#PreMarket Primer: Thursday, December 4: Beige Book Paints Positive Picture Of US Economy

The Federal Reserve’s “beige book” report struck an optimistic tone and indicated that the US central bank saw improving economic growth through 2015. The report showed that US firms added a “sizable” number of new jobs, but that wage growth was minimal. The report came ahead of Friday’s closely watched non-farm payrolls data, which is expected to show that employers added 230,000 new jobs in November and that the nation’s unemployment rate was steady at 5.8 percent. The upbeat reports will likely come into play in two weeks when the Fed meets to discuss the current economic climate and make plans about when to raise the nation’s interest rates.

Top News

In other news around the markets:

• On Wednesday, GlaxoSmithKline PLC GSK announced plans to eliminate hundreds of US jobs in an effort to cut costs. The drug maker has been suffering alongside many of its peers as patents expired and research and development costs increased. The job cuts fall inline with the company’s plans to reduce costs by $1.6 billion over the next year, though exact figures of how many employees will be laid off have not been released.
• Sony Pictures Entertainment SNE is still reeling from last week’s hacking attack that exposed several of the company’s internal documents as well as disabling some of its internal systems.The attack, claimed by a group of hackers called Guardians of Peace, is still being investigated and details of how the hackers gained access have yet to be uncovered.
• The European Central Bank is set to meet today to discuss whether or not the region is in need of further stimulus against a backdrop of a declining economic climate. The region’s PMI figures out this week showed that its firms cut prices yet again and that business activity crept dangerously close to the 50 reading that separates expansion and contraction. Still, the bank’s governing council has been divided over whether or not to roll out further stimulus and many are expecting that it won’t make a move until early next year.
• The Wall Street Journal reported that Saudi Arabian officials see oil prices falling as low as $60 before stabilizing. Crude prices have been extremely volatile since OPEC decided against cutting production at last week’s meeting, largely because Saudi officials were opposed to it. The kingdom believes it can withstand such drop, meaning a production cut is unlikely in the near term.

Asian Markets

Asian markets were up across the board; the NIKKEI rose 0.94 percent, the KOSPI gained 0.85 percent, the Hang Seng index was up 1.72 percent and China’s Shenzhen and Shanghai composites had the largest gains, up 2.42 percent and 4.35 percent respectively.

European Markets

Europe’s markets were mostly higher with the exception of the FTSE, which lost 0.07 percent. The STOXX 600 gained 0.15 percent, the DAX rose 0.32 percent, the CAC 40 was up 0.31 percent and the MIB gained 0.23 percent.

Commodities

Energy futures were higher; Brent futures rose 0.66 percent and WTI futures gained 0.59 percent. Gold lost 0.40 percent, but silver was up 0.35 percent, while industrial metals were mostly higher with the exception of aluminum, which lost 0.30 percent. Copper gained 0.89 percent, zinc rose 0.14 percent and tin was up 0.34 percent.

Currencies

The euro was steady above $1.2319 ahead of the ECB policy meeting. The common currency gained 0.18 percent against the yen and remained flat against both the pound and the franc. The dollar was also higher against the yen, up 0.12 percent, but lost 0.06 percent against the pound and 0.04 percent against the franc.

Earnings

Notable earnings released on Wednesday included: 

• Royal Bank Of Canada RY  reported fourth quarter EPS of $1.59, compared to last year’s EPS of $1.31 on revenue of $7.97 billion.
• PVH Corp PVH reported third quarter EPS of $2.56 on revenue of $2.23 billion, compared to last year’s EPS of $2.30 on revenue of $2.26 billion.
• Leidos Holdings LDOS reported third quarter EPS of $0.65 on revenue of $1.28 billion, compared to last year’s loss of $0.11 on revenue of $1.42 billion.
• Abercrombie & Fitch Company ANF reported third quarter EPS of $0.21 on revenue of $911.50 million, compared to last year’s EPS of $0.52 on revenue of $1.03 billion.

Pre-Market Movers

Stocks moving in the Premarket included:

• General Motors Co GM was up 1.96 percent in premarket trade after rising 4.90 percent over the past five days.
• Scripps Networks Interactive Inc. SNI rose 1.84 percent in premarket trade after gaining 1.96 percent on Wednesday.
• Bank of America Corp BAC was up 0.17 percent in premarket trade after gaining 0.82 percent on Wednesday.
• eBay Inc. EBAY was up 0.07 percent in premarket trade after choppy trading took the stock up 0.44 percent over the past week.

Earnings

Notable releases expected on Thursday include:

• Kroger Company KR  is expected to report third quarter EPS of $0.61 on revenue of $24.82 billion, compared to last year’s EPS of $0.53 on revenue of $22.50 billion.
• Dollar General Corporation DG is expected to report third quarter EPS of $0.80 on revenue of $4.75 billion, compared to last year’s EPS of $0.72 on revenue of $4.38 billion.
• Sears Holdings Corporation SHLD is expected to report a third quarter loss of $3.31 per share on revenue of $6.88 billion, compared to last year’s loss of $2.95 per share on revenue of $8.27 billion.
• Barnes & Noble, Inc. BKS is expected to report second quarter EPS of $0.31 on revenue of $1.69 billion, compared to last year’s EPS of $0.15 on revenue of $1.73 billion.

Economics

The focus of Thursday’s economic calendar will be the European Central Bank’s policy  meeting as investors speculate whether or not the bank will implement further stimulus. Other notable releases will be the Bank of England’s policy decision and France’s unemployment rate.

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

<p>Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin <a> http://optionshouse.benzinga.com/pre-market-show/ />here</a>.</p>