Market Overview

#PreMarket Primer: Friday, August 22: Draghi, Yellen Set To Speak At Jackson Hole

#PreMarket Primer: Friday, August 22: Draghi, Yellen Set To Speak At Jackson Hole
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Jackson Hole will be in focus on Friday, as two of the world’s top central bankers, the Federal Reserve’s Janet Yellen and European Central Bank President Mario Draghi, are set to speak at the summit later in the day. Yellen will take top bill, as investors look to confirm what the Fed’s minutes suggested: that the bank is considering an earlier-than-expected rate hike.

There have been mixed messages from the U.S. central bank, as Yellen told investors that the bank was still concerned about the nation’s labor markets last month, but meeting minutes released this week revealed a debate about the merits of an early rate hike. Her speech today will likely have a big impact on the dollar as a dovish tone could end the dollar’s recent rally.

Top News

In other news around the markets:

  • On Thursday, the Pentagon warned that the Islamic State militants in Iraq and Syria could pose a larger threat to the U.S. than that of al Qaeda due to their growing wealth and military training. Secretary of Defense Chuck Hagel described the group as “beyond just a terrorist group” at a press conference, saying they were “beyond anything we’ve seen.”
  • General Motors' (NYSE: GM) ignition switch issues continued this week, as Federal prosecutors began an investigation into the legal department’s role in the defect’s cover up. In June, an internal General Motors document alleged that the legal department concealed evidence from regulators, which in turn delayed the recall of affected vehicles.
  • On Thursday, Ukrainian forces were bombarded near separatist-held Donetsk, resulting in several casualties. The growing death toll highlighted the nation’s need to find a lasting solution for peace and restore order in the eastern part of the country. Next week, Ukrainian President Petro Poroshenko is set to meet with his Russian counterpart, Vladimir Putin, to discuss how to end the ongoing conflict.
  • After the merger between Sprint Corp (NYSE: S) and T-Mobile (NYSE: TMUS) fell through, both companies went back to the drawing board in order to brainstorm new ways to expand their businesses. Sprint has announced that it will offer an attractive pricing plan designed to get customers to switch over in order to enjoy incentives. T-Mobile is similarly offering hefty referral rewards in order to grow its own subscriber base. The new, more aggressive approach will likely put pressure on Verizon (NYSE: VZ) and AT&T Inc (NYSE: T), the current market leaders.

Asian Markets

Asian markets were mostly higher with the exception of the NIKKEI, which lost 0.30 percent. The Shanghai composite was up 0.46 percent, the KOSPI rose 0.61 percent, the Shenzhen composite gained 0.63 percent and the Hang Seng index rose 0.47 percent.

European Markets

European markets were down across the board; the FTSE lost 0.06 percent, the STOXX 600 fell 0.18 percent, the DAX was down 0.30 percent and the CAC 40 fell 0.53 percent.

Commodities

Energy futures were lower as investors worried about the growing global supply glut. Brent futures lost 0.25 percent and WTI futures were down 0.42 percent. Gold rose 0.44 percent and silver was up 0.53 percent, but industrial metals were mixed. Copper gained 0.59 percent and zinc was up 0.25 percent, but aluminum and tin lost 0.82 percent and 0.98 percent respectively.

Currencies

The euro finished the week on a low note, losing 0.04 percent against the dollar and 0.20 percent against both the pound and the yen. The dollar lost 0.14 percent against the yen and 0.04 percent against the pound, as investors took profits ahead of the Jackson Hole summit.

Earnings

Notable earnings released on Thursday included:

  • Gap (NYSE: GPS) reported second quarter EPS of $0.70 on revenue of $3.98 billion, compared to last year’s EPS of $0.64 on revenue of $3.87 billion.
  • Hormel Foods (NYSE: HRL) reported third quarter EPS of $0.51 on revenue of $2.28 billion, compared to last year’s EPS of $0.42 on revenue of $2.16 billion.
  • Dollar Tree (NASDAQ: DLTR) reported second quarter EPS of $0.61 on revenue of $2.03 billion, compared to last year’s EPS of $0.56 on revenue of $1.85 billion.

Pre-Market Movers

Stocks moving in the Premarket included:

  • Johnson & Johnson (NYSE: JNJ) gained 1.07 percent in premarket trade after rising 1.44 percent over the past five days.
  • Starbucks (NASDAQ: SBUX) was up 0.23 percent in premarket trade after rising 1.11 percent over the past week.
  • eBay (NASDAQ: EBAY) rose 0.20 percent in premarket trade after gaining 4.66 percent on Thursday.
  • Citigroup (NYSE: C) was down 0.14 percent in premarket trade after rising 2.55 percent on Thursday.

Earnings

Notable earnings expected on Friday include:

  • Foot Locker (NYSE: FL) is expected to report EPS of $0.54, compared to last year’s EPS of $0.46.
  • ANN (NYSE: ANN) is expected to report EPS of $0.70, compared to last year’s EPS of $0.76.

Economics

The Jackson Hole summit will be the highlight of Friday’s economic calendar, as the world’s central bankers and economists discuss the state of the global economy. Other notable economic releases include Canadian CPI, Canadian retail sales and the Brazilian unemployment rate.

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

Tune into Benzinga’s pre-market info show with Sean Udall, Alan Brochstein, Brian Sozzi & Lydia Finkley here.

Posted-In: Earnings News Eurozone Commodities Previews Pre-Market Outlook Markets Trading Ideas

 

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