#PreMarket Primer: Tuesday, March 11: BOJ Continues With Stimulus Package
The Bank of Japan elected to continue with its massive monetary stimulus at Tuesday’s policy meeting, nothing that the region’s economic growth was on track but that external demand was struggling. The bank was also optimistic about capital expenditure and industrial production, saying domestic demand was likely to continue at a strong pace until the nation’s planned sales tax hike on April 1.
In other news around the markets:
- The search for a missing Malaysian Airlines flight entered its fourth day on Tuesday with no forward progress. Authorities have widened their search for the plane, destined for Beijing, but have yet to find any evidence of the aircraft. Two passengers have been discovered as holding false passports, but officials have said there isn’t any evidence of a terror attack.
- Chiquita Brands International has made an agreement to merge with Irish fruit company Fyffes in a $1.07 billion all-stock deal which would make the new company the largest banana company in the world. The deal is expected to be completed later this year, but it could raise competition issues with regulators.
- With Crimean residents set to vote on a referendum on Sunday, tensions between the US and Russia are at an all time high. The Wall Street Journal reported that Russian President Vladimir Putin has turned down the US’ proposal to end the crisis in Ukraine, which in turn led US Secretary of State John Kerry to reject Moscow’s invitation to meet Putin and discuss the situation face to face.
- A survey by the National Australia Bank indicated that business conditions slipped to zero in February, down from plus 5 in January. The score takes into account factors like labor, purchasing costs and trading conditions.
Asian markets improved after taking a beating on Monday. The Japanese NIKKEI was up 0.69 percent, China’s Shanghai composite gained 0.10 percent and the Shenzhen composite rose 0.33 percent. The South Korean KOSPI rose 0.48 percent and the Hang Seng index gained 0.06 percent.
European markets were mixed on Tuesday; the UK’s FTSE lost 0.35 percent, the eurozone’s STOXX 600 was down 0.08 percent and the German DAX lost 0.91 percent. However, France’s CAC 40 gained 0.10 percent and Italy’s MIB was up 0.58 percent.
Energy futures gained modestly, Brent futures were up 0.17 percent and WTI futures rose 0.18 percent. Gold gained 0.09 percent and Silver was up 0.14 percent, but industrial metals were mixed with copper down 0.97 percent and aluminum up 0.59 percent.
Currency markets were quiet to begin the morning, the euro was steady at $1.3851 and the pound lost 0.05 percent against the greenback. The American dollar lost 0.22 percent against the Australian dollar and lost 0.01 percent to the Japanese yen.
Notable earnings released on Monday included:
- United Natural Foods, Inc. (NASDAQ: UNFI) reported second quarter EPS of $0.56 on revenue of $1.65 billion, compared to last year’s EPS of $0.46 on revenue of $1.45 billion.
- Urban Outfitters, Inc (NASDAQ: URBN) reported fourth quarter EPS of $0.59 on revenue of $905.90 million, compared to last year’s EPS of $0.56 on revenue of $856.83 million.
- Hill International, Inc. (NYSE: HIL) reported a fourth quarter loss of $0.03 per share on revenue of $145.00 million, compared to last year’s loss of $0.04 per share on revenue of $110.77 million.
Stocks moving in the Premarket included:
- Macy’s Inc (NYSE: M) gained 0.79 percent in premarket trade after rising 0.82 percent over the past week.
- The Coca-Cola Co (NYSE: KO) lost 1.68 percent in premarket trade after gaining 0.89 percent over the past five days.
- Carnival Corp (NYSE: CCL) fell 1.03 percent in premarket trade after losing 1.24 percent on Monday
- American Express Co (NYSE: AXP) was down 0.75 percent in premarket trade after rising 4.18 percent over the past week.
Notable earnings releases expected on Tuesday include:
- Caesars Entertainment Corporation (NASDAQ: CZR) is expected to report a fourth quarter loss of $1.49 on revenue of $2.12 billion, compared to last year’s loss of $3.75 on revenue of $2.02 billion.
- American Eagle Outfitters, Inc (NYSE: AEO) is expected to report fourth quarter EPS of $0.26 on revenue of $1.05 billion, compared to last year’s EPS of $0.55 on revenue of $1.12 billion.
- The Bon-Ton Stores, Inc. (NASDAQ: BONT) is expected to report fourth quarter EPS of $2.74 on revenue of $980.95 million, compared to last year’s EPS of $3.73 on revenue of $1.03 billion.
Tuesday will be another quiet day for economic releases. Investors will be watching for British manufacturing production, British industrial production, and Germany’s trade balance.
For a recap of Monday’s market action, click here.
Tune into Benzinga’s #PreMarket Prep show with Dennis Dick and Joel Elconin here.
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