Market Overview

#PreMarket Primer: Wednesday, May 14: Markets Surprised To Hear Bundesbank Is On Board With ECB Stimulus

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Investors were surprised by reports from The Wall Street Journal which claimed that Germany’s Bundesbank is on board for more stimulus measures at the European Central Bank’s June meeting if the region’s financials warrant action.

The bank, which has traditionally been at odds with the ECB over policy measures, is reportedly ready to fight falling inflation by easing further.

Bundesbank President Jens Weidmann is well known for opposing the ECB’s 2012 unlimited  bond buying plan, designed to fight the region’s debt crisis. The Bundesbank is expected to look closely at projections for eurozone inflation through 2016 to make its decision, however the bloc’s poor inflation figures aren’t expected to make a comeback without the ECB’s intervention.

Top News

In other news around the markets:

  • On Wednesday, China’s Ministry of Public Security accused GlaxoSmithKline PLC’s Mark Reilly of ordering his sales team and other employees to commit bribery in order to make sales in China. Reilly, the head of the company’s Chinese operations, allegedly earned billions of yuan in revenue through a bribery scheme which extended to hospital doctors and healthcare organizations.
  • On Tuesday, Europe’s top court ruled that individuals should have the ability to request that certain links be removed from search results for their name. The decision sets a powerful precedent across the region and highlights the delicate balance between online privacy and free speech.
  • Western leaders are working to promote the Ukrainian government’s plans to hold a “round table” discussion about the nation’s worsening crisis on Wednesday, however Kiev has refused to include rebel leaders in the talks. After a secession vote over the weekend, the region’s conflict has only worsened; something many fear will have a negative impact on Ukraine’s presidential elections, set for May 25.
  • US retail sales for April showed that the nation’s consumers were reverting back to their cautious spending patterns as the figure increased just 0.1 percent to $434.6 billion from March’s figure. The data, although disappointing, did not sway popular opinion that the US economy is back on track after struggling in the first quarter.

Asian Markets

Asian markets were higher with the exception of the NIKKEI and the Shanghai composite, which were both up 0.14 percent. The Shenzhen composite gained 0.09 percent, the Hang Seng index rose 1.03 percent and the South Korean KOSPI was up 1.41 percent.

European Markets

European markets were mostly lower; the UK’s FTSE was down 0.05 percent, the eurozone’s STOXX 600 lost 0.18 percent, Italy’s MIB was down 0.43 percent and France’s CAC 40 lost 0.23 percent.

Commodities

Energy futures climbed with Brent futures up 0.41 percent to $109.69 per barrel and WTI futures up 0.36 percent to $102.07 per barrel. Gold and silver gained 0.47 percent and 0.86 percent respectively, but industrial metals were mixed. Copper gained 0.45 percent and tin was up 1.57 percent, but aluminum lost 0.34 percent and zinc was down 0.77 percent.

Currencies

The euro lost momentum and fell to $1.3722 and lost 0.27 percent against the yen. The dollar was also lower against the yen, down 0.41 percent; and the greenback also lost out to the franc by 0.16 percent.

Earnings

Notable earnings released on Tuesday included:

  • CST Brands (NYSE: CST) reported first quarter EPS of $0.14 on revenue of $3.00 billion.
  • URS Corporation (NYSE: URS) reported first quarter EPS of $0.60 on revenue of $2.54 billion, compared to last year’s EPS of $0.96 on revenue of $2.80 billion.
  • Fossil (NASDAQ: FOSL) reported first quarter EPS of $1.22 on revenue of $776.50 million, compared to last year’s EPS of $1.21 on revenue of $680.90 million.

Pre-Market Movers

Stocks moving in the Premarket included:

  • H&R Block (NYSE: HRB) was up 1.52 percent in premarket trade after gaining 2.02 percent over the past week.
  • CMS Energy (NYSE: CMS) rose 0.65 percent in premarket trade after losing 2.09 percent over the past five days.
  • Lockheed Martin (NYSE: LMT) gained 0.37 percent in premarket trade after rising 0.43 percent on Tuesday.
  • Verizon Communications (NYSE: VZ) was down 0.17 percent in premarket trade after falling 0.64 percent on Tuesday.

Earnings

Notable earnings releases expected on Wednesday include:

  • Macy’s Inc. (NYSE: M) is expected to report first quarter EPS of $0.60 on revenue of $6.47 billion, compared to last year’s EPS of $0.55 on revenue of $6.39 billion.
  • Deere & Company (NYSE: DE) is expected to report second quarter EPS of $2.47 on revenue of $9.65 billion, compared to last year’s EPS of $2.76 on revenue of $10.26 billion.
  • Cisco Systems, Inc. (NASDAQ: CSCO) is expected to report third quarter EPS of $0.48 on revenue of $11.38 billion, compared to last year’s EPS of $0.51 on revenue of $12.22 billion.
  • Pinnacle Foods (NYSE: PF) is expected to report first quarter EPS of $0.35 on revenue of $649.30 million, compared to last year’s EPS of $0.34 on revenue of $612.98 million.

Economics

Wednesday will be a busy day for economic releases with several European reports including German CPI, Spanish CPI, eurozone industrial production and the British unemployment rate. Also out on Wednesday will be US PPI and Japanese GDP.

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

Tune into Benzinga’s #PreMarket Prep show with Dennis Dick and Joel Elconin here.

Posted-In: Earnings News Eurozone Futures Commodities Previews Forex Global Best of Benzinga

 

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