Benzinga Market Primer: Monday, March 4

Futures Lower on Weak Chinese Data, Italy Fears

U.S. equity futures fell in early pre-market trade Monday following weaker than expected data from China and also on continued fears surrounding the state of Italian politics. New data showed that China's services sector grew faster than expected in February, days after the official manufacturing PMI also showed slower than expected growth in the month. Also, markets feared the need for another round of elections in Italy, creating more uncertainty in world politics.

Top News

In other news around the markets:

• Warren Buffett, in his annual letter to Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) shareholders, noted that the firms performance in 2012 was lackluster as he failed to hunt an "elephant" to acquire until January 2013. He expects to continue making acquisitions to drive book value growth.


• Spain's unemployment rate rose to a massive 27 percent in February as more than 59 thousand workers filed for new unemployment claims in Spain. The increase was actual the slowest rise in unemployment in Spain for the month of February in five years, potentially showing that a bottom to Spain's economy is near.


• Fed Chairman Ben Bernanke spoke over the weekend dismissing fears of an early Fed exit or "Fexit" as he noted that the risks of the Fed taking away liquidity too early far outweigh the risks of not taking it away soon enough, in his view.


• S&P 500 futures fell 4.3 points to 1,512.40.


• The EUR/USD was fell 0.19 percent to 1.2993, breaking below the psychological 1.30 level for the second consecutive trading day.


• Spanish 10-year government bond yields fell to 5.06 percent.


• Italian 10-year government bond yields rose to 4.81 percent.


• Gold rose 0.29 percent to $1,577.00.

Asian Markets

Asian shares were mostly lower except for Japan, led lower by China following the weaker than expected manufacturing and service sector PMI's. The Japanese Nikkei Index rose 0.4 percent and the Shanghai Composite Index fell 3.65 percent while the Hang Seng Index slipped 1.5 percent. Also, the Korean Kospi fell fell 0.66 percent and Australian shares declined 1.49 percent.

European Markets

European shares were mostly lower save for Spain in early trade on fears of a global slowdown led by China and on Italian political fears. The Spanish Ibex Index rose 0.23 percent on the better than expected employment data and the Italian FTSE MIB Index fell 0.92 percent. Meanwhile, the German DAX fell 0.47 percent and the French CAC fell 0.04 percent while U.K. shares declined 0.42 percent.

Commodities

Commodities were mixed overnight as energy futures were mostly lower and metals futures rose. WTI Crude futures fell 0.19 percent to $90.51 per barrel and Brent Crude futures rose 0.05 percent to $110.46 per barrel. Copper futures rose rose 0.1 percent to $350.50 per pound despite weakness in China and Australia. Gold was higher and silver futures rose 0.84 percent to $28.73 per ounce.

Currencies

Currency markets were in clear risk-off mode as the dollar and the yen reigned and the euro fell. The EUR/USD was lower at 1.2993 and the dollar fell against the yen to 93.57. Overall, the Dollar Index rose 0.08 percent on strength against the euro, the pound, the Canadian dollar, and the Swiss franc. Notably, the Australian dollar was weak on fears of a Chinese slowdown and also on negative comments from Moody's on the nations sovereign debt rating, saying that the strong currency is a risk to debt payments should it devalue.

Pre-Market Movers

Stocks moving in the pre-market included:

• Best Buy (NYSE: BBY) shares rose 1.92 percent pre-market after beating earnings last Friday.


• Joy Global (NYSE: JOY) shares fell 1.97 percent pre-market on fears that new orders from China and Asia could slow if the broad economy slows.


• Hewlett-Packard (NYSE: HPQ) shares fell 0.74 percent pre-market after the company rolled out a slew of new services over the weekend.


• Pfizer (NYSE: PFE) shares fell 0.66 percent pre-market as the FDA approved a drug made by Bayer to compete with its intestine cancer drug.

Earnings

Notable companies expected to report earnings Monday include:

• Arena Pharmaceuticals (NASDAQ: ARNA) is expected to report a fourth quarter loss of $0.03 per share vs. a loss of $0.16 per share a year ago.


• Boyd Gaming (NYSE: BYD) is expected to report a fourth quarter loss $0.13 per share vs. a loss of $0.03 per share a year ago.


• Navistar (NYSE: NAV) is expected to report a first quarter loss of $1.73 per share vs. a loss of $0.91 per share a year ago.


• Transocean (NYSE: RIG) is expected to report fourth quarter EPS of $0.82 vs. $0.24 a year ago.

Economics

On the economics calendar Monday, the Treasury is set to auction 3- and 6-month bills. Also, the TD Ameritrade Investor Movement Index should shed light on retail flows in February. Overnight, the RBA rate decision is expected followed by the European service PMI's for both the broad eurozone and for individual countries.

Good luck and good trading.