#PreMarket Primer: Friday, April 25: More Sanctions On Russia Likely
Rising tension in Ukraine weighed on markets as investors watched the situation with caution.
After Ukrainian forces killed five pro-Russian separatists trying to recover its eastern cities, Russia called on its thousands of troops massed at the Ukrainian border.
It is unclear whether the military drills mean that Moscow is planning to send in military support, or if it is simply a show of strength; but the US has taken the response as a violation of the Geneva accord.
The accord, drawn up just last week, was intended to deescalate the situation and stabilize the region, but the US has blamed Russia of doing the “exact opposite” of what is necessary to move forward diplomatically.
In other news around the markets:
- Despite increased spending on technology, new warehouses and content, Amazon.com Inc.’s revenue surpassed expectations by rising 23 percent in the first quarter. The company’s Prime membership grew even after Amazon upped the price of the service and North American Sales continued to drive growth.
- Reuters reported that Nokia is expected to announce that Rajeev Suri will take over as the company’s CEO on Tuesday next week. The company, set to sell its phone business to Microsoft, will also announce its latest strategy, which will likely focus on networks equipment.
- General Electric is looking to buy Alstom SA’s energy business in an agreement that will reduce GE’s reliance on its finance business. If carried out, the deal will be GE’s largest in ten years, likely costing between $1 and $4 billion.
Standard & Poor’s Ratings Services downgraded Russia to one level above junk status, BBB-minus. The company’s outlook was negative for Russia, citing the geopolitical tension with Ukraine and outflows of foreign and domestic capital as reason for their negativity.
Asian markets were mostly lower with the exception of the NIKKEI, which gained 0.17 percent. The Shanghai composite was up 1.00 percent, the Shenzhen composite lost 1.87 percent, the Hang Seng index was down 1.50 percent and the KOSPI fell 1.34 percent.
European markets were down across the board; the UK’s FTSE was down 0.19 percent, the eurozone’s STOXX 600 lost 0.38 percent, the German DAX fell 0.72 percent and France’s CAC 40 was down 0.30 percent.
Energy futures were lower; Brent futures lost 0.32 percent and WTI futures were down 0.41 percent. Gold gained 0.70 percent but silver lost 0.62 percent and industrial metals were mostly higher with the exception of Copper which lost 0.28 percent.
The euro was steady at $1.3834, but lost 0.05 percent against the pound and 0.08 percent against the yen. The dollar fell 0.10 percent against the yen and 0.12 percent against the Australian dollar.
Notable earnings released on Thursday included:
- Amazon.com, Inc. (NASDAQ: AMZN) reported first quarter EPS of $0.23 on revenue of $19.74 billion, compared to last year’s EPS of $0.18 on revenue of $12.58 billion.
- Caterpillar, Inc. (NYSE: CAT) reported first quarter EPS of $1.61 on revenue of $13.20 billion, compared to last year’s EPS of $1.23 on revenue of $13.21 billion.
- General Motors Company (NYSE: GM) reported first quarter EPS of $0.29 on revenue of $37.40 billion, compared to last year’s EPS of $0.67 on revenue of $36.88 billion.
- Microsoft Corporation (NASDAQ: MSFT) reported first quarter EPS of $0.68 on revenue of $20.40 billion, compared to last year’s EPS of $0.72 on revenue of $20.49 billion.
- Starbucks Corporation (NASDAQ: SBUX) reported first quarter EPS of $0.56 on revenue of $3.87 billion, compared to last year’s EPS of $0.51 on revenue of $3.56 billion.
Stocks moving in the Premarket included:
- Ford Motor Co (NYSE: F) was up 1.10 percent in premarket trade after gaining 2.00 percent over the past week.
- Transocean LTD (NYSE: RIG) was down 1.23 percent in premarket trade after rising 4.13 percent on Thursday.
- Bank of America Corp (NYSE: BAC) was down 0.86 percent in premarket trade after rising 1.18 percent over the past five days.
- Verizon Communications (NYSE: VZ) lost 0.82 percent in premarket trade after falling 2.42 percent on Thursday.
Notable earnings releases expected on Friday include:
- Exxon Mobil Corporation (NYSE: XOM) is expected to report first quarter EPS of $1.88 on revenue of $105.62 billion, compared to last year’s EPS of $2.12 on revenue of $108.81 billion.
- Ford Motor Company (NYSE: F) is expected to report first quarter EPS of $0.31 on revenue of $34.06 billion, compared to last year’s EPS of $0.41 on revenue of $33.86 billion.
- AbbVie (NYSE: ABBV) is expected to report first quarter EPS of $0.68 on revenue of $4.33 billion, compared to last year’s EPS of $0.68 on revenue of $4.33 billion.
- Chevron Corporation (NYSE: CVX) is expected to report first quarter EPS of $2.76 on revenue of $56.26 billion, compared to last year’s EPS of $3.18 on revenue of $56.82 billion.
Friday’s economic calendar will be relatively thin with releases including US consumer sentiment, US services PMI, British retail sales and Singaporean industrial production.
For a recap of Thursday’s market action, click here.
Tune into Benzinga’s #PreMarket Prep show with Dennis Dick and Joel Elconin here.
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