#PreMarket Primer: Monday, January 27: Markets Open The Week On Edge
Emerging market currencies and European stocks were on the decline on Monday morning which caused investors to worry about another market confidence crisis.
Several factors have converged over the past week to create panic among investors and spark sell offs across the globe.
Weak economic data from China and the possibility of further tapering from the US Federal Reserve have been the main drivers of the sell off, with opinions split about whether or not it will continue.
In other news around the markets:
- The lfo institute's business confidence index indicated that German business sentiment improved more than expected in January. The survey of around 7,000 companies rose to 110.6 from 109.5, its highest reading since July 2011. The data, released on Monday, indicated that the eurozone's largest economy is set to experience robust growth in 2014.
- Ukrainian anti-government protests escalated over the weekend after tens of thousands of protestors surrounded government buildings across the nation on Sunday. Protestors have been calling for President Viktor Yanukovych's removal from office for the past two months after he turned his back on an alliance with the EU.
- On Monday, AT&T made a statement to the London Stock Exchange denying rumors that the company was planning to bid for Vodafone. Many believe AT&T is apprehensive about buying into Europe as competition between providers has driven prices down significantly.
- Samsung and Google strengthened their existing alliance by signing a cross-licensing technology patent. The deal will create the opportunity for both companies to collaborate further on upcoming products.
Asian markets were down across the board as the market suffered a crisis of confidence. The Japanese NIKKE was down 2.51 percent, China's Shanghai composite was down 1.03 percent and the Shenzhen composite lost 0.72 percent. Indonesia's JSX composite lost 2.58 percent and the Hang Seng index fell 2.11 percent.
European markets also started the week off on a low note; the UK's FTSE was down 1.20 percent and the eurozone's STOXX 600 lost 0.79 percent. The German DAX fell 0.37 percent and Italy's MIB was down 1.11 percent.
Energy futures were mixed with Brent futures down 0.23 percent and WTI futures down 0.42 percent. Gold gained 0.41 percent and silver was up 0.91 percent. Industrial metals were mixed with copper up 0.24 percent but zinc down 1.25 percent.
Emerging market currencies were on the decline on Monday as investors worried about whether or not the Fed was planning to continue reducing its stimulus spending. The Argentine peso fell 1.14 percent against the dollar and the Indian rupee was down 0.96 percent. The euro was steady against the dollar at $1.3682 and the pound rose 0.49 percent against the greenback. The Japanese yen lost 0.28 percent against the dollar and the Australian dollar gained 0.51 percent against the American currency.
Notable earnings released on Friday included:
- Procter & Gamble Company (NYSE: PG) reported second quarter EPS of $1.21 on revenue of $22.28 billion, compared to last year's EPS of $1.22 on revenue of $22.18 billion.
- Honeywell International Inc. (NYSE: HON) reported fourth quarter EPS of $1.24 on revenue of $10.39 billion, compared to last year's EPS of $1.10 on revenue of $9.58 billion.
- Xerox Corporation (NYSE: XRX) reported fourth quarter EPS of $0.29 on revenue of $5.57 billion, compared to last year's EPS of $0.30 on revenue of $5.92 billion.
- Kimberly-Clark Corporation (NYSE: KMB) reported fourth quarter EPS of $1.44 on revenue of $5.31 billion, compared to last year's EPS of $1.37 on revenue of $5.31 billion.
- Bristol-Myers Squibb Company (NYSE: BMY) reported fourth quarter EPS of $0.51 on revenue of $4.44 billion, compared to last year's EPS of $0.47 on revenue of $4.19 billion.
Stocks moving in the Premarket included:
- Perrigo Company PLC (NYSE: PRGO) rose 0.40 percent in premarket trade after falling 1.53 percent on Friday.
- Alcoa Inc. (NYSE: AA) was down 0.79 percent in premarket trade after losing 5.22 percent on Friday.
- Pfizer Inc. (NYSE: PFE) lost 0.47 percent in premarket trade after falling 3.22 percent last week.
- Johnson & Johnson (NYSE: JNJ) fell 0.29 percent in premarket trade after losing 4.68 percent over the past week.
Notable earnings releases expected on Monday include:
- Apple Inc. (NASDAQ: AAPL) is expected to report first quarter EPS of $14.08 on revenue of $57.40 billion, compared to last year's EPS of $13.81 on revenue of $54.51 billion.
- United States Steel Corporation (NYSE: X) is expected to report a fourth quarter loss of $0.26 per share on revenue of $4.34 billion, compared to last year's loss of $0.41 on revenue of $4.49 billion.
- Seagate Technology (NASDAQ: STX) is expected to report second quarter EPS of $1.38 on revenue of $3.56 billion, compared to last year's EPS of $1.38 on revenue of $3.67 billion.
- Ashland Inc. (NYSE: ASH) is expected to report first quarter EPS of $1.31 on revenue of $1.87 billion, compared to last year's EPS of $1.12 on revenue of $1.87 billion.
Monday's economic calendar will be relatively quiet, with releases including US new home sales, US services PMI, German business expectations and the German lfo business climate index.
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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