Market Overview

#PreMarket Primer: Friday, August 29: Japanese Economy Proves Resilient

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Despite a recent economic contraction, Japanese data out on Friday indicated that the region’s recovery was still in progress. The nation’s consumer price index increased to 1.3 percent annually in July, suggesting that Prime Minister Shinzo Abe’s economic policies have been successful.

After implementing a massive sales tax hike in April, many worried that the nation would suffer, but with inflation rising toward the government’s two percent target, Japan’s economic recovery looks to be on track.

Top News

In other news around the markets:

  • On Thursday, the United Nations said 43 of its peacekeepers in Golan Heights had been detained, and 81 more have been trapped there by the Syrian army. The U.N. has condemned their seizure and is working to secure their release and freedom of movement as soon as possible. The 43 who were captured came from Fiji, while the 81 trapped are Filipino.
  • On Friday, pro-Moscow separatists agreed to allow Ukrainian forces that have been surrounded and trapped to withdraw from their position in compliance with a request from the Kremlin. Russian President Vladimir Putin suggested that the rebels open a “humanitarian corridor” to allow the Ukrainian forces safe passage, but many see the separatists’ quick obedience as a further sign that the entire movement was orchestrated by Russia.
  • Google (NASDAQ: GOOG) joined the ranks of Amazon (NASDAQ: AMZN) and Domino’s Pizza (NYSE: DPZ) this month, as the company tested a drone delivery system in Australia. The company said its drones were able to carry a variety of supplies to farmers in Queensland and hopes to eventually develop a system that will allow customers to receive deliveries via drone without violating privacy rights or safety regulations.
  • At a news conference on Thursday, President Obama said he has no immediate plans to increase U.S. airstrikes against Islamist militants in Syria or Iraq. The President said he was working with his advisors to create a plan that will stem the group’s growing position in Iraq and Syria while still protecting the interests of the U.S. and its allies.

Asian Markets

Asian markets were mixed; the NIKKEI was down 0.23 percent, and the KOSPI fell 0.35 percent, but the Shanghai composite gained 0.97 percent, and the Shenzhen composite was up 1.10 percent.

European Markets

European markets were mostly higher; the FTSE was up 0.15 percent, the STOXX 600 gained 0.18 percent, the DAX rose 0.22 percent and the MIB gained 0.68 percent.

Commodities

Energy futures were higher; Brent futures gained 0.34 percent and WTI futures rose 0.53 percent. Gold and silver lost 0.36 percent and 0.61 percent, respectively, but industrial metals were mixed. Copper rose 0.05 percent, and tin was up 0.07 percent, but aluminum fell 0.22 percent, and zinc was down 0.72 percent.

Currencies

Currency markets were relatively quiet on Friday; the euro was steady at $1.3181, but gained 0.14 percent against the yen. The dollar was also higher against the yen, up 0.16 percent, but lost 0.10 percent against the pound and 0.02 percent against the franc.

Earnings

Notable earnings released on Thursday included:

  • Dollar General (NYSE: DG) reported second quarter EPS of $0.83 on revenue of $4.72 billion, compared to last year’s EPS of $0.77 on revenue of $4.39 billion.
  • Abercrombie & Fitch (NYSE: ANF) reported second quarter EPS of $0.19 on revenue of $891.00 million, compared to last year’s EPS of $0.14 on revenue of $945.70 million.
  • Genesco (NYSE: GCO) reported second quarter EPS of $0.34 on revenue of $615.00 million, compared to last year’s EPS of $0.56 on revenue of $574.75 million.

Pre-Market Movers

Stocks moving in the Premarket included:

  • Avago Technologies (NASDAQ: AVGO) was up 3 percent in premarket trade after choppy trade took the stock up 0.12 percent over the past week.
  • Whole Foods Market (NASDAQ: WFM) gained 1.19 percent in premarket trade after falling 1.55 percent on Thursday.
  • Qualcomm (NASDAQ: QCOM) rose 0.55 percent in premarket trade after losing 0.82 percent on Thursday.
  • Facebook (NASDAQ: FB) was up 0.35 percent in premarket trade after falling 1.04 percent on Thursday.

Earnings

Notable earnings expected on Friday include:

  • Big Lots (NYSE: BIG) is expected to report second quarter EPS of $0.30 on revenue of $1.20 billion, compared to last year’s EPS of $0.31 on revenue of $1.23 billion.
  • Noodles & Co (NASDAQ: NDLS) is expected to report second quarter EPS of $0.10 on revenue of $104.60 million, compared to last year’s EPS of $0.11 on revenue of $88.94 million. 

Economics

Eurozone CPI will be the highlight of Friday’s economic calendar, as investors look for clues about the European Central Bank’s next policy move. Other notable releases will include the Spanish current account, the eurozone’s unemployment rate, Spanish retail sales, Japanese housing starts Italian CPI, Italian GDP and Japanese construction orders.

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

Tune into Benzinga’s pre-market info show with Ezra Rapoport, Chris Vermeulen, Alan Brochstein & Larry Doyle here.

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

 

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