent. The German DAX lost 0.13 percent, but France's CAC 40 was up 0.17 percent.

Commodities

Energy futures were mixed, Brent futures lost 0.13 percent and WTI futures were up 0.12 percent. Precious metals were higher with gold up 0.54 percent and silver up 1.27 percent. Industrial metals were mostly lower with aluminum posting the largest losses, down 0.86 percent.

Currencies

The euro rained 0.63 percent against the dollar and rose to $1.3631 and the pound rose 0.11 percent against the greenback. The dollar lost 0.17 percent against the yen but gained 0.59 percent against the Australian dollar.

Earnings

Notable earnings released on Wednesday included:

  • eBay Inc. (NASDAQ: EBAY) reported fourth quarter EPS of $0.81 on revenue of $4.50 billion, compared to last year’s EPS of $0.55 on revenue of $3.40 billion.
  • Netflix, Inc. (NASDAQ: NFLX) reported fourth quarter EPS of $0.79 on revenue of $1.18 billion, compared to last year’s EPS of $0.13 on revenue of $945.24 million.
  • United Technologies Corporation (NYSE: UTX) reported fourth quarter EPS of $1.58 on revenue of $16.76 billion, compared to last year’s EPS of $1.04 on revenue of $16.44 billion.
  • Western Digital Corporation (NASDAQ: WDC) reported second quarter EPS of $2.19 on revenue of $3.97 billion, compared to last year’s EPS of $2.09 on revenue of $3.82 billion

Pre-Market Movers

Stocks moving in the Premarket included:

  • International Business Machines (NYSE: IBM) gained 0.69 percent in premarket trade after losing 3.28 percent on Wednesday.
  • AT&T Inc. (NYSE: T) rose 0.48 percent in premarket trade after falling 0.69 percent on Wednesday.
  • Alcoa Inc (NYSE: AA) lost 1.23 percent in premarket trade after gaining 18.41 percent over the past week.
  • Cliffs Natural Resources Inc. (NYSE: CLF) lost 0.85 percent in premarket trade after fallnig 7.95 percent over the past week.
  • Chipotle Mexican Grill Inc. (NYSE: CMG) fell 0.55 percent in premarket trade after falling 1.83 percent on Wednesday.

Earnings

Notable earnings releases expected on Thursday include:

  • Microsoft Corporation (NASDAQ: MSFT) is expected to report second quarter EPS of $0.68 on revenue of $23.68 billion, compared to last year’s EPS of $0.76 on revenue of $21.46 billion.
  • Lockheed Martin Corporation (NYSE: LMT) is expected to report fourth quarter EPS of $1.99 on revenue of $11.34 billion, compared to last year’s EPS of $1.91 on revenue of $12.10 billion.
  • McDonald's Corporation (NYSE: MCD) is expected to report fourth quarter EPS of $1.39 on revenue of $7.11 billion, compared to last year’s EPS of $1.38 on revenue of $6.95 billion.
  • Southwest Airlines Company (NYSE: LUV) is expected to report fourth quarter EPS of $0.29 on revenue of $4.39 billion, compared to last year’s EPS of $0.09 on revenue of $4.17 billion.

Economics

Thursday will be a busy day for economic releases, investors will be watching for US crude oil inventories, US existing home sales, US manufacturing PMI, US initial and continuing jobless claims, eurozone consumer confidence, and Canadian retail sales.

For a recap of Wednesday's market action click here.

Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.

Posted-In: Earnings News Eurozone Previews Events Global Economics Federal Reserve Best of Benzinga

 

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