#PreMarket Primer: Monday, June 2: Beijing's Pro-Growth Measures Seem To Kick In
It seems that Beijing’s ‘mini-stimulus’ plan provided the Chinese economy with some much needed momentum as data from the region showed a revival in factory activity.
China’s official Purchasing Managers’ Index rose to 50.8 in May, the nation’s highest reading in five months. The figure beat expectations of a 50.6 reading and rose significantly from April’s 50.4.
Many saw the data as a sign that the second largest economy in the world is rebounding after a difficult first quarter.
In other news around the markets:
- Activist investor Carl Icahn, golfer Phil Mickelson and gambler William Walters are all being investigated by the FBI for insider trading. The probe is looking into whether or not Icahn provided Walters with non-public, market moving information; and if Walters then passed the information on to Mickelson. The three have denied any wrongdoing.
- Google is looking to bring internet connectivity to the far reaches of the globe with a $1 billion fleet of satellites. The project, led by satellite-communications startup O3b Networks Ltd founder Greg Wyler, is aimed at extending internet coverage to underserved regions which will provide Google with new users and ultimately boost revenue.
- The Environmental Protection Agency is expected to unveil a new proposal on Monday which will require power plants to reduce their carbon dioxide emissions by 30 percent by 2030. The new rule would be part of President Obama’s larger climate change agenda, but is expected to face a great deal of resistance; especially in energy producing states.
- On Monday, Apple will kick off the Worldwide Developers Conference in San Francisco. The event has been highly anticipated as Apple CEO Tim Cook said earlier this year that the company will be moving into new product categories this year. At the conference, the company is expected to reveal new mobile and personal computing operating systems and could also introduce a smartwatch or a larger iPhone; however The Wall Street Journal reported that people close to the matter aren’t expecting to see any big hardware reveals until later in the year.
Asian markets gained following the release of better than expected Chinese PMI figures. The Shenzhen composite was up 0.21 percent, the Hang Seng index rose 0.31 percent, the Japanese NIKKEI was up 2.07 percent and the South Korean KOSPI was up 0.35 percent.
European markets were higher with the exception of the CAC 40, which lost 0.18 percent. The UK’s FTSE was up 0.24 percent, the eurozone’s STOXX 600 gained 0.21 percent, the German DAX rose 0.18 percent and the Spanish IBEX was up 0.59 percent.
Energy futures were higher to begin the week; Brent futures gained 0.27 percent and WTI futures were up 0.45 percent. Industrial metals were lower with the exception of copper, which gained 1.38 percent, while precious metals were mixed. Gold lost 0.06 percent and silver was up 0.28 percent.
The euro continued to suffer this week, falling 0.22 percent against the dollar and 0.17 percent against the pound. The dollar rose 0.25 percent against the yen and 0.61 percent against the Australian dollar, but lost 0.07 percent against the pound.
Notable earnings released on Friday included:
- ANN (NYSE: ANN) reported first quarter EPS of $0.33 on revenue of $590.60 million, compared to last year’s EPS of $0.44 on revenue of $574.51 million.
Stocks moving in the Premarket included:
- Bank of America (NYSE: BAC) was up 0.59 percent in premarket trade after gaining 2.85 percent over the past five days.
- Xilinx (NASDAQ: XLNX) was down 1.21 percent in premarket trade after rising 2.02 percent over the past week.
- Peabody Energy (NYSE: BTU) fell 0.62 percent in premarket trade after losing 3.18 percent on Friday.
- Exxon Mobil (NYSE: XOM) was down 0.53 percent in premarket trade after falling 0.73 percent on Friday.
Notable earnings releases expected on Monday include:
- Krispy Kreme Doughnuts (NYSE: KKD) is expected to report first quarter EPS of $0.23 on revenue of $126.68 million, compared to last year’s EPS of $0.20 on revenue of $120.62 million.
- Quicksilver (NYSE: ZQK) is expected report a second quarter loss of $0.02 on revenue of $448.60 million, compared to last year’s loss of $0.12 on revenue of $458.75 million.
PMI data will dominate Monday’s economic calendar with manufacturing PMI reports due out from the US, China, Italy, Spain, Germany, France and the UK. Other notable releases include Australian retail sales, German CPI, and British mortgage approvals.
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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