#PreMarket Primer: Monday, May 12: Eastern Ukraine Secession Vote A Victory For Separatists
Pro-Russian separatist rebels celebrated an overwhelming victory in a makeshift secession vote held on Sunday.
The vote has been condemned by the EU as illegal; however the rebel groups have said it will allow eastern Ukraine to decide whether it will remain a part of Ukraine, become self-sufficient, or join Russia.
The vote marks a turning point in the nation's crisis, in which the conflict has fallen out of the Ukrainian government’s control. Many worry that the succession referendum will be enough to push the country into a civil war.
In other news around the markets:
- On Monday, North Korean officials denied US and South Korean accusations that North Korea had used small surveillance drones to spy on South Korean movements in March. A spokesperson for the North claimed that the examination of three drones found on the border was simply a “charade” and accused the US of backing a conspiracy invented by South Korea.
- Nasdaq OMX Group Inc. hired Adena Friedman as a co-president, which many believe will eventually lead to her becoming the company’s next CEO. Friedman previously worked for Nasdaq, but left the company for three years while she worked as chief financial officer at Carlyle Group LP.
- With negotiations between world powers and Iranian officials set to begin on Tuesday, Iran’s Supreme Leader remarked that Western expectations about Tehran’s nuclear development were “stupid and idiotic”. The statement doesn’t bode well for the two sides reaching an agreement on the nation’s long disputed atomic capabilities.
- With the use of drones picking up across the US, the FAA is being forced to tighten regulations and increase enforcement in order to limit the risks. Last week, it was revealed that an American Airlines pilot told officials that his plane nearly hit a drone as it approached the airport in Tallahassee, Florida. The FAA is expected to come out with a new set of rules on how drones will be allowed to operate, but it could take several years for the rules to be finalized.
Asian markets were mostly higher with the exception of the NIKKEI, which lost 0.35 percent. The Shanghai composite gained 1.91 percent, the Shenzhen composite was up 2.12 percent, the Hang Seng index was up 2.22 percent and the KOSPI rose 0.43 percent.
European markets were mostly higher, the UK’s FTSE rose 0.27 percent, the eurozone’s STOXX 600 was up 0.30 percent, the German DAX gained 0.31 percent and Italy’s MIB was up 0.44 percent.
Energy futures were higher as the crisis in Ukraine escalated and a supply interruption became a real worry. Brent futures gained 0.33 percent and WTI futures were up 0.13 percent. Gold and silver were also higher, up 0.09 percent and 0.70 percent respectively, while industrial metals were mixed. Copper gained 1.01 percent, but aluminum was down 0.28 percent and tin lost 0.32 percent.
Currency markets were quiet; the dollar lost 0.19 percent against the pound and 0.07 percent against the euro, but gained 0.05 percent against the yen. The euro lost 0.13 percent against the pound, but gained 0.06 percent against the yen.
Notable earnings released on Friday included:
- Alcatel Lucent (NYSE: ALU) reported a first quarter loss of $0.04 on revenue of $2.96 billion, compared to last year’s loss of $0.19 on revenue of $4.27 billion.
- Ralph Lauren (NYSE: RL) reported fourth quarter EPS of $1.68 on revenue of $1.83 billion, compared to last year’s EPS of $1.41 on revenue of $1.64 billion.
- Bloomin’ Brands (NASDAQ: BLMN) reported first quarter EPS of $0.42 on revenue of $1.20 billion, compared to last year’s EPS of $0.50 on revenue of $1.09 billion.
- Hilton Worldwide (NYSE: HLT) reported first quarter EPS of $0.13 on revenue of $2.36 billion, compared to last year’s EPS of $0.09.
Stocks moving in the Premarket included:
- Peabody Energy (NYSE: BTU) was up 2.63 percent in premarket trade after losing 1.63 percent on Friday.
- Verizon Communications (NYSE: VZ) lost 0.14 percent in premarket trade after gaining 2.89 percent over the past week.
- Schlumberger (NYSE: SLB) was down 0.12 percent in premarket trade after falling 0.80 percent over the past week.
Notable earnings releases expected on Monday include:
- McKesson Corporation (NYSE: MCK) is expected to report fourth quarter EPS of $2.40 on revenue of $35.89 billion, compared to last year’s EPS of $1.45 on revenue of $30.62 billion.
- NII Holdings (NASDAQ: NIHD) is expected to report a first quarter loss of $2.05 on revenue of $1.02 billion, compared to last year’s EPS of $1.21 on revenue of $1.41 billion.
- Babcock & Wilcox (NYSE: BWC) is expected to report first quarter EPS of $0.42 on revenue of $704.81 million, compared to last year’s EPS of $0.46 on revenue of $805.42 million.
Monday’s economic calendar will be relatively quiet; with releases including the US Federal budget balance, Indian CPI, and Swiss retail sales.
For a recap of Friday’s market action, click here.
Tune into Benzinga’s #PreMarket Prep show with Dennis Dick and Joel Elconin here.
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