Market Overview

#PreMarket Primer: Friday, January 31: Emerging Market Turmoil Spills Over Into Europe

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This week European emerging markets were pulled into the massive selloff that has taken hold elsewhere.

On Thursday, the Hungarian Forint lost nearly one percent against the dollar and Polish zloty and Czech koruna were not far behind.

The dip showed that investors’ fear of overseas investment was broad. It remains to be seen whether the slide in European emerging markets will persist, but if the trend continues it will underscore the spreading emerging market turmoil.

Top News

In other news around the markets:

  • US GDP figures showed that the world’s largest economy grew at an annual rate of 3.2 percent in the fourth quarter. The figure is down from the 4.1 percent growth rate in the third quarter, however when combined, the final two quarters of 2013 show the strongest growth since 2003.
  • Tension between the US and Syria inflamed on Thursday after the Obama administration accused the Syrian government of intentionally delaying the removal of chemical weapons. Syrian President Bashar al-Assad’s regime is set to miss its next deadline for its next shipment of chemical weapons which could threaten the already fragile relationship between Syria and Western powers.
  • Rumor has it that Microsoft is nearing the end of its search for a new CEO and that the most likely candidate will come from inside the company. Many speculate that Satya Nadella, Microsoft’s cloud-computing head, will be appointed as the company’s next chief executive.
  • Amazon.com missed the mark with its earnings release which took the company’s stock down over four percent on Thursday. The company’s profits for the holiday season were lower than expected and investors were turned off by warnings about a possible operating loss this quarter.

Asian Markets

Asian markets were mixed to end the week; the Japanese NIKKE was down 0.62 percent, China’s Shanghai composite lost 0.82 percent and the Shenzhen composite fell 0.88 percent. However the South Korean KOSPI rose 1.26 percent and New Zealand’s NZ50 rose 0.51 percent.

European Markets

European markets were quiet; the UK’s FTSE rose 0.08 percent and the eurozone’s STOXX 600 was down 0.02 percent. The German DAX lost 0.37 percent and France’s CAC 40 gained 0.11 percent.

Commodities

Energy futures for March delivery were lower on Friday; Brent futures lost 0.08 percent and WTI futures were down 0.38 percent. Gold lost 0.07 percent but silver was up 0.05 percent to $19.14 per ounce. Industrial metals were down across the board with aluminum posting the largest loss, down 0.75 percent.

Currencies

Emerging market currencies continued to suffer on Friday as investors pulled their money out of risky assets. The dollar strengthened against most of its peers, up 0.11 percent against the pound, 0.29 percent against the Canadian dollar, and 0.32 percent against the Australian dollar.

Earnings

Notable earnings released on Thursday included:

  • Google Inc. (NASDAQ: GOOG) reported fourth quarter EPS of $12.01 on revenue of $13.60 billion, compared to last year’s EPS of $10.59 on revenue of $12.16 billion.
  • Exxon Mobil Corporation (NYSE: XOM) reported fourth quarter EPS of $1.91 on revenue of $110.86 billion, compared to last year’s EPS of $2.20 on revenue of $115.17 billion.
  • Occidental Petroleum Corporation (NYSE: FB) reported fourth quarter EPS of $1.72, compared to last year’s EPS of $1.83 on revenue of $6.17 billion.
  • Chipotle Mexican Grill, Inc. (NYSE: CMG) reported fourth quarter EPS of $2.53 on revenue of $844.10 million, compared to last year’s EPS of $1.95 on revenue of $699.16 million.
  • Eli Lilly and Company (NYSE: LLY) reported fourth quarter EPS of $0.74 on revenue of $5.81 billion, compared to last year’s EPS of $0.85 on revenue of $5.96 billion.

Pre-Market Movers

Stocks moving in the Premarket included:

  • AbbVie Inc. (NYSE: ABBV) gained 2.46 percent in premarket trade after rising 1.47 percent on Thursday.
  • Cliffs Natural Resources Inc. (NYSE: CLF) rose 0.21 percent in premarket trade after falling 4.04 percent on Thursday.
  • Amazon.com Inc. (NASDAQ: AMZN) lost 4.22 percent in premarket trade after releasing disappointing earnings on Thursday.
  • International Business Machines Corp. (NYSE: IBM) lost 0.28 percent in premarket trade after falling 2.94 percent over the past week.

Earnings

Notable earnings releases expected on Friday include:

  • Chevron (NYSE: CVX) is expected to report EPS of $2.58, compared to last year’s EPS of $2.98.
  • Mastercard (NYSE: MA) is expected to report EPS of $0.60, compared to last year’s EPS of $0.49.
  • Mattel (NYSE: MAT) is expected to report EPS of $1.20, compared to last year’s EPS of $1.12.
  • Tyson Foods (NYSE: TSN) is expected to report EPS of $0.65, compared to last year’s EPS of $0.48.
  • Honda Motor Company (NYSE: HMC) is expected to report EPS of $0.86, compared to last year’s EPS of $0.50.

Economics

With the European Central Bank meeting approaching next week, eurozone CPI data will be the star of Friday’s economic calendar. Other notable releases include Canadian GDP, German retail sales, French PPI, the eurozone unemployment rate, Italian PPI, and Spanish current account data.

For a recap of Thursday’s market action, click here.

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

Posted-In: Barack Obama Bashar al-Assad Federal ReserveEarnings News Eurozone Futures Forex Events Global Economics Federal Reserve Pre-Market Outlook Markets Movers Best of Benzinga

 

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