Market Overview

#PreMarket Primer: Wednesday, May 21: Russian Troops Leave Ukrainian Border

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The crisis in Ukraine took a new turn on Wednesday after Russian news agency RIA reported that the Defense Ministry announced that troops had begun to move away from the Ukrainian border.

On Monday, Russian President Vladimir Putin claimed that he had ordered his troops to withdraw, but US officials and NATO claimed there were no signs of movement at the border.

The Russian ministry said its troops had been dismantling their camps and preparing military vehicles and are now heading in the direction of train stations and airfields.

Top News

In other news around the markets:

  • In order to resolve a probe into whether BNP Paribas violated US sanctions by dealing with countries like Iran and Sudan, the French lender may be forced to pay more than $5 billion. Bloomberg reported that the final amount could change as discussions about the infraction continue, but that the settlement may be announced as early as June.
  • On Tuesday, General Motors Co announced that it is recalling another 2.6 million cars from around the world, bringing the total number of vehicles recalled to nearly 15.4 million. The company took a $1.3 billion charge in the first quarter for repairs associated with faulty ignition switches and is expecting around $400 million worth of recall-related repairs in the second quarter.
  • On Wednesday, Netflix announced a planned expansion into Europe, set to begin later in 2014. The online video company is going to extend its service to six eurozone countries, including Germany and France. The company will face several obstacles, including regulatory laws that make releasing content on the internet more difficult. However, the market for video streaming in Europe is expected to be a lucrative one, with revenue in Western Europe projected to reach $1.1 billion by 2017.
  • On Wednesday, BHP Billiton Ltd warned that a strike among Australian tug boat workers could impact its customer base. The global mining company said that the strike would rob the company of about $94 million in lost sales per day. If the workers go ahead with the strike, Australian law dictates that it must take place before June 11th.

Asian Markets

Asian markets were mixed; the NIKKEI lost 0.23 percent and the KOSPI fell 0.15 percent, but the Shanghai composite was up 0.84 percent and the Shenzhen composite gained 0.89 percent. The Hang Seng Index rose 0.01 percent and Australia’s ASX 200 was up 0.08 percent, but New Zealand’s NZ50 fell 0.51 percent.

European Markets

European markets were mixed; the UK’s FTSE lost 0.19 percent and France’s CAC 40 was down 0.22 percent, but the eurozone’s STOXX 600 was flat and the MIB rose 0.46 percent. The German DAX was up 0.07 percent and the Spanish IBEX fell 0.06 percent.

Commodities

Energy futures were driven higher by a draw in US stocks and escalating violence in Libya. Brent futures gained 0.33 percent and WTI futures were up 0.77 percent. Gold was flat but silver gained 0.26 percent; while industrial metals fell across the board. Copper lost 1.10 percent, tin was down 1.41 percent and zinc fell 0.48 percent.

Currencies

The dollar was under pressure on Wednesday, pushed lower by declining Treasury yields. The greenback lost 0.34 percent against the yen and 0.35 percent against the pound. The decline gave the euro some room to improve to $1.3709, but the common currency lost 0.29 percent against the pound and 0.27 percent against the yen.

Earnings

Notable earnings released on Tuesday included:

  • Home Depot (NYSE: HD) reported first quarter EPS of $0.96 on revenue of $19.69 billion, compared to last year’s EPS of $0.83 on revenue of $19.12 billion.
  • Staples (NASDAQ: SPLS) reported first quarter EPS of $0.18 on revenue of $5.65 billion, compared to last year’s EPS of $0.26 on revenue of $5.81 billion.
  • Salesforce.com (NYSE: CRM) reported first quarter EPS of $0.11 on revenue of $1.23 billion, compared to last year’s EPS of $0.10 on revenue of $982.63 million.
  • Medtronic (NYSE: MDT) reported fourth quarter EPS of $1.12 on revenue of $4.57 billion, compared to last year’s EPS of $1.10 on revenue of $4.46 billion.

Pre-Market Movers

Stocks moving in the Premarket included:

  • Carnival (NYSE: CCL) was up 1.49 percent in premarket trade after rising 0.88 percent on Monday.
  • Salesforce.com (NYSE: CRM) rose 0.57 percent in premarket trade after gaining 1.17 percent over the past week.
  • Bank of America (NYSE: BAC) gained 0.07 percent in premarket trade after falling 3.33 percent over the past five days.
  • Alcoa (NYSE: AA) was down 0.46 percent in premarket trade after losing 2.66 percent on Tuesday

Earnings

Notable earnings releases expected on Wednesday include:

  • Target Corporation (NYSE: TGT) is expected to report first quarter EPS of $0.72 on revenue of $17.02 billion, compared to last year’s EPS of $0.82 on revenue of $16.71 billion.
  • Lowe’s Companies (NYSE: LOW) is expected to report first quarter EPS of $0.61 on revenue of $13.91 billion, compared to last year’s EPS of $0.49 on revenue of $13.09 billion.
  • Hormel Foods (NYSE: HRL) is expected to report second quarter EPS of $0.56 on revenue of $2.24 billion, compared to last year’s EPS of $0.49 on revenue of $2.15 billion.
  • Tiffany & Co.(NYSE: TIF) is expected to report first quarter EPS of $0.78 on revenue of $955.12 million, compared to last year’s EPS of $0.70 on revenue of $895.48 million.

Economics

Wednesday’s economic calendar will be a busy one with releases including eurozone current account, British retail sales, eurozone consumer confidence, US crude inventory data, and Chinese HSBC manufacturing PMI.

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 Events Best of Benzinga

 

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